February 2008 Interview

Do You Know What You Are Missing? You probably don’t want to think about it, but it is an important part of planning for you and your family…life insurance. Who really needs it and when?  Listen to this interview with Ben Wujek and learn how life insurance is more than just a “death benefit.”

February 2008 Interview

January 2008 Interview

Ready to get in shape?  Then listen to this interview with certified personal trainer Scott Elliott.

Scott Elliott holds personal training certifications from the National Academy of Sports Medicine and the International Fitness Association.  He has been a personal trainer for five years and has experience in both the private and corporate environments.

Click here to listen to the January Interview.

December 2007 Interview

Holiday Stress?  Listen to an interview with Susan Sincoff, LCSW for suggestions on coping with your holiday stress.Susan is a Licensed Clinical Social Worker with a private practice in the Carmel Valley community of San Diego, California. She holds a Master’s in Clinical Social Work from Adelphi University in New York and is a member of the Society of Clinical Work, the National Association of Clinical Social Workers, the American Board of Examiners in Clinical Social Work, and the National Association of Geriatric Care Managers. She also holds a credential in school counseling. Susan enjoys working with couples, adolescents, and individuals dealing with anxiety, stress management, caretaking elderly parents, relationship issues, and work/life balance. She is even more enthusiastic about her work than she was when she started over 30 years ago! Click here to listen to the December Interview.

October/November 2007 Interview

Being involved with sports therapy since age 17 working in physical therapy clinics and Chiropractic offices as well as providing personal training, Dr. Lichtman offers over 12 years of experience and education to his practice. Through education and clinical experience, Dr. Lichtman has abilities to provide Chiropractic services to anyone whom accepts it. Dr. Corey Lichtman has his Bachelor of Science degree in Kinesiology specializing in Pre-Physical Therapy from San Diego State University before continuing on to his doctorate in Los Angeles, CA . Dr. Lichtman has done extensive personal training and is CSCS (Certified Strength and Conditioning Specialist) certified, which is the top national strength and conditioning certification through the NSCA. He has worked with professional athletes from the MLB, MLS, and NBA. For more information, visit Dr. Lichtman’s website.

October Interview click to listen

August/September 2007 Monthly Interview

Our interview for August/September is with Sarito Sun. With more than 20 years as a Meditation Expert and Hypnotherapist, Sarito Sun is dedicated to helping people individually and in groups. Sarito believes that laughter, joy, and meditation are three of the most powerful ways to shower the world with peace, health, and prosperity. She started leading the laughing meditation in the 1970’s.

Sarito Sun has worked with people from all walks of life, including renowned authors and spiritual leaders. In her own personal search, she has explored modern methods as well as powerful ancient techniques for awareness and meditation. Sarito has provided group sessions for businesses and organizations, including the Chopra Center in La Costa. She also teaches at Churches in the San Diego-LA area. In the past, Sarito has led groups in Europe. Sarito works with individual clients on a limited basis.  For more information visit http://www.saritosun.com/index.htm.

August/September 2007 Monthly Interview click to listen

June/July 2007 Monthly Interview

Our interview for June/July is with Cathryn Golden. Cathryn is a nationally known Feng Shui expert and the owner of balanced Environments. She is a graduate of The Western School of Feng Shui, and has studied with numerous internationally-known experts in this and related fields, such as Professional Organizing and Dowsing.  Cathryn is a member of the International Feng Shui Guild, American Society of Dowsers, and the National Association of Professional
Organizers (San Diego Membership Committee), as well as other professional organizations. Because of the Long-Distance Feng Shui™ system she developed, Cathryn has loyal clients throughout the country and in Italy. She has been featured on TV, in print and broadcast media, and is a contributing author to the second edition of Wake up…Live the Life you Love. As a sought-after Guest Speaker and Workshop Facilitator, Cathryn enjoys sharing her message about “Simple changes—incredible results!”™ For more information visit http://www.balanced-environments.com/.

June/July 2007 Monthly Interview click to listen.

