James Smith's Blog

According to a report published by Reuter, the United States’ economy grew at an annual rate of 3.2%, the fastest growth rate in the past 3 years.

With worldwide economies in flux, the United States is inching forward steadily and recovering from the greatest recession since the 1930’s. Although the growth in the first quarter did not match the 5%+ annual rate of growth that we experienced in the forth quarter of 2009, our latest numbers show that the economy has been growing for the 3^rd consecutive quarter.

Right now, the name of the game is sustainability and the questions that people are asking is whether our economy can continue to move forward. Many experts believe that there are real signs of strength and support because consumer spending, which typically accounts for approximately 70% of our GDP, is on the rise. In Q1 of 2010, consumer spending added 2.6% to GDP, the highest levels since 2006.

The lagging area of the economy is still the jobs sector. Despite the countless billions of dollars spent by the Obama administration, joblessness is still one of the top crises facing the United States. While it is impossible for anyone to predict where the unemployment rate will be a year from now, there is real reason to believe that hiring will improve for several reasons.

As consumer spending and revenue increase for companies like Apple and General Motors, they will subsequently reinvest in advertising, R&D and retail – all of which requires labor. Also, as the housing market continues to heal itself, remodeling projects are taking the forefront. Contractors are beginning to see some increases in activity because the recent boon of homebuyers want home improvements. Everything from improved insulation to new kitchens and baths are being performed and this activity is infusing much needed capital into the ailing construction industry.

James Smith and his team will continue to watch the economy and its growth for important news. In order to stay up to date, please register for this blog and you will automatically be notified every time a new article is posted.

With the expiration of the first time homebuyer tax credit days away, home sales are seeing a marked increase. Experts projected home sales to reach an annual rate of 324,000 units; however, the rate has been upwardly revised to 411,000 with reports that home sales jumped 27% in March alone.

Many experts believe that the increase in home sales is a result of several prime factors. First and most obvious is the eminent expiration of the first time homebuyer and repeat homebuyer tax credits. The credits are worth thousands of dollars, which could subsidize the purchase of a home up to 10%. The credit’s value, combined with record low home prices, is providing substantial discounts for qualified recipients.

Pent up housing demand is believed to be playing a role in the current home sales increases. While this is believed to be a smaller contributor, it is a result of the recent perceived changes regarding economic conditions. There are reports that a fair number of buyers who are going to closing in the next few weeks and months, would have purchased homes in 2009, but they were uncertain as to the security of their jobs. Most Americans know that we are a long way from a full recovery, but everyday, more people are beginning to make larger financial decisions.

Finally, experts believe that a fair portion of the sales that we are seeing during this month and last is actually coming from buyers who would have otherwise waited until the Summer or Fall of this year. This advance on sales may cause decreases or stagnation on home sales in the coming months.

There is little question that the tax credits have had an enormous impact on the housing market. Even if the current sales are partially attributable to a draw from future months sales, the boon to the real estate market will likely last for months. The sales increases have provided much needed revenue to realtors, brokers, appraisers, home improvement stores and also contractors.

When people buy new homes, they commonly fix or alter small aspects of their homes. Whether it is enclosing a porch, updating a bathroom or insulating an attic, the real estate market’s related industries will be seeing benefits from March’s sales numbers throughout 2010.

So you saw James Smith at the Get Motivated Seminar and like many people, you realized that in order to set yourself up financially, you are going to have to make some real changes.

There comes a point in our lives where we realize that we have been getting by financially and that our goal of retirement isn’t getting any closer. While some attendees have this realization in their 20’s, most of the people who are looking for change in their 40’s, 50’s and 60’s. Currently, there are about 10,000 baby boomers crossing the 65 year old age category each day. Unfortunately, on average, they will have to make an average of a 41% spending cut across the board to simply get by. Shouldn’t your golden years be just that, golden? They shouldn’t be filled with worries over money and finance.

Whether you are coming to the Financial Success Summit because you want to supplement your income or because you want to quit your job, you are going find real answers to the financial questions before you. The central focus of James Smith’s Financial Success Summit is to show people how they can make small, but significant changes to their financial game plan and see huge results!

