Debbie has nearly 20 years of investigative experience and journalism on topics of insurance, mortgage, and financial advice.

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Money Strategies with Debbie

TDD 119 | Becoming A Millionaire

How To Become A Millionaire, Seniors Need Help, Mortgage News

TDD 119 | Becoming A Millionaire

 

Becoming a millionaire is something that many people daydream about. Most of us probably want to become millionaires, yet we tend to get so caught up in some seemingly innocuous habits that are actually hampering us from making that million. Debbie Bloyd looks into the things that wealthy, self-made people have in common and translates them into useful guidelines that to actually follow. Getting rich is not easy, but it’s not necessarily impossible, either. It all boils down to the possession of a winner’s mindset and fostering healthy relationships with your work, your money and the people you surround yourself with.

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How To Become A Millionaire, Seniors Need Help, Mortgage News

How do you talk to your kids about money? How do your kids feel about money? How did you feel about money when you were a kid? I know, it’s a lot of questions about money.

Money Does Make The World Go ‘Round

That’s because money does make the world go round. It helps you buy cars, take vacations, support your family and clothe you. It has a lot to do with our psyche and when we feel like we fit in socially, status-wise and all this stuff. What can we teach our kids about money? There is a gentleman who has interviewed more than 1,200 millionaires and billionaires over the years. His name is Steve Siebold. He has spent a lot of time studying money and kids about money. Now there’s one question he said he always asked, “What did you teach your kids about financial success?” His latest book, Secrets Self-Made Millionaires Teach Their Kids is everything that you should cover. The sooner you can get your kids thinking about money the way the wealthy do, the better off they’re going to be.

Here’s some lessons he said that you need to instill in your kids early on. Number one, success isn’t free. Wealth and success take work. Becoming financially independent will be the fight of your life. You have to be willing to sacrifice your time, sleep and leisure to build something great. It’s not glamorous or pretty. While your friends are out having fun, you’ll be working, but the payoff is great. Get rich solving problems. Top earners know that money flows from ideas and problem solving. If you want to be rich, solve a problem. If you want to be very wealthy, solve a bigger problem. While the masses have small problems and they’re worried about that, employers and people that serve the world make the most money. Look at all the millionaires and billionaires. They’re solving big problems. Expect to make it. The wealthiest people set very high expectations. Almost every self-made person he said he’s interviewed over the years has told me that he expected to be rich.

You’ll want to do the same. Don’t be afraid to think big. Expect to be rich in your 20s or 30s. It’s not going to happen overnight, but it doesn’t have to take a lifetime either. Especially if you look at all of the young people that are on the Forbes list and the new millionaires and billionaires, they’re younger and younger. Surround yourself with successful people. That’s a good lesson for all of us. You hang out with people that you either think you’re like or you want to be like. You need rich friends. The sheer exposure to their heightened level of awareness around everything related to wealth is going to dramatically extend your thinking. The next thing you need to do is fall in love with work. I love what I do. I love talking about money and finances. I love doing mortgages. I love seeing people go through the process and they dread it, hate it and they’re scared of it. I make it tolerable.

The sooner you get your kids thinking about money, the better off they’re going to be. Click To Tweet

There are some days that I ask them for things they don’t really like, but my once you decide to buy a house, someone has to help you over the winning line. We got to get you over the edge to where you get the keys and you get to move in. That’s my job. You’re always happy at the end. The middle part gets a little iffy, but I’m supposed to make you get over the finish line. To get the keys to the house, that’s the goal. To get your money into retirement with you. That’s the goal. I love what I do. To me, it’s not work. I love what I do. There’s a lot of other things that I could be doing, but I love talking about money, so I do this. I do all the shows that I do because I want to teach people about money and make it not so nebulous and not so scary of a thing. I fall in love with my work. You should fall in love with your work.

When you fall in love with your work, it’s not work anymore. You wake up every day with excitement, and that helps you work longer and harder. Be happier, you’ll produce better work and you’ll become more successful. Money solves most problems. The rich aren’t afraid to admit that money can solve most problems. Being rich won’t make you happy, but it will solve problems like health care, a roof over your head, clothes, a car that runs and education for your kids. Money does solve those things. It doesn’t solve everything and it doesn’t make you happy, but it does solve some things. If you have a problem, you can usually make it disappear by writing a check. Although if you don’t have money, it’s got its own problems too. If you have too much money, then you’ve got lots of other problems. At least it gets you over the hump. It gets you out of existing and into a life that you want to live.

