Mortgage Rate News

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We all know by now that even the rich and famous can end up poor and infamous. Indeed, being famous cannot completely guard someone against making poor money decisions. After all, people are people, and some never learn the importance of financial discipline. Many of the richest people fall on hard times by failing to follow the basics of personal finance:

1. Make more than you spend.
2. Avoid getting into more debt than you can handle.
3. Set aside money for a rainy day.

Unfortunately Michael Jackson fell into the category of rich people who do not manage their money very well. He lived a luxurious lifestyle — one that overran his income. It seemed as though someone so rich could never spend more than he earned, but it still happened. He also got into legal trouble, adding further to his expenses. Most people heard about Michael Jackson’s financial troubles nearly two years ago, when the first inkling that his ranch Neverland was going into foreclosure. (The ranch was saved from auction in March 2008 when a wealthy real estate mogul, Thomas Barrack, bought the ranch.) At any rate, it is clear that there are other financial issues to be worked out by Jackson’s estate.

Putting together an estate plan

This sad tale serves as a reminder that it is important to put together an estate plan. Michael Jackson, though a great entertainer and a worldwide icon, did this rather poorly. Tisa Silver, at Bizzia, points out that there are four essential points that good estate planning must cover:

1. Accumulation of wealth.
2. Preservation of that wealth and minimization of costs.
3. Use of your assets if you should become incapacitated.
4. Distribution of the assets after death.

In the end, it is important that you prepare your finances in life and in death. It makes things easier for you and your family in the long run, and protests those you care about.

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Sure, the housing market is an important part of the economy. But there are other considerations as well. Indeed, without jobs and an expanding GDP, the housing market is likely to continue to languish. Today’s data releases have caused some concern about the economy.

Unemployment

Unemployment claims continue to rise. The pace of the increase had been slowing, but this week an increase has been seen in jobless claims. However, the claims rose by 15,000, which indicates a relatively small increase, leading to the hope that the economy might still be on track for recovery. Bloomberg reports on what the labor market means for the recession:

“We’re in the prelude to the end of the recession,” said Stuart Hoffman, chief economist at PNC Financial Services Group Inc. in Pittsburgh, who accurately forecast the drop in GDP. “The stimulus will build steam, but it’ll be a pretty tepid recovery.” The loss of jobs “is one factor holding back consumer spending,” he said.

Until employment picks up, consumer spending will remain weak. Additionally, the current state of the labor market may affect housing. Housing can’t pick up without the employed. Additionally, if job losses continue to mount, there is likely to be an increase in foreclosures down the road.

GDP

Another important economic release for today was GDP data. Quarter 1 data showed that GDP contracted by 5.5%. This is somewhat discouraging, but the news comes with a silver lining. GDP had actually been expected to shrink by 5.7%. This means that GDP was in better shape than expected. The news, when combined with the information from the relatively flat labor market, indicates that a slow recovery might begin soon. However, the economic data makes it clear that the end of the recession, and the subsequent reversal of the current situation will comes quite slowly.

The economic news has not been enough to cause problems for the stock market, however. Other considerations are driving U.S. stocks higher right now, and that is something that might add a little confidence to the financial markets in general.

Even with the global economy slowing, there are still places that have high home prices. And, while we think of places like Los Angeles, Washington, D.C. and Seattle as expensive places to buy a home, they are not even the most expensive in the world. In fact, only New York City made the list of top ten most expensive places to buy a home. When you look at the U.S. on a global scale, it doesn’t seem so bad. Karim74 offers the top 10 most expensive cities to buy a home:

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1. Monte Carlo
2. Moscow
3. London
4. Tokyo
5. Hong Kong
6. New York
7. Paris
8. Singapore
9. Rome
10. Mumbai

I found it fascinating that four of these cities are in Asia. With Asia housing the fastest growing economies in the world, I suppose this shouldn’t be surprising. And, of course, Europe has four of these cities as well, a holdover from when Europe was the economic power. Besides, a lot of people still equate living in Europe with glamour and high living. I was surprised that more U.S. cities didn’t make the list. And one often forgets about Monte Carlo.

If you are preparing to move overseas, it can be helpful to get an idea of how much housing costs. You should also re-consider before you buy a home. Some countries have strict laws about who can own property, and the kind of hoops you have to jump through if you are not a citizen of that country and want to buy a home. Figuring out the cost of living in general is a smart thing before you go. In some cases, you may find that housing and other expenses may be beyond your new income. Check the exchange rate as well, just to see what sort of raise or pay cut you are getting in real terms.

Buying a home is an expensive proposition no matter where you are. However, if you are careful, and you do your homework, it is usually possible to find a good deal — no matter where you end up.