STARTING A FAMILY BUSINESS??

Did You Know?

The word millionaire was first used by Benjamin Disraeli in his 1826 novel Vivian Grey.

If you stack one million US$1 bills, it would be 110m (361 ft) high and weight exactly 1 ton.

A million dollars' worth of $100 bills weighs only 10 kg (22 lb).

One million dollars' worth of one-cent coins (100 million coins) weigh 246 tons.

TIP is the acronym for "To Insure Promptness."

Quote of the Day

Book Review

Keep Your Brain Alive: 83 Neurobic Exercises
By Lawrence Katz, Manning Rubin

No more punch lines that just slipped away. No more names on the tip of your tongue. No more senior moments! Drawing on cutting-edge neurological research, how to keep your brain alive: 83 neurobic exercises brings help to everyone whose memory is starting to slip. Devised by Dr. Lawrence Katz, a professor of neurobiology at Duke University Medical Center, and Manning Rubin, author of 60 Ways to Relieve Stress in 60 Seconds, here is a regimen of mental cross-training that can be done anywhere, by anyone, at any time of day. The premise is simple: When you exercise the brain, you release natural growth factors called neurotrophins, which in turn enhance the brain's level of fitness. And nothing so easily stimulates the brain as breaking routines and using the five senses in new and unexpected ways. So if you're right-handed, wake up tomorrow and brush your teeth with your left hand. Or close your eyes before you get into the car and then get the key into the ignition. Every time you open a new circuit in your brain, it's like doing a round of mental sit-ups, without the pain.

Keep Your Brain Alive: 83 Neurobic Exercises
is available at 1111DVD.com.

If you know anyone who is looking to buy, sell, or refinance a home or commercial property, or need a reverse mortgage - please forward their name and contact info to me. I will happily provide the same high level of service that I have provided to you. The greatest compliment you could possibly give me is the referral of your
friends, clients, and family!

These lines spoken by Michael Corleone to his brother Fredo could very well apply to small family businesses, which are critical to the nation's economy. In fact, according to the National Federation of Independent Businesses, more than 1.2 Million businesses across the country are owned and operated by spouses. While these thriving ventures in capitalism are great for the economy, they can cause a lot of stress on your family relationships. That's why experts recommend you follow a few simple suggestions to keep the business--and your family life--running smooth!

Only Fools Rush In. Starting a family business is a huge commitment. Although it sounds romantic, it's a lot of work to...well...make it work. Before you jump in, consider what type of business is truly right for you; how the business will impact your financial plans; and how you'll still make sure you have time in your schedule to enjoy non-business related family time. Because, as The Don says, "a man who doesn't spend time with his family can never be a real man".

Put It In Writing. The first step to making your dream a reality is putting together a business plan. The Small Business Administration has a great website that can help you write your business plan. You'll also need to apply for a business license, tax identification number, and even business loans. Again, you can find the most requested business documents on The Small Business Administration website.

Clarify Roles and Responsibilities. To help avoid frustrations and arguments in the future, make sure everyone agrees on who will be responsible for what. Give yourselves titles and draft job responsibilities...then make sure everyone is happy with their role, and that all of the important everyday duties are covered. Make sure you determine who will pay the bills, who will negotiate contracts, who's in charge of the marketing plan, who does the hiring, and so on. You don't want to risk overlooking something or arguing about it later.

Protect Yourself. More important than having Luca Brasi as your bodyguard is making sure you plan your finances and stock away plenty of money to hold you over, especially during the start up phase. Most experts recommend having three to six months worth of living expenses in savings, depending on whether one or two people in the family will be relying on the business as their main income. You'll also want to meet with a financial planner to make sure your retirement and other financial plans stay on track - and if you need a referral to a great financial pro, just let me know.

Set Boundaries... and Stick to Them! It's easy to let the business take over your family life. Little by little the business successes and setbacks slip into family conversations... it's only natural. But don't let them take over completely. To alleviate this problem, make sure you set up regular "business meetings" where you can talk about key issues and exchange ideas about the business. In addition, establish some off-limit times where you'll devote yourselves to each other and your family life. After all, even family businesses need some time "away from the office."

Starting a business with your spouse or family is an exciting time. The key is to harness that excitement while staying cool-headed enough to make smart personal and financial decisions. If you or someone you know needs help with these important details, please don't hesitate to call. I'll be happy to discuss your needs and put you in touch with other professionals that can help

This Week in Mortgage News!

Analysis of the Fed 3/4 Point Cut

Mar. 18, 2008. 2:15 PM EST

The Fed cut the fed funds rate by 3/4 point to 2.25%.

PIMCO CEO on Fed Accepting MBS

Mar. 18, 2008. 1:06 PM EST

Mohamed El-Erian, co-CEO and co-CIO of PIMCO, advises the Fed to purchase outright high-quality mortgage securities.

Treasury Secretary Henry Paulson Interview

Mar. 18, 2008. 7:10 AM EST

Matt Lauer discusses the economy's sharp decline, with Secretary Treasury Henry Paulson.

Street Smarts!

So the Federal Reserve cut rates again. Many mortgage applicants are calling their mortgage representative and expecting a lower interest rate. Others who have been waiting to refinance are puzzled as to why mortgage rates have not moved lower during recent 5 Fed rate cuts. In fact mortgage rates are now higher than they were before the Fed began cutting rates by in January. This is difficult to explain to many consumers who have watched a 2.5% reduction by the Fed with no benefit in mortgage rates.

Is a Fed rate cut really good news for mortgage rates? The facts may be surprising. The Fed can only control the Discount Rate and the Fed Funds Rate. This is very different from mortgage rates. A mortgage rate can be in effect for 30-years, a rate that is set by the Fed can change from one day to another.

Another common mistake is in thinking that 30-year Treasury bonds or 10-year Treasury notes are directly pegged to mortgage rates.

Those are government securities that are backed by the full faith and credit of the U.S. government and have no direct effect on mortgage rates.

So what are mortgage rates based on? As it turns out the answer is mortgage-backed bonds known as Mortgage Backed Securities (MBS). Bonds issued by Fannie Mae and Freddie Mac (MBS) and the trading performance of those bonds will determine the direction of mortgage rates. Finding the catalyst that causes mortgage bonds to move will give you the keys to finding out what makes mortgage rates rise or fall.

We know that inflation will always be a negative for any long-term bond because it eats away at the future returns. Since the bond will pay a set amount over a long period of time, that amount will be less valuable if inflation is high. Over the past several years, one catalyst that seems to be working in the opposite direction of MBS prices is the Nasdaq and broader stock market.

As bond prices rise, interest rates fall. As bond prices fall, interest rates rise. The charts show the Nasdaq Composite Index and the Fannie Mae 6.5% mortgage bond tend to follow paths that are almost mirror images of each other. The consistency of this behavior is astounding.

As the Nasdaq moves higher, bond prices move lower causing interest rates to rise. As the Nasdaq declines, mortgage bonds benefit, causing mortgage rates to fall. Additionally, and unlike common opinion, Fed rate cuts have had virtually no direct effect on mortgage rates. Moreover, it appears that since Fed rate cuts act to stimulate the Nasdaq, they have a negative effect on mortgage rates.