James Smith started his investing career over 41 years ago and in that timeframe, he has been able to learn from and network with the best mentors and trainers in the United States. At the Financial Success Summit, you and your partner will have the opportunity to learn from James Smith and his top instructors. They will share with you the techniques and strategies that they used to create their wealth.

Perhaps the most surprising aspect of the Financial Success Summit is the family atmosphere. While you will certainly be learning form established professionals and accredited investors, James Smith wants people to know that family and friends are often times at the core of his students’ success. If you are looking to attend an upcoming event, please feel free to invite your spouse and other family members to attend with you. From the first minute, you are going to want to share these impactful 3-days with them.

Before you attend the Financial Success Summit, we kindly ask you to preregister. Even though you filled out a registration card when you signed up, we strive hard to make sure that there is enough seating for everyone and when you preregister, it simply helps us prepare for the event. To preregister for your upcoming Financial Success Summit, simply call our registration specialists at (800) 270 – 3357. If you are bringing an additional person to the event with you, we require that they first call and receive a complimentary confirmation number.

When you arrive at the event, come to learn, come to interact with other like minded professionals and come to make a change. You will have an opportunity to work with James Smith’s team one-on-one. That’s right. We have designed the Financial Success Summit in such a way that we are able to meet with and help each attendee specifically.

As a heads up, we encourage everyone to arrive early on the first day. The Financial Success Summit will begin at 9:00 am, unless otherwise stated. We recommend arriving a minimum of 30 minutes early in order to register at the event and to meet our friend staff. You will also want to bring a notebook and pen for taking notes. There will be a tremendous amount of information that you will be able to take home and apply immediately. Finally, please dress in layers! Each venue is different and it is hard to control the room temperatures because our events are usually on a master temperature controller. We work hard to make the venue as comfortable as possible, but sometimes the room temperature is 60 degrees and other times its 80. If you layer… you won’t have a problem.

We look forward to seeing you at the upcoming Financial Success Summit and please remember that if you have any questions whatsoever, our team is here to help you. Simply call (800) 270-3357 or email customerservice@jamessmithcompany.com

Taxes, taxes and more taxes! Taxes have been the featured topic of the recent political debates as well as a featured theme in most Americans’ personal lives. If you are like most of the 154 million people who are expected to file a return this year, you have been burning the candle at both ends to get everything done before this annual deadline.

Experts estimate that there were more than 1,700 changes to the IRS tax code for the 2009 tax return filings. With so many changes to the code, many of which have huge financial implications to individuals alike, it is sometimes hard to stay on the ball. An even more daunting task is the one charged to the IRS because they are responsible for keeping track of every filing in the United States.

To put everything into perspective, we headed to the IRS’s website (www.irs.gov) and researched how many people, corporations, companies and partnerships are expected to file this year. We also wanted to know what the mean income is, as well as the cutoffs for the top 1%, 10% and 90% of individuals. The results are below.

Type of Return Filed            Number of Filings

Individual Income Tax            154,345,853

Corporation Income Tax            2,537,825

Employment Tax            30,683,140

Excise Tax            865,216

Gift Tax            252,286

Estate Tax            46,251

Tax Return Highlights            Figures (TY 2007)

Corporations filings with $250M+ in assets            14,783

S-Corporations filing            3,993,952

Top 1% in AGI[1] $410,096

Top 10% in AGI            $113,018

Bottom 10% in AGI            $5,891

Returns with $1M+            393,165

State with most $1M+ returns            CA (57,697)

State with least $1M+ returns            ND (417)

Average individual return            $2,488

As you can see there is a lot at stake when it come to your taxes and in this tax season, the IRS has substantially beefed up its auditing department in order to collect as much money as possible. Now more than ever, Americans need to know how to legally reduce their AGI in order to pay the least amount of tax. In the coming years, taxes are going to increase. Believe it or not, now is the best time to start preparing for the 2011 tax season.