May 2007 Monthly Interview

This month we are pleased to talk with Michael Cordova, Vice-President of Milestone Mortgage, Team Cordova.   Michael has closed over a half billion dollars in loan production over 23 years in his practice.  He is a licensed Registered Mortgage Advisor, California Mortgage Planning Specialist, and a member of the By Referral Only College of Business Philosophy.   He has been a licensed California Mortgage Loan consultant since 1978.  Michael is licensed to practice Missed Fortune Equity Management and Wealth Creation Strategies having graduated from Missed Fortune Academy of Asset and Debt Management.   He earned a B.S. in Financial Investments from California State University , Long Beach and minored in Real Estate Investment in 1978.For more information, visit www.milestonemtg.com/teamcordova.

There seems to be a lot of concern right now about interest rates.   How does mortgage interest work for us instead of against us?

That’s a great question.   I tell my clients that there are basically two types of interest, there’s good interest and bad interest.  Or I’ll say preferred interest and non-preferred interest.    Basically what that means is that preferred interest is tax deductible and mortgage interest falls into the category of preferred interest and is a write off.  An example of non-preferred interest or something that is not a write-off would be auto or credit card interest.  

So for a quick example, let’s say you have a married couple who combined earn $70,000 a year and they have $10,000 in mortgage interest.   Their taxable income decreases from $70,000 down to $60,000 because of the $10,000 interest write off.  And in a 33% combined state and federal tax bracket, this couple would save $3,300 in income tax on Schedule A of their 1040 tax return.   Therefore, interest that is preferred or good interest can be a good thing because it is a write off.

I have been hearing something about the IRS checkbox on the 1098 form, acquisition indebtedness…what’s that all about?

The 1098 interest form outlines how much mortgage interest you have paid during the year.   There’s going to be a box that the existing investor is now going to check if and when there is a cash out refinance and the reason for that is the IRS is now going to be monitoring how much interest people are going to deduct on their 1040 tax return and make sure it is within the guidelines of the IRS.  

Let me just say just this about the definition of acquisition indebtedness, home owners can deduct mortgage interest on Schedule A of an itemized tax return up to $100,000 over and above the acquisition indebtedness of a qualifying residence.   Qualifying residence is the primary or secondary home.  This is true unless the loan proceeds are used to increase the acquisition indebtedness by doing home improvements on the qualified residence up to a maximum loan limitation of $1,000,000.  Also, most people don’t understand that their acquisition indebtedness decreases with each principal payment that is made.

Let me just give you an example.   If you have an original purchase price of $800,000 with $400,000 down, you would have an initial loan amount or acquisition indebtedness of $400,000.  Therefore the client would be writing off interest on $400,000.   Let’s fast forward a little bit to four years later.  You get a loan or the house goes up in appreciation to $1,000,000.   The loan balance is paid down to $350,000 and because they have equity in their property, the clients want to take out $250,000 cash up front to pay off non-preferred debt such as credit cards or car payments.   So in this example, they would take out a loan of $600,000.  The question I would ask the clients is do they know how much of that they are going to be able to write off?   The answer is the acquisition indebtedness has decreased to $350,000 from the original loan balance of $400,000.  However, with $100,000 over and above the acquisition indebtedness exemption, the client can write off interest on the loan amount only up to $450,000.  Therefore, Christine, you can see how interest only loans and equity management strategies can be a great advantage in keeping your acquisition indebtedness at the highest level for a great tax advantage hedge and still accelerating the payoff of your mortgage.  

People need to be aware that the IRS is going to be looking at this much more stringently.   I don’t think the IRS has paid as much attention to this in the past as they are going to in the future.  Income in real estate investments produces dollars in tax revenue and I think this will become an issue starting next year.

Let’s talk about equity and what constitutes a prudent investment.   Reading from Douglas Andrew’s book Missed Fortune 101, he says that when considering a particular investment (including real estate), we should look at three things: liquidity, safety, and rate of return.   How does equity fare against these three?

For people out there who have not read Douglas Andrew’s book Missed Fortune 101, I highly recommend it.  When I read it for the first time, I absolutely had a huge paradigm shift when it came to issues of equity and equity management, liquidity, rate of return, and how I view my mortgage.   I come from a very conservative background where mortgages are looked at almost as a necessary evil or as something that you want to get rid of as fast as possible.   I think that came from generations of thinking back to the great depression and this book helped change that mentality of how important equity is if it’s used correctly and planned correctly.   Also by reading the book, I had a change in my philosophy in regards to money.   