Invest. The rich are investors. They’re not spenders. They invest their money now so they’ll have more in the future. To be a successful investor, stick to what you know or things that you’re interested in. I don’t know anything about Bitcoin. I don’t have any money in Bitcoin. I don’t know if it’s going to do well or not. I don’t know about a lot of stuff. I invest in things that I know about. That’s one of the best investing philosophies, or you trust fund managers like Guggenheim or Oppenheimer or Jackson or whoever you invest with. Trust that those guys know what they’re doing. Stick with what you know. My dad lost a lot of money when I was younger. He went from being a CPA and a Vice President doing tech stuff in the oil business, super successful, to deciding to open up a seafood restaurant in the middle of Phoenix, Arizona. He built the whole restaurant and it looks like a ship. He hired people. He wasn’t a chef. He wasn’t a restaurateur. He didn’t have any training and he just thought it would be fun. He lost a few million dollars. Stay with what you know. Don’t get out there on the limb, especially when you retire and think it would be fun to do something else and take your entire nest egg and gamble it. It’s not a good idea.

TDD 119 | Becoming A Millionaire

Becoming A Millionaire: To become financially independent, you have to be willing to sacrifice your time, sleep and leisure. It will not be glamorous or pretty, but the payoff is great.

 

Spend smart. No matter how big your paycheck is, you won’t be rich unless you are disciplined enough to keep what you make. If you make $400,000 a year and you spend $500,000, you’re still going to be upside down. If you make $100,000 and you spend $50,000, you’re going to be saving for tomorrow. You deserve to make it. The top earners tell themselves they deserve to be rich while the masses think getting rich is reserved for the lucky few. Some of them think it’s downright terrible. They don’t like rich people. They don’t like the things rich people buy. If you are repelling all that stuff, you’re not going to be getting it either. Money and opportunities are limitless. Rich people see money as abundant. Poor people see money as scarce. People that hold on to things and hoard it, more can’t come in and more can’t leave. My idea is I can always cut back on what I’m spending, but I’d rather ramp up and make more. I don’t want to change my standard of living. I’d rather work harder.

Choose prosperity over entertainment. The rich use their time differently than the average person. The masses spend their time while the rich invest their time. Spend your time basking in entertainment and you’ll struggle for your whole life financially. Invest your time in creating solutions to people’s problems and you’ll never lose a minute’s worth of sleep worrying about how to pay the mortgage. It’s just going to come. Focus on earning. The quickest way to get rich is to generate multiple revenue streams. If you want to focus on earning, keep the big picture in mind too. Total focus on money might lead you to do anything to get it and I don’t recommend that. The formula offers you fulfillment of doing the work you love while profiting from solving other people’s problems.

Rich people are not always smarter. Sometimes they just work harder and longer. The masses falsely believe that rich people are smarter than everyone else. The truth is most of them are no brighter than the average person struggling to make ends meet. You don’t have to be a genius to make it big. Getting rich is less about intellect and more about focusing on the accumulation of wealth. How many people do I know that I take care of their money and finances or are my clients in the mortgage business, self-employed and they do not have more than a high school education? I could do any part of my job without a college education. I do not have a Doctorate or a Master’s. I don’t have to, to do what I do. I have to be able to have a money IQ, be able to run a calculator and give decent financial advice to people that have no clue. None of that required a college education. I have to pass tests, licensed, do background checks, be a fiduciary, but I don’t have to have a Doctorate degree in mathematics to do what I do, and neither do you.

Success isn’t free. Wealth and success take work. Click To Tweet

Not everything is driven from the educational system. Some of it you have to learn and take tests for and you can be successful. If you know of someone that was a plumber or electrician that started their own business, they’re self-employed. They made their own way and don’t even have a college education. That is not part of the deal. You don’t have to have a college education to make it. Just start reading the millionaires’ and the billionaires’ biographies. Most of them are different than what you think. Wealth does create freedom. Being rich won’t make you happy, but wealth does offer the freedom. Being rich allows you to live anywhere you want, do anything you want and be anything you want to be. Wealth gives you the power to make your own rules as long as you don’t break any laws or hurt any people. He said he wasn’t for sure that it made you any happier, but it will certainly give you the freedom to make those choices for yourself.