Get organized and begin documenting all of your expenses that are potentially tax deductible. Everything from meals, to business trips, could be potentially deductible. If you are at a point where you realize that you need some expert guidance in this area, we may be able to help. Simply call our customer service team at (800) 270 – 3357 and hit option #4.

For more information about tax statistics, see irs.gov.

Foreclosures Hit Celebrities and the Ultra-Rich

In difficult times, politicians, news syndicates and co-workers tend to focus exclusively on the woes of the middle and lower class. This trend is certainly understandable because most people in the United States belong to the middle and lower class and therefore relate to the problems and circumstances that are common to those respective classes. It may be surprising to some to know that the rate of foreclosures among the super wealthy is far greater than that of the other two classes.

The late Ed McMahon, host of the popular show Star Search and side-kick to Johnny Carson on The Tonight Show, fell into serious financial troubles with his home in 2008. His $4.8M home in Beverly Hills, California was in foreclosure due to delinquency in excess of $644,000. McMahon’s friend, Donald Trump offered to purchase the home and lease it back to McMahon. He continued to fight his financial setbacks up until his death at UCLA Hospital June 23^rd 2009.

While it is hard for most people to feel sorry for the select few who make millions of dollars and in the publics perception, blow it on lavish expenditures, the simple truth of the matter is that making millions of dollars doesn’t ensure prosperity. There is a famous adage that reads “Its not what you make that matters, its what you keep.”

Another notable celebrity whose spending habits have led to financial ruin is Nicholas Cage. He recently lost his Bel Air, California home to foreclosure after failing to sell it for his $34M reported asking price. He lost another home in New Orleans, Louisiana in November of 2009 despite earning over $40M in the same year.

The simple truth about money is that unless you have positive, passive cash flow, you will never have financial security. NBA stars, NFL greats, Hollywood celebs and Wall Street tycoons commonly suffer from an egotistical short-sided view of money. They believe that they will be able to command a seven or eight figure salary forever. If they had simply diversified their high income earning years into tax liens and deeds, which can double your portfolio every 3 to 5 years, many of them would be financially sound.

At the end of the day, you have to have control over your money and you need to understand that in order for you to retire comfortably and securely, you need to be able to generate 50% more passive income than you have in expenses. James Smith and his investments have generated tens of millions of dollars but you don’t seem him sporting a collection of Ferrari’s or boarding a Gulfstream jet. He practices one of the simple rules that he preaches… “Its not what you make that matters, its what you keep.”

On November 6th, President Obama signed legislation which extends the first time home buyer tax credit of $8,000 until April 30th of 2010. Many experts to date feel that the original $8,000 tax credit has had a contributory effect to the stabilization of residential real estate values, especially for property valued under $200,000. In fact, the Case-Schiller Index – one of the most respected real estate indexes has shown four consecutive months of real estate growth.

I believe that this tax credit will help further stabilize the housing market through at least the first half of 2010, especially because of the addition of an existing home owner tax credit. That’s right, there is now a tax credit of up to $6,500 for anyone who has lived in their property for 5 consecutive years, out of the last 8 years and makes less than $125,000 (single filers) or $225,000 (joint filers).

Regardless of whether you are applying for the first time home buyer credit or the existing home owner tax credit, binding contracts must be signed by April 30th, 2010 and closed by June 30th, 2010. Also, the law allows you to take the tax credit for either 2009 or 2010.

In a report released on November 2nd by Reuters, manufacturers are reporting an increase in output, as well as an increase in lead time for supplies.

The manufacturing industry is view by economists as a key sector, because ultimately supply starts with the manufacturing industry. When retailers are pessimistic about sales, they cancel orders and manufacturing suffers. When retailers are optimistic about sales, they initiate new orders and manufacturing benefits.

In October, manufacturers reported their 3rd consecutive month of growth in new orders and the highest rate of growth since April 2006. Furthermore, 13 out of 18 manufacturing industries reported growth.

According to industry experts, the growth was initially fueled by the need for retailers to replenish their depleted inventories; however, the more recent growth is merely the result of a increases in consumers’ buying patterns.

