Style Secrets of Millionaires

01 February 2012

To start out the 2012 year, I wanted to take the opportunity to go back to a book that we had the privilege of gleaning some wisdom from in 2011 and that is the book called Stop Acting Rich and Starting Living Like a Real Millionaire written by Thomas J. Stanley, Ph. D.

As we open up chapter 3 the title of the chapter is “Does the Shoes Make the Man?” We’ve learned in the past discussions that the #1 car for a millionaire is a Toyota followed by Ford. We also learned that the #1 watch for a millionaire is a Seiko. So we can see in those two products, that we’ve looked at, that millionaires don’t typically spend a bunch of money but do buy quality. Also homes that millionaires typically live are priced around $300,000. So now as we go into shoes what are we going to find? Are we going to learn that millionaires also like to get quality but average price shoes or low price shoes? Or are we going to find that millionaires actually spend above average amounts on the shoes that they purchase? Let’s go right into it.

Home Sweet Home

25 January 2012

So now let’s look at the different cities and see really what’s happened over the past five years and even over the last year. First of all, over the last year it’s been pretty similar. In most of these major cities, that I looked in the United States, their real estate was relatively flat this year.

Let’s go and look at the city of Miami, in Florida, which it’s very expensive real estate peaked in March of 2007. From its peak to the average residential real estate prices in Miami today, the prices are down about 52.4%. Then as we go up that eastern coast we’re going to go to the city of Atlanta, Georgia, which is another major city on the eastern seaboard and we look at Atlanta and it peaked out a little bit sooner. Atlanta peaked out in December of ’06, and since then homes are down about 43%. Moving up a little farther north we go to New York , which was by far and away the most impressive city. When we got to January of 2007, prices in New York were already extremely high, and it was amazing for anyone to think that prices could go any higher for New York. Additionally, now that we’ve been in this real estate crash for a good five years you would think that New York would kind of be like Miami and go ahead and take a nice correction. Well that did not happen in the city of New York. New York home prices peaked out in December of 2006 and since then has gone down only about 10%. So the city of New York has by far and away held its home value better than any of the large cities that I researched.

2011 in Review-Several Investment Surprises

13 January 2012

As we look back on 2011, I believe the things that probably, in the investment market, stand out at me the most are these 4:

1. The U.S. stock market was relatively flat for the year.

2. Gold which is clearly in a bull market; during its strongest months from September through December actually went down.

3. Interest rates when many thought they had nowhere to go but up, again in 2012, they went way down.

4. Residential real estate remained relatively flat for the year as well.

So let’s go over each one of those individually.

Recession Investigation Part 2-A Bad Bet?

15 December 2011

Exxon’s revenue is down $20 billion dollars from $390 billion down to $370 billion and their fiscal calendar ends on December 31st. (So this is on December 31st, 2007 to December 31st, 2010.) Exxon is down 5.13% on their revenues, not bad. Their gross profit is down $20 billion, from $127 billion down to $107 billion. On the balance sheet Exxon had $34 billion dollars in cash, on 12/31/2007. Exxon, at the end of 2010, had $7.8 billion dollars in cash. Now that’s a 77% decrease in the amount of cash that Exxon is holding from the end of 2007 to the end of 2010. So that certainly makes sense for the recession that we’ve had, for the cash to be down 77%. But what about the debt? With the cash being down 77% you would hope that Exxon’s debt is not up that much. However, Exxon’s debt went from $7.1 billion to $12.2 billion over the past three years ending 12/31/10. That means that Exxon’s long term debt during this recession has increased 70%. So as we look at Exxon it is a little bit more inline of what we would expect. Exxon is one of the largest companies in America and its revenue is down, its profits are down, the cash is down, and the amount of debt that it has is up substantially. So Exxon, certainly from looking at their income statement they’ve been hurt. Looking at their balance sheet they’ve been killed, during this recession.

Recession Investigation-Are the largest corporations reported profits for real?

06 December 2011

I was talking to a client about the state of our economic conditions here in the U.S. We both agreed things seemed to be slower than they were in 2003, 2004, 2005, 2006, and 2007. However; as we look at corporate profits that are being reported we see record profits and profits that are higher than they were in 2007-2008. And so we began to ask, “how are these large companies doing it.” And that lead me to begin to research different companies and I began to look at some of the largest companies in America and to see what exactly has been going on here behind the scenes. Some of the research and data that I discovered, was very interesting.

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Style Secrets of Millionaires

Home Sweet Home

2011 in Review-Several Investment Surprises

Recession Investigation Part 2-A Bad Bet?

Recession Investigation-Are the largest corporations reported profits for real?

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