My name is Debbie Bloyd. I’ve been a mortgage lender. You’ve known me by different names throughout the years, Davis, Lewis and I’m back to my maiden name. If you need help with your money and your finances, if you need help getting a mortgage, if you want to talk about long-term care, disability insurance, insurance policies that allow you to access them when you have a critical care condition of cancer, heart attack or stroke, please call me. I love doing nothing more than talking, saving your money, protecting your money, investing your money, buying homes with your money. That’s what I do. That’s what I love. If I can help you, please call me. My direct number is (979) 220-3018. I’ve got a great website. I’m updating it all the time. My new logo’s there. The new name, it went from The Debbie Lewis Show to Money Strategies With Debbie. Log on, email me and let me know how I can help you. I will be happy to see you nights, weekends and any way I can.

The Answers Are Different

“Is now a good time to refinance your home or to buy a home? What about rental property?” These are questions that I get asked every day. I’ve been in the mortgage business for over 23 years now and the questions always stay the same, but the answers are different. It depends on how much of your money is already invested in real estate and. how much of it do you need cashflow versus investment. I’ve got a couple of rental properties. I’ve also got a couple of properties under construction. I bought little houses and I’m building bigger, nicer houses in the place and I’m flipping them. Why would I want to do that instead of have renters live in them? It depends on what do you want to spend your time doing and how do you qualify for all this. Traditionally, people call me and say, “I want to buy a house or build a house.” I tell them to stop right there. There’s two totally different ways to do that. When you build a home, you need to have 20% equity with the finished product, whatever that appraised value is.

TDD 119 | Becoming A Millionaire

Becoming A Millionaire: The rich aren’t afraid to admit that money solves many problems. It won’t make you happy, but it will solve your problems.

 

If you’re building a $600,000 house, you need to have 20% in the product when we first start the loan. If you buy a $600,000 house, you can put as little as 5% or 10% down and still get a loan. You need to figure out what your finances are, how much you plan on spending and what do you have as disposable income to use for that. It’s the same thing with buying rental properties. There’s a formula now for everything. There’s a formula to find out if you can charge enough rent to pay for your principal interest, taxes and insurance. There’s a formula to find out how you qualify for rental properties. The more properties you own, the more money you have to have off to the side in an account as a safeguard. You have to have a cushion is what we call it. You can buy more properties probably with what you can afford, but you have to maintain that cushion so that you qualify.

Another question that I get asked often in the mortgage business is, “What about me, Debbie? I’m self-employed. I’ve only been in the business for 1.5 years and I want to buy a house.” When you’re self-employed, you have to be in business for two full tax years in order to qualify for most of the loan products. However, there is a loan that’s based on your bank statements. It does not take tax returns into consideration. A lot of people can qualify with a bank statement loan, it just depends on what their credit is and what the minimums for the programs are through different lenders. If you have a question about, “What do I buy? How do I buy it? Can I qualify?” don’t go out and start looking for the new homes or the rental properties until you get your money part in order. We don’t want to get you all excited that you can buy rental property and then find out you don’t have enough cushion or you can’t qualify because of your employment history. Come to me first.

Most real estate agents will tell you before they show you a property, they want you to have something called a pre-approval letter. I do pre-approval letters multiple times a day for clients when they’re looking for properties. We usually put the pre-approval letter that goes out very property-specific. I’ll say your name, how much you’re qualified to buy and the address of the property that you’re offering the contract with. It takes a lot of time, but if you make different offers on different houses during the weekend, you’re going to need different letters. The reason you do this is so that when you have an opportunity to ask for closing costs, that gets added in there as well. We don’t want to tip our hand and how much we’re qualified for if we want to use that down payment money. I get a call everyday saying, “Debbie, I don’t have a lot of down payment money. Do you have a way that I can qualify for something, some kind of down payment assistance?”

If you want to be rich, solve a problem. If you want to be very rich, solve a bigger problem. Click To Tweet

One of the best accounts of down payment assistance that we’ve found is the SETH Program. You can google SETH down payment assistance and you will find a website that’s going to tell you it’s a forgivable loan/grant. What that means is if you stay in the house for seven years, you get to keep the money. If you sell the house within seven years, you have to give the money back when you sell the house. We consider it a grant. Not everybody can qualify, so you do need to go to the website, find out if you qualify, then you can earn up to $7,000. Take a short class online, find out about the program and money management. At closing, you’re awarded that grant. There are down payment assistance programs. There is not a “teacher program” or a “fireman program” or other specific programs, but there are loans that are marketed as that so that you have a bigger ratio to debt. Your income to debt ratio is a little bit more in line. There are different programs available.

