Fortune 500′s posted their Biggest Losers of 2007. Some I was not surprised by and some I’m rather shocked about.
- General Motors (loss 38.73 billion USD)
- Sprint/Nextel (loss 29.58 billion USD
- Merrill Lynch (7.77 billion USD)
- Advanced Micro Devices (3.38 billion USD)
We knew GM was having problems. With losing as much as ExxonMobil made in profits during 2007, I’m staggered by the irony. With Sprint, we all knew it was just a bailout of Nextel and to provide a transition as people move to more standard wireless connectivity. Merrill Lynch was hit hard by the falling real estate so we all expected it. The one I was surprised about was AMD. The CEO, Hector Ruiz, sees it like I do though. With the acquisition of ATI, AMD had to spend a little to prepare themselves for the future, calling 2007 a “transitional year”. This is going to mean excellent big things for them because of GPU and CPU integration, but the combination of the purchase and the slow release of Opteron and Phenom processors set them back shiny gem.
With reports such as this one at Bloomberg, shed some alarming light into the dark world of the U.S. real estate economy. Some of the highlights include a 16 percent decrease in the average price of a home in Tampa while San Diego is the third worst in the nation, with a 21 percent plummet in value. Sacramento’s value dropped the most at 28%.
Watching this happen, I kind of believe it’s just beginning. I don’t know exactly how long it will continue, but I’m sure it’s not over, and I know things will turn around again. I feel that we’ll be experiencing more factors over the coming months that will be pulling down the value of home prices even more. We’re also seeing an increase in the unemployment filings, and as those increase we will likely expect to a corresponding increase in foreclosures which will affect the overall value of homes. Interestingly enough, the decrease in value will also affect tax revenue related to price of homes which has a negative impact on civic infrastructure.
In Dallas from February 18th-19th, The Learning Annex will be hosting The Real Estate Wealth Expo at the Dallas Convention Center. They will have over 70 speakers. In the list of Keynote Speakers, they’ve got some big names.
- Donald Trump is presenting How to Get Rich with Donald Trump.
- Robert & Kim Kiyosaki are sharing Rich Dad, Poor Dad: The Secrets of Wealth with Robert & Kim Kiyosaki.
- Anthony Robbins is giving Unleash the Power Within! with Anthony Robbins.
- George Foreman will be presenting Success Secrets Of Knockout Entrepreneur with George Foreman.
They’ve got some specials on registration, and for two days and the presentations, the cost isn’t as bad as I thought it was going to be. I’m highly considering attending.
This lesson seems to be one of the longest in the book. It’s a very thorough lesson on the value of home ownership and does very nicely explaining a potential buyers options. Mr Chilton stresses that owning a home may not be for everyone. He states the importance of making sure you’re saving your 10 percent first and meeting your other financial obligations, including saving for retirement and protecting your estate with insurance, before committing to the purchase of a home. This has probably been the most comforting book supporting my decision to not immediately purchase a home. I’m not quite sure I’m ready for the financial impact. He states that while it’s not exactly all that much more, it does have considerable costs. He explains PMI, FHA and VA loans. For more about mortgages, he suggests The Common Sense Mortgage by Peter Miller. He discusses the advantages of condo ownership. He explains that it may not benefit to prematurely pay a mortgage, but also explains why a shorter term can save thousands. He makes it clear that if you’re obligated to move within the next one to two years then after fees and expenses, it may be more costly to purchase a home compared to renting. He explains the tax benefits of home ownership. With so much information, it’s easy to forget that the main lesson of this chapter is to carefully consider buying your own home and make an informed decision.
As I’m pondering putting off buying a house, all of the news regarding an alleged housing bubble is of great interest to me. It seems as though there’s two sides who are decisively split on whether or not there is one, or if it’s even possible that there could ever be one.
Here’s some articles saying that there’s not:
Here’s some saying that there is:
Unfortunately for those of us desperately wanting to finalize our decision and be comfortable with it, the disagreement is unsettling. This is where financial literacy proves valuable.