I have recently worked with several families from Edmonton Alberta who have learned about the substantial bargains that are available in Arizona.  They have purchased homes that were bank owned or that were available as short sales. In both of these instances the homes have been purchased at prices that were around 50% of what the prices had been just a couple of years ago.  One gentleman from Edmonton told me that if he bought the same home back where he was from in Canada it would have cost him three times as much.

 The west side of Phoenix grew rapidly in the last few years and the prices for single family homes rose very quickly.  Some of the owners refinanced their homes assuming that the continuing inflation would make the homes worth a lot more when they decided to sell in a couple of years and there would be plenty of money to pay of the new mortgages.  When the real estate market turned up side down most of these home owners found the value of their homes started to go down and soon many owners were stuck with mortgages that were way over what the homes would actually sell for.  Some of the financial situations of the owners changed and as they could not sell the homes for the money that was owed on them some of the homes were abandoned and subsequently foreclosed on.  These homes went back to lending institutions that were required by law not to have a large percentage of their assets in real estate and so they were forced to sell these homes as quickly as possible.  For people who had the time to look and the money to buy there were many great bargains beginning to show up in real estate.

Many owners of homes with mortgages that were way over the current value of the homes in question wanted to sell their homes but didn’t want to be involved in foreclosures and so they decided to try the short sale.  Their credit would not be so adversely affected and they would be able to purchase another home in a couple of years and once the short sale was complete the lending institution would not have the right to come after them for more money. 

When the short sales and the foreclosures were added to the list of homes that were being sold for greatly reduced prices in some areas on the west side of Phoenix there was a list of bargain properties that began to exist and soon there were people from all over the country beginning to look at the housing market in the Valley of the Sun.  Now there is a large group of people from Canada who are involved in purchasing a retirement home or a second home in the Phoenix area.  I have had the pleasure of helping several families find homes in the area that proved to be huge bargains for them. I can help with transportation in the area and names of realtors who can facilitate transactions that will save as much as 30% or 40% and even more on your next purchase. http://bit.ly/cLpRDKIn the past couple of years there have been a large number of people from Canada who have come to the US to buy homes. It’s because the real estate in some areas of the US is a lot cheaper than it is in Canada. In some areas houses can be purchased for about one third of what it would cost for a similar home in Canada.

I have recently worked with several families from Edmonton Alberta who have learned about the substantial bargains that are available in Arizona. They have purchased homes that were bank owned or that were available as short sales. In both of these instances the homes have been purchased at prices that were around 50% of what the prices had been just a couple of years ago. One gentleman from Edmonton told me that if he bought the same home back where he was from in Canada it would have cost him three times as much.

The west side of Phoenix grew rapidly in the last few years and the prices for single family homes rose very quickly. Some of the owners refinanced their homes assuming that the continuing inflation would make the homes worth a lot more when they decided to sell in a couple of years and there would be plenty of money to pay of the new mortgages. When the real estate market turned up side down most of these home owners found the value of their homes started to go down and soon many owners were stuck with mortgages that were way over what the homes would actually sell for. Some of the financial situations of the owners changed and as they could not sell the homes for the money that was owed on them some of the homes were abandoned and subsequently foreclosed on. These homes went back to lending institutions that were required by law not to have a large percentage of their assets in real estate and so they were forced to sell these homes as quickly as possible. For people who had the time to look and the money to buy there were many great bargains beginning to show up in real estate.

Many owners of homes with mortgages that were way over the current value of the homes in question wanted to sell their homes but didn’t want to be involved in foreclosures and so they decided to try the short sale. Their credit would not be so adversely affected and they would be able to purchase another home in a couple of years and once the short sale was complete the lending institution would not have the right to come after them for more money.

When the short sales and the foreclosures were added to the list of homes that were being sold for greatly reduced prices in some areas on the west side of Phoenix there was a list of bargain properties that began to exist and soon there were people from all over the country beginning to look at the housing market in the Valley of the Sun. Now there is a large group of people from Canada who are involved in purchasing a retirement home or a second home in the Phoenix area. I have had the pleasure of helping several families find homes in the area that proved to be huge bargains for them. I can help with transportation in the area and names of realtors who can facilitate transactions that will save as much as 30% or 40% and even more on your next purchase. http://bit.ly/cLpRDK

What is the retirement path less traveled? It is that path not littered by new cars turned old, with all of the car payments in between. It is a path not marked by frequent diversions on expensive vacations. It is a path not accented by conspicuous, debt-driven consumption, as we try to maintain appearances and keep up with our confused peers. Instead, it is a path towards financial independence, which is my definition of “retirement”, i.e., being able to choose if or how much you will work for income.

A recent Forbes article makes a critical point. Having a high income by no means translates to having the wealth needed to achieve financial independence. How can this be?

The essential problems with choosing the wrong path toward retirement arise from contemporaneous matching of spending with income. As we grow our families and our incomes, we make the unfortunate decision right then and there to grow our lifestyles. As a result, a minimal net worth at age 25 earning $30,000 becomes an equally minimal net worth at age 50 making $100,000. Sub-consciously or even consciously we say to ourselves and others: “I work hard, I make a good living, so I deserve to live like it now. Everyone else is doing it. I have plenty of time to save.”

Actually, you don’t.

If you think like that, you will have nothing in the retirement plan basket to show for years of earning and spending.

When you reach your baby boomer years and realize that the retirement nest has no eggs in it, you might give up, thinking that matters are hopeless. Instead, you keep spending. That’s the wrong attitude. It’s defeatist and it will lead to a retirement planning failure.

So what are the alternatives that will put on the retirement path less traveled?

First and most obvious, cut recurrent spending. Start with the simple things, some of which we have already done. This can include eliminating or at least scaling back some of your communications costs, e.g., your landline telephone and bloated cell phone plans. The same approach should be taken towards satellite and cable bills. There are plenty of ways to access free online entertainment. To get you started, pay a visit to Clicker, a brand new site that is like the TV Guide of the internet. The potential savings are significant, if you add them up over time.

Second, downsize now rather than later. This is actually a good time to sell (if you are not underwater on your mortgage) because of the low interest rates and the recently extended home buyer tax credit. You don’t need all of that room, I promise. Don’t believe me? Read this story about small house living. Inspiring, isn’t it? The benefit of downsizing now is to free up your home equity to boost your retirement savings.

Third, earn more on your money. Study and learn about investing for retirement. This study can include asset allocation strategies if you are interested or something as basic as selecting a couch potato portfolio. For your active spending accounts, find a local or community bank that pays high interest.

Fourth, plan to maximize your Social Security retirement benefits. Don’t automatically start collecting at age 62. That can be devastatingly short-sighted, particularly considering the impact on spousal and and survivor benefits.

Fifth, identify potential sources of alternative income for now and in retirement. These can include using your creativity to generate income, selling your expertise online, or even online teaching. Making a little extra money on the side can replace a lot of missing retirement savings. For example, assuming a 4% retirement annual withdrawal rate, making just $500 per month in alternative income is the equivalent to having an extra $150,000 in your retirement nest egg. That can really help overcome having traveled down the wrong retirement path earlier in life.

I’m sure you can come up with some other equally good ideas. The key is to identify the retirement planning path you have been on. If it’s the wrong one (the one more traveled), get off it now and begin a new journey toward financial independence.
Posted by Mr. Goto of GoTo Retirement