Because I’m independent, I work with several different lenders. If one company doesn’t have it, maybe the next company I have does. There are many choices. When you go to a bank, they typically only have 1 or 2 choices. Using a company like myself, DLB Mortgage Services, it’s an independent company, I work with different lenders. There are many types of products available. Don’t take no for an answer. You’re going to want to call and ask around get a second opinion or maybe a third opinion. I’ve been in the mortgage business for over 23 years now. I’d be happy to shop rates and compare. We’ve got some great offers available. Some packages include a free appraisal when you use our companies so please don’t take the first quote that you get. Call around and get second opinions. At DLB Mortgage Services, we do VA loans, FHA loans, conventional loans and a lot of different types of construction loans. If you want to build something from the ground up, we work with banks and lending companies that do nothing but construction loans.

One of the biggest products that I do, and I do them all over the state of Texas, are reverse mortgages. That is an FHA product. It’s available when you’re 62 years of age or older. If you have parents or family members that could use some more additional income as they retire and want to stay and maintain their residence and grow old in place, aging in place is what we call it, then you’re going to want to look at a reverse mortgage. You can find good information about them on the internet as well as bad information. A lot of that bad information is not correct. The loans have changed. The way you qualify has changed. There’s now an investment tool within a reverse mortgage in there. Call and ask me questions. Tell me what you’ve heard in the news or in the media. Ask me how these different programs can work for you. VA is 100% financing if you’re a veteran and that VA funding fee has been waived if you prove that you have a disability of 30% or more. There’s a lot of savings that are available. You just have to ask the right questions. Give me a call, I’ll be happy to ask you a million questions and get you the right product for what you’re trying to do.

TDD 119 | Becoming A Millionaire

Becoming A Millionaire: Spend smart. No matter how big your paycheck is, you won’t be rich unless you are disciplined enough to keep what you make.

 

Learn How To Downsize

One of the things that’s nice to know is there are experts when you’re not an expert. You just have to know where to ask. I have been doing a lot of work with seniors and with reverse mortgages. It’s a big deal because Baby Boomers now have to learn how to downsize. They don’t need the big houses that they thought they needed. This could create another real estate boom in the years to come as more Baby Boomers are finding out that, number one, they don’t want to pay taxes on their big houses. Number two, they may not need that much space. Number three, they are finding that holding on to their stuff and putting it in lots of rooms gets very expensive. They’re not going to be able to use that money for the things that they need later in life, which is long-term care problems and expenses and help.

What I want to talk to you about is that if you have parents that would be the ages of Baby Boomers that maybe need to downsize, there’s a way to do this gracefully. There’s also a way to do it with a lot more money when you do a reverse mortgage purchase. A family in any state can sell a house for $500,000 and then they can take and buy a house for $500,000 and only pay a fraction of that cost on a reverse mortgage purchase. The reason this is going to be a difference of thinking is because we’ve done one thing for many years. We’ve tried to learn to pay our mortgages off and live in a house that’s free and clear. What we found is all of our money is sitting dormant in that house and we’re not able to tap it when we need it for healthcare purposes or to fund 529 plans for grandkids or whatever it is that we want to do. A lot of seniors are starting to look for houses and they’ve decided that their two-story house maybe doesn’t fit them anymore. When I talk to people about their retirement needs, one of the things I am talking about is mortgages.

What is aging in place versus downsizing? Which is better? By 2016, there were roughly 74.1 million Baby Boomers, which are people born between the age of ‘46 and ‘64 in the US. In 2030, when all the Baby Boomers will be between 66 and 84, the Census predicts the Boomers’ numbers will drop to only 60 million. As the Boomers age, an alarming trend has emerged. They’re entering their golden years with mortgage debt. Americans over the age of 60 were more than three times as likely to carry mortgage debt in 2015 compared to 1980. Much of the increase in the seniors’ mortgage borrowing is in the household below median income assets with no pensions. That’s a problem because the money that they have stored up is mostly in their homes. Past generations aim to have their mortgages paid off before retirement. I’m looking at a picture of the United States and everything is divided into states. You can click on any state and see exactly how many Baby Boomers still have mortgages. The numbers are staggering. Carrying a mortgage debt may offer an explanation as to why so many Baby Boomers prefer to remain in their current homes. Other factors such as retaining home equity, staying in familiar surroundings and a lack of affordable options also drive you to stay put.

You can be rich in your 20s or 30s. It’s not going to happen overnight, but it doesn’t have to take a lifetime either. Click To Tweet

I interviewed David Gest with Home Instead Senior Care a lot. He’s a great man and their job at Home Instead Senior Care is to keep you aging in your home, but you have to be able to provide that with either, number one, long-term care insurance or two, cash. Medicare does not pay for someone coming into your home and helping you. Therefore, if you need to access the money to get care to age in place, you’re going to need a reverse mortgage or a forward mortgage and get a cash out refinance, but then you have to pay it back. With the reverse, you don’t. There is a growing linkage between housing and health care and being able to stay in your home. People are greatly underestimating the amount of money it’s going to cost to keep equity in their house, age in place and pay for health care. You can’t do it all.

TDD 119 | Becoming A Millionaire

Becoming A Millionaire: The number of baby boomers who still have mortgages is staggering.

 

A lot of seniors are going to start downsizing or they should because they’re going to need access to that money. There are different ways to stay put in your home. Like I said, you could do a cash out refinance, just like those of us under 62 years of age do, but our jobs help pay for that house to live in. When you cease to have a job, you’re using your retirement, pensions, IRAs or Social Security to put more money into an asset that you’re not going to be able to get out. The problem with the United States is that we’re having a shortage of affordable homes under certain price ranges. In our town, it could be $300,000. There’s not a lot to pick from. In other cities, it could be much more than that because the price cost of living is a lot more. I tell seniors, “You always have a way to fix this. You want to give yourself choices. You can move somewhere.” They’ll say, “I would never move.” “You might have to. Do you want to move in with your kids?” “I could never do that.” “You will if you run out of money.”

The problem is to address these things while they’re young enough to still make the decisions, be happy with them and help them move all their belongings. The things that we need to look for are the tough conversations we have to have with our loved ones. This age bracket of people doesn’t like to share. They’re not going to come to the dinner table and say, “We have to downsize because we can no longer afford to live here.” What they’re going to say is, “I’ve been thinking about a smaller place, a one-story house,” or, “I’m going to need some help with health care cost,” or, “I have to let my insurance lapse because I can no longer make the payments.” A lot of the problems that our seniors are running into is they bought products maybe 20, 30 years ago. I met with a couple that were mad at their long-term care policy. Long-term care policies twenty years ago are nothing like the ones they are now. I have a hybrid policy that pays off as a term policy if I die and don’t use it.

I have a way to extend it for a lifetime of options rather than just a few years. There’s all kinds of ways and policies now. Back in the day, when these people bought their policy, there was a 90-day period where you could not get any help with your long-term care costs. You had to pay that out of pocket. It’s unfortunate because they don’t have the money to make it through the 90 days to get the help. What I tried to do with them is do a reverse mortgage to help structure their finances such that they could get a little help along the way and be able to get through that 90-day period to where they can have some help, but they need money to do that. It costs about $9,000. You say, “It’s only $9,000,” but when you only have $50,000 in the bank, $9,000 is a lot. It’s a fifth of what you have saved for your entire life. Plan early and plan often. If you think that your family member or neighbor or church member may be in trouble and they’re not telling you or you’re in trouble and you’re afraid to talk to someone, please call me.

When you fall in love with your work, it’s not really working anymore. Click To Tweet

Let me take a look at your finances. I’m a nice third-party person that can look at things in black and white and not be emotionally charged when I talk about your money. You’re emotionally charged with your money and I am with my money, but with someone else’s money, you can see it from a bird’s eye view clearly. “You’ve got too much money over here and not enough over there. We got to move some of this over there and this is how we do it.” It’s very non-emotional for me, but I’m dealing with people, as I sit there and talk to them, that cry and they get upset or they feel relieved that someone else can see the answers to their problems. Because sometimes when you’re too close to it, you can’t see it. Let me see if I can help you. Please call me anytime. My direct number is (979) 220-3018 or you can email me Debbie@MoneyStrategiesWithDebbie.com. I’ll be happy to help.

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