Although manufacturing is only one sector of the U.S. economy, its recent growth is something to be positive about.

When Fear Becomes The Enemy

When Franklin D. Roosevelt addressed the nation during his first inauguration, he looked upon a tired and worn constituency, beaten down by the weight and immensity of the Great Depression. Many of the banks had closed shop, unemployment was astronomical and he knew that the only way he could get the country back on track was by challenging people to over come their number one obstacle, fear.

In his landmark speech, he boldly declared that the “only thing we have to fear, is fear itself!” Even though many decades have passed since FDR spoke those famous words, they remain true – now more than ever.

It is interesting how logic and behavior are so often at odds with one another. When people shop for clothes, they look for sales. When we shop for computers, we want discounts and opportunities to buy directly from the manufacturer. When novice investors buy real estate however, they get excited when prices are on the… rise.

No single person can control the market. Not Greenspan. Not Obama. Not Trump. Like any game, you have to have a strategy to profit from the conditions that are in front of you. Although most investors that are active in the market today haven’t seen a recession like this before, they know that there is enormous opportunity. In fact, some have labeled this as the best buying period of our lifetimes.

Compared to five short years ago, today’s market offers a host of advantages.

Adjusted for inflation, housing prices in some metropolitan statistical areas have fallen to back to levels not seen since the 70’s.

Investors are able to purchase properties at prices that will immediately cash flow. In the hypermarket, investors often struggled to profitably rent properties unless they put 30% or more down. With prices at record lows and increased competition for rentals due to qualification barriers, new landlords are realizing increased profits.

As a facet of the economic stimulus package, the federal and state governments are offering tax credits and other benefits for first time homebuyers. Albeit, investors typically cannot participate in these benefits directly, smart investors are positioning themselves to indirectly benefit by purchasing discount properties directly from banks and are profitably reselling them to first time homebuyers.

In today’s market, seller financing has become a staple, especially for the commercial real estate category. When lenders make it hard for buyers to qualify, they are indirectly impeding sellers from being able to sell. This creates a perfect storm for seller financing. Remember the key to seller financing is an effective presentation.

Closing costs are always a negotiating point, but in the midst of the hypermarket, it was common for the buyer to pay the closing costs, in order to make their offer stand out. Therefore, even if the buyer had 90% loan to value (LTV ) financing, they still had to come to closing with a fair amount of cash. Current financing is conventionally around 80% LTV; however, sellers are now stepping up and offering to pay all of the closing costs for a potential buyer. This reduces the cash that a buyer needs to bring to closing.

This above list is only a short run-through of the common and obvious benefits of the current market. Less obvious, but enormously powerful strategies include subject-to offers contingent upon loan modifications and the shorting of subordinate financing.

In the end, the only thing that can hold a person back in this market is the fear of getting involved. Fear is a natural part of life, it cannot be avoided and to a small degree, it is a healthy emotion that causes us to double check our facts and figures.

What people have to ask themselves is whether or not they believe that there is money to be made in real estate. If your eyes are open, you will notice that money is being made – it is simply being made by savvy investors these days rather than any person who can qualify for a mortgage. The fact that real estate can be profitable is undeniable and if you didn’t believe this to be the case, you probably wouldn’t be reading this article.

If you answered, “yes” to the question about the potential to earn income from real estate, then the only question left to ask is what difference there is between you and the people who are succeeding in this market. I believe that the great divider between the real estate have’s and have not’s is training and confidence.

There are plenty of people who had all of the money in the world a few years ago and today they are hard stretched to pay monthly expenses. On the other hand, there are countless individuals today that are having trouble with monthly expenses; however, with the right training and support, soon will have all the money in the world.

Remember, your past and present don’t predict the future. If you are looking to discover financial freedom, this is simply the best opportunity to do so in decades… you just need to formulate a game plan based on the trends of the current market.

If you are serious about finally making a difference in your life through real estate, you owe it to yourself to invest in the training and support to get yourself there.