If we look back 40 years ago, things were very different.   Back then someone may have gone to college and then entered the job market let’s say to General Motors.  At this point they would work very hard, get job promotions, earn a good salary and a good pension. They would earn a nice retirement nest egg and go into retirement with liquidity.   Fast forward 40 years.  People are not staying on the job for 30 years and retiring.  They are changing jobs five or six times during a lifetime.   They are looking for more choice and control over their money and this is where equity comes in and the equity management philosophy. 

Equity is the difference between what a ready, willing, and able buyer will pay for a property and what is owed.  Americans typically believe that home equity is a good investment.  67% of Americans have their net worth in their home equity rather than another investment.  If you ask 100 financial planners if having 67% of your portfolio
in one investment or one asset would be prudent, they would say it is not prudent.

Regarding liquidity…how easy is it to get to your equity?   It’s not easy at all.  I would say the number one reason for foreclosures is because of lack of liquidity not because of bad loans. It’s because of an inability to get to your money.  

Let’s say you have a perfect payment history on a loan and then suddenly something occurred where you lose your job.   And you’ve had perfect payment history for 24 or 36 months.  You may have even been paying more on the principal.   Then you go into the bank because you lost your job and you ask for a little bit of payment relief.  What do you think the answer is going to be?   Also if something comes up where you have a disability and perhaps you don’t have disability insurance or you might be going through some difficult financial times…what you rather have?   $25,000 of equity trapped in your property or $25,000 in a safe liquid side fund earning a rate of return?  So if you ask anybody who has lost their house in a foreclosure, they would probably tell you that they would have been far better off having their equity separated from their bricks and mortar, including Douglas Andrew who lost his home to foreclosure.   In his book he tells about the $150,000 liquidity lesson that he had to go through.

How safe is your equity?   Let’s talk about safety when it comes to the southern California area.  Over a decade ago, real estate prices took a 20% to 30% dive and people found out the hard way that real estate equity is no safer than any other investment. This is controlled by what I would consider external factors in our market place.   People have no control over the job market, companies leaving town, and so on.

Another example with safety… Houston, Texas was hit pretty hard by oil prices.   They were at an all time low in the 1980’s.  I would say thousands of workers were laid off and had to sell their houses.   But there was such a glut of houses at that particular time, there were far too many sellers and certainly not enough buyers.  16,000 lost their homes to foreclosures.   Did these 16,000 people suddenly become bad people?  The bottom line is they couldn’t afford their mortgage.  I bet if you ask them today if they had had a crystal ball to see into the future, would they rather have had their equity trapped in their property or separated where they could get to it?  

Rate of return. How much does your equity earn as far as rate of return?   There is a misconception in that people believe there is a rate of return on their equity.  However, there is zero rate of return on equity.   There is a difference between rate of return and appreciation.  Appreciation values go up or down depending on the market place and external factors.   Home values fluctuate due to market conditions not due to mortgage balances.  Equity in a home has no relation to home value and is in no way responsible for appreciation or depreciation.  

So rate of return is completely separate from appreciation or depreciation?

Yes, and it’s important for people to know that.   Now where rate of return comes in is when a client comes to me and wants to strip some of their equity out of their property and put it to work so it can earn a rate of return. I show my clients how to take advantage of other home equity strategies by employing their home equity and earning a rate of return greater than the cost of the mortgage interest.

Is it possible for people to separate and manage their equity to better increase liquidity, safety, and rate of return so they can conserve their equity and not consume it?

Absolutely, that’s what we are doing here at Team Cordova, Milestone Mortgage.   What we teach is the Bank of You paradigm.  We are teaching our clients to be the bank or to do what banks do rather than what banks want you to do.   Banks take our money and give us a rate of return of 1% to 2% typically and then they take our money and turn around and reinvest it back to us in the form of credit cards, car loans, and mortgages and earn interest at the rate of 6% to 22% in some cases and that spread or arbitrage is the profit the banks earns for employing our money.  Team Cordova teaches our clients to do the same thing.   We are teaching our clients that regardless of what interest rates are, they can take their money and invest it in a very safe, very secure investment that can earn a rate of return equal to or greater than the cost of employing that money or equity.

For example, if they are borrowing money at 6%, we guide them to investments with a rate of return typically between 6% to 8.5%.   Looking at that scenario, if someone is earning a rate of return of 8.5% in a safe and liquid investment and they are borrowing at 6% and Uncle Sam is paying about one-third as a tax write off of mortgage interest, they are earning a spread arbitrage of between 4% and 8.5%.  That’s a tremendous rate of return, and it’s secure and safe and that’s what we are teaching. 

So learning to control and manage equity successfully is the key to enhancing your financial net worth?

Absolutely.  And it is important to keep in mind that none of this works if people are not concerned with conserving their equity rather than consuming it.  I just want to point out the importance of accountability on both sides.   We are connecting our clients with great financial planners and people who are very much experts at teaching our clients where to put their assets so they can earn this type of rate of return.   We are also doing follow up at six months and twelve months so we stay in close contact and make sure there is accountability on both sides.  If someone came to me and wanted to take their equity to buy a boat or jet ski, none of this would work. 

What is the first step someone should take in order to manage their mortgage to create wealth?

I‘m a big believer in getting educated.   Get educated on home equity and mortgage planning.  There are some great books out there. We have mentioned Douglas Andrew’s Missed Fortune 101 .  Doug is coming out with a new book, Last Chance Millionaire. There is wonderful book called Ordinary People, Extraordinary Wealth by Rick Edelman.  Also, I have great article if anyone would like a copy.  It is written by Steven Marshall on “How the Affluent Manage Home Equity.”   It is about equity management and wealth creation strategies.

If anyone would like to delve deeper into how this all would affect their own personal situation, they can contact me and I would be more than happy to help them analyze their mortgage situation.   If they stripped $100,000 of equity out of their property, we can turn that into $1,000,000 in a thirty year period.  If we can do that with $100,000, imagine what we can do with other idle dollars sitting in their house through appreciation of their property.   We can take it and invest it and concentrate on liquidity and safety.  I tell my clients, just dream with me.   Imagine what we can do if you have more than $100,000 in equity!

Every time we take equity out of a property, we are getting closer and closer to what we call Freedom Point.   Freedom Point is where there is enough asset on the outside of the property to pay for the debt on the inside of the property.  It is a transforming time to help a client get to Freedom Point.   I’m very blessed to be able to that.

So the goal is Freedom Point, not paying off the mortgage?

That’s right.  Freedom Point allows you to have the choice and control that if you ever wanted to draft a check to pay off your mortgage, you could.  However, when people get to this point, we never advise them to write that check because, again, Uncle Sam is our greatest partner in interest write off.   Further and further beyond Freedom Point is where there is the opportunity for true creation of wealth.

What do you as a mortgage consultant offer to the person reading this interview?

I teach my clients how to merge the assets and debts on their balance sheet and how simple planning can ensure their retirement, their child’s education, they have funds set aside in case of emergencies or financial hardship.  

Thank you.  

Michael Cordova can be reached at michaelc@milestonemtg.com or 310-732-0011.

April 2007 Monthly Interview

This month, we are pleased to have talked with Diane Harmony who is the founder and CEO of Universal Harmony Inc., an organization dedicated to igniting the awareness within each of us that we are the Abundant Love of God.  An ordained trans-denominational minister, inspiring speaker, and compassionate teacher and spiritual counselor, Diane created the 5 GIFTS for an Abundant Life!Ô Course from which her book 5 Gifts for an Abundant Life was born.  Diane’s vision is that our global population lives in Universal Harmony.  For more information, visit www.5gifts.com. 

Abundance seems to be a popular topic of conversation these days.  What does it mean to be abundant?

 I think there are lots of different terminologies to discuss and talk about abundance, but I think the one word that sums it up the best and is one we find over and over again when we ask our students “what is your idea of an abundant life?” is the word “freedom.”  And that word is a way to understand abundance from the perspective not just about money but also about a way of living, whereby we are not limited by anything.  We have the freedom to be, to do, to have whatever it is that we want, with the only caveat being as long as it does not hurt anyone else; that is how generous this universe is.   So being abundant in every area of your life, being free to have great relationships that are fulfilling, being free to have a job or a career that allows for the greatest expression of who we are to come forth, to be in service, being free to have all of the money and the time necessary and the resources to do the calling of our hearts, and being free to be healthy and feel the wholeness that we are–that is our natural state of being.  To me abundance means freedom, freedom in all of those areas. 

What would you say is the role of gratitude in abundance? 

I believe that gratitude is the great shifter.  Gratitude allows us to move into focusing on what it is that we want more of in our lives.  When we put energy or a vibration of appreciation on something, it activates the law that says what we put our attention on increases.  It is the law of increase, and so gratitude is one of those amazing spiritual practices that allows us to focus on what it is we want and take our attention off of what it is we think we are missing.   If we are looking at our bank account, for example, and the balance is less than we desire, rather than being in fear about that balance and allowing it to permeate our opinion of who we are and how much we are worth, so to speak, if we use gratitude to be grateful for what we have in that account, then that sets up a way for the universe to multiply that which we are grateful for.  That is just one of the many applications for gratitude and how powerful it is as a way to be fully engaged in an abundant life. 

So do I have to give in order to receive? 

Yes.  Part of the job of this ministry is to requalify/reframe/reposition what we have been taught for so long in our lives, and that is from the time that we lose our little childhood innocence, we are being fed this belief that we are not enough and that there is something missing from us.  Therefore, we have to go get it–we have to get more education, we have to get a better job, we have to get the perfect mate, all of those things we think are there to complete us or that we have been told will make us happy and will complete us if we just get them.   The idea in truly living a spiritual life is to understand that it is about giving, that we already are whole, perfect, and complete, we already are the abundance of the universe.  It is already within us, and so our job becomes how do we find a way for that abundance to be released through us, rather than trying to bring stuff to us.  To receive before we can give is so much about giving in order to receive because as we open up and give, then we activate the law of circulation, and as we give so do we receive.  It is a much easier, more powerful way to work with the laws of the universe.

Does visualization really work?  If I visualize is that trying to make it happen? 

Visualization is a wonderful mental tool that any of us can use to bring the feeling tone of what it is we are wanting to manifest into our lives.  We have this great tool called our imagination that helps to really feel what it is like to already have manifested something in our lives.  So visualization is a wonderful mental tool for that.  To me what is more important is to embody the intention within our own consciousness.  In other words, when we are inspired to do something, we can activate our imagination and allow that idea to take seed within us and literally become it, become the spiritual mental equivalent of whatever it is we are wanting to manifest, so that it is a magnetic force that brings that intention or that idea into form through our embodying of it.   For example, when I wrote my book, the idea was I could use visualization and I did to see the book on bookshelves, to see myself on Oprah, all of those things that I wanted to have happen after the book was written.  However, the real process for me was to embody the truth that I am an author and to work with allowing for the words to come through me, which has nothing to do with visualization but has everything to do with availability.  How available am I to allowing these intentions, these desires to come through?  Visualization is a great add-on, but it is not in my mind one of the power tools we are talking about here. 

So visualization doesn’t necessarily imply availability? 

Not necessarily because what we can do is visualize something and then we can turn around in the next breath and say, “oh, but I couldn’t possibly do that.”  We can talk ourselves out of it.  So visualization can act as a trigger to help us to see where we are in doubt or fear or worry, but visualization is still a mental exercise in trying to talk the mind into something, rather than intention setting where we teach in the book and the course that it is about taking the idea and becoming it.  It is a different thing.  One happens in the mind and the other happens in the mind of the heart. 

What does forgiveness have to do with abundance? 

Forgiveness is just another one of those words for freedom.  Forgiveness frees the forgiver from the past.  In order for us to be fully present, to be and live abundantly, we have got to be in the now.  Unforgiveness keeps us in prison, if you will, with those people or circumstances or organizations or whatever that we have not forgiven.  By virtue of unforgiveness, we are attached and therefore not available to live in the present moment.   Forgiveness is a way for us to unhook ourselves from anything but the realization that everything is working perfectly and everybody is doing the best they can.  Forgiveness is one of those wonderful spiritual practices that allows us to transcend behavior of a person or an organization and for us to be able to connect soul-to-soul and heart-to-heart with the goodness within that person, not their behavior.  It does not mean, however, that we condone the behavior by any means. 

Near the end of your book, you mention prayer and meditation.  Do I have to pray and meditate to be abundant? 

No, I don’t think you do, but I think that in terms of us making things as easy as possible for ourselves to live in a culture that does not necessarily believe that things work the way they truly do, it really helps to have some spiritual practices.  When we talk about prayer with regards to approaching abundance from a spiritual perspective, we are not talking about prayer that means begging, bargaining with, or beseeching a God outside of ourselves for something.  Remember we are living under the absolute truth that we already are everything because we are re-presenting Spirit or God on Earth.   So prayer then becomes what we call affirmative prayer, where we unify ourselves with a God presence, knowing it is already within us, knowing it is all that there is, and then we make a declaration of a truth that may not be in form yet, but this kind of prayer helps us to live as though it is.  Our declarations of our intentions are always in the present tense.  So I would say, “I am married to the perfect mate here and now.”  And whether that is true in the realm of effects or experiences yet is not the point.  The point is that I am embodying the truth that I am in a holy and divine relationship.  Then I can say thank you and be grateful for this or something better for the highest good of all.  Then I surrender the prayer and let it go, turn it over, allow the universe, allow God its full sway, its full activity in my life without concern for it.   In terms of meditation, what is so important is to learn that there is a possibility of quieting one’s mind.  I think most people walk around believing that they are their thoughts and that their thoughts run them and that there is no way to detach from them or even find a space between them.  What meditation does as a daily practice is allows us to detach ourselves from our thoughts and understand that there is a thinker thinking those thoughts who has a choice as to what thoughts we want to empower and what we want to simply float by us.  So meditation is a preparation for dealing with life from a place of observer and detachment.  Allowing us to make conscious choices rather than feeling victimized by our own minds essentially.   

How does one meditate? 

That is one of the things the Western mind has a very difficult time with because we think there is supposed to be some magical formula and that we have to look good—we have got to sit in the right place, we have to be able to do a full lotus cross-legged position, and we have to have our fingers a certain way and all of that.  So our mind immediately argues itself out of meditation many times.  I believe that in meditation what is important is to have a posture that allows you to have a straight back, so that your breath can be very unobstructed and very smooth and easy.  Whether that is lying down, whether that is walking, whether that is sitting up, does not matter.  As long as the back is straight and the body is receptive to being at peace, from that point there are a million different kinds of meditation.   There are people who meditate on a phrase from the Bible or a mantra; there are people who have their eyes open or they have their eyes closed.  The distinction with having your eyes open is to have what Eastern traditions call the soft eye where you are unfocused.  Your eyes may be open, but they are not necessarily focused on anything, they are just simply soft.  That is the only word I can use to describe it.   The rest of it is simply becoming the observer and really watching what is going on without judgment.  This is another thing that is one of the benefits of meditation, it helps us to disassociate ourselves from what is happening in our minds enough not to judge it.  Therefore we don’t have an emotional attachment to something, to any of the thoughts that are going through our minds.  Meditation can be walking, it can be repeating a mantra out loud, those are other forms of meditation.  I find that it depends upon where one is in their life as to which form or formula of meditation might work for them.  And it is wonderful to try different kinds so the mind does not feel like it is being lassoed somehow and hogtied.  

If I want to live an abundant life, what is the first thing I should do? 

Know that you are abundant already and that you live in a finished kingdom, that everything you could possibly want, need, or desire is already here.  It is already ready for you!  It is up to you to claim it, up to you to first of all know that it is true in the midst of what appears to be lack and limitation.  Being able to watch your thoughts and to remember and remind yourself that what is true here is that we are divine by nature, which means that we are infinite, opulent, and absolutely without limits, and therefore, even in the face of appearances that may look other than pure opulence, it is our job, it is our practice on a minute-by-minute basis to remember who we are.  To me, the first step is to understand that we already are it, that we are not missing anything, that we are not needing anything, that we are here to express what is already in us. 

What’s your greatest hope for your work? 

That this planet of people remembers exactly what I said.  That we remember who we are.  That we live from a place of abundance and not a place of victim or lack.  That is the greatest hope for this work, that we teach each other what we already know to be true when it appears that we have forgotten and that we are the inheritors of the Kingdom, and that it is truly God’s good pleasure to give it to us if we would just open up to it and receive it. 

Thank you.