JUNE 2015

In This Issue

U.S. Homebuilder Confidence Vaults to Highest Level This Year,

Sales Expectations Surge

by Fox Business


U.S. homebuilders' are feeling more confident about their sales prospects than they have been since last fall, while their outlook for sales over the next six months is at the highest level in 10 years.


The National Association of Home Builders/Wells Fargo builder sentiment index released Monday climbed to 59 this month, up five points from 54 in May.


Readings above 50 indicate more builders view sales conditions as good, rather than poor. The latest reading is up 10 points from a year ago and at the highest level since September.


Measures of current sales conditions and traffic by prospective buyers also surged. Builders' