Financial Fresh Start

Your Five-Step Plan for Adapting and Prospering in the New Economy

 Financial Fresh Start

Author: Shari Olefson
Pub Date: February 2013
Print Edition: $26.00
Print ISBN: 9780814432297
Page Count: 320
Format: Hardback
e-Book ISBN: 9780814432303

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Excerpt

INTRODUCTION

A very simple question: If you think back to ten or twenty years

ago, how common was it for you to know or regularly hear

about folks in foreclosure, or folks deciding—strategically—not to

pay back their debts? What about cities and towns going bankrupt,

or huge financial institutions and even entire countries being bailed

out?

What about now?

What Does It Mean?

As the mother of two teenagers, I often wonder how commonplace

these sorts of things will be ten years from now and exactly what that

will mean, not only for our personal finances, but for our kids and

the legacy and country we leave behind for them. Is America still the

greatest nation in the world, or does it just look that way because

other countries are, at least for the time being, worse off?

My own childhood includes memories of my grandfather, a

New York City fireman, sitting at his desk every Saturday morning

and writing out checks by hand to pay his bills. Maybe you have

memories like that of your own parents or grandparents. Everybody

used good old-fashioned cash, and so people were acutely aware of

how much money they did or did not have. And, of course, it goes

without saying that they would never dream of spending money they

didn’t have. Back then, alternatives beyond accepting responsibility

and consequences for your own financial decisions didn’t even occur

to folks, and they certainly would never have expected to be given

the opportunity for a full-fledged financial fresh start. In fact, I still

remember the day my grandfather made the final payment on his

home loan. He and Nana invited the neighbors over for a BBQ and

literally burned their old tattered mortgage papers. America was built

by folks, like my grandparents and perhaps yours, who believed in

their own power to make their lives better.

Fast-Forward to Today

Today we talk about how complicated banking, borrowing, investing,

and finance have become. Yet the truth is that some of the same

simple values that kept our grandparents out of trouble still apply

today and probably always will. Timeless golden rules such as “Don’t

sign anything without reading it first,” “Be careful who you trust,”

and “If it sounds too good to be true it probably is” could have

saved a whole lot of folks, banks, and even entire nations a whole

lot of hassle these last few years. While we learned important lessons

by watching our own parents or grandparents literally count their

pennies, today’s kids spend money on iTunes purchases with a single

click. And millions of American children will sit at their dining room

tables tonight, listening to their parents talk about their homes and

their banks and whether they can (or want to) pay their obligations.

These are the kind of intangible impressions we are instead making

on our own “next generation.”

In fact, if you fast-forward from my grandfather’s day to today,

for some folks it feels a little bit like financial Armageddon. As an

attorney on the front line of the real estate bubble and the bailouts

and Great Recession that followed, I can tell you that all of those

detailed clauses in all of those legal documents that folks, including

you, have signed over the years—you know, the ones that used to be

explained away with the naïve assurance, “Don’t worry about that

clause; it talks about economic circumstances that will never really

happen”—have indeed happened.

Thanks to the bubble, bailouts, and Great Recession, and the

decades of lesser-known unsustainable economic trends that

preceded those historic events, folks across all demographics are

trying to regain their financial footing in an America that now

has less opportunity for upward mobility than France, Germany,

Sweden, Canada, Finland, Norway, Denmark, and a host of other

nations. Those born into America’s middle class today are statistically

more likely to move down the economic ladder than up! The lifechanging

impact on personal wealth and sociofinancial safety nets

is undeniable. And here’s the kicker: Unlike our grandparents, who

had very little or nothing to lose, many of us were born into the

middle class and now actually have a lot to lose. The fact is, our

middle-class clock is already ticking. Where home equity was once

the cornerstone of personal wealth for two-thirds of the middle class,

2007 was the first year ever that banks owned more home equity

than homeowners did. Ninety-five percent of the jobs lost have been

middle income. And more than half of today’s middle-class students

graduating with a bachelor’s degree are jobless or underemployed.

Truck drivers, retail salespeople, and fast-food workers are among the

biggest job opportunities predicted by the year 2020. Not that there’s

anything wrong with those jobs. They’re all honorable positions. But

they’re not the first jobs that come to mind when we think about the

promise of opportunity and upward mobility for a college graduate.

Everybody’s financial circumstances are unique, but the common

denominator is that no matter how fat or thin your own wallet, you

can always make your personal financial position even better (and

you certainly never want to make it worse!). As you dodge your

own financial bullets (or, if you’re fortunate enough to be financially

comfortable as you watch other folks’ retirement plans, investments,

and dreams blow up), big corporations and the very rich are paying

professionals to keep them abreast of all the new rules and reforms

coming out of Washington in the wake of the bubble, bailouts, and

Great Recession. But for mere mortals like you, being uninformed

translates to disadvantage, missed opportunity, and the enhanced

potential of moving down that socioeconomic ladder.

The Good News!

The truth is, where there’s adversity there is always opportunity. (Feel

free to visualize a Broadway production complete with raging war.

Suddenly, the metaphoric heroine begins emerging from the rubble,

angelic, with soft stage lighting, triumphant music rising in unison

from the orchestra below … now back to our own reality.) When

average Americans stopped paying their mortgages they brought

Wall Street to its knees. Talk about the power of the people! The

challenge is harnessing that same power for your own and America’s

betterment. The silver lining today, as you will very quickly see in

Chapter 1, is that the Great Recession brought those decades of

unsustainable economic trends to light. And best of all, it has given

everybody a once-in-a-lifetime opportunity for a fresh start. It is

precisely this financial mess that is driving, first, an unprecedented

second chance to correct any missteps you may have made and get

your own finances back on track and, second, opportunities to get

even further ahead, the likes of which you may never see again.

If you want to pull yourself out of the line of financial fire, take

advantage of these opportunities, and get yourself on the best financial

path moving forward—voilà, here’s Financial Fresh Start! They’re doing

it on Wall Street and in banks, financial institutions, and corporate

boardrooms. They’re doing it in Washington and governments across

the country. They’re doing it in Europe and around the world. And

in five simple steps you can do it, too!

What … Exactly … Is New?

So what exactly is new? For starters, we now have more than 2,000

pages and 400 brand-spanking-new rules and reforms being written

under the Dodd-Frank Act and, more recently, billions of dollars in

settlements, including the “robo-signer” case (in which banks and

servicers, among other things, allegedly falsified signatures, titles, and

documents). In between, we have hundreds of new laws, regulations,

pending legislation, programs, initiatives, lawsuits, investigations, and

even new authorities such as the Consumer Financial Protection

Bureau, most of which impact your money and all of which are

explicitly crafted to give government, private enterprise, and folks

like you a fresh start. Your banking and borrowing; your credit and

debt; your savings, investments, and retirement; your homeownership;

your spending and earning; even your education, training, and

employment—the new economy, rules, and reforms touch it all. To

protect yourself and prosper, no matter who you are and your exact

situation, you need to know the new rules of the game. You need not

only accurate but actionable information. But you’re already busy, so

you need it fast and easy!

Enter the Five Simple Steps!

Financial Fresh Start simplifies intimidating subjects—financial, legal,

real estate, cultural, historical, political, and economical challenges

and changes—showing you exactly how to get your “mojo” back in

five simple, strategic steps, and with a style that engages, empowers,

and inspires … and with none of the hidden “agenda” you may

find from professionals (whose real motive is to get your business),

politicians (who, of course, want your vote), or the media (who, at the

end of the day, are all about ratings). In a single holistic resource, you

get exactly what you need to know (nothing more and nothing less)

to adapt to new rules, reforms, and historical changes and prosper in

America’s new economy. You’ll learn what these new rules, reforms,

and changes mean, why they matter, what to expect, and how to keep

your head above water today and get yourself and your family ahead

during the coming years.

Your fresh start begins with a brief 50,000-foot aerial view of

the big picture, what happened in America and what it’s doing to

your money, followed by a quick summary of the new changes, rules,

and reforms and what they mean to your wallet. Then it’s off and

running, applying this knowledge to your five simple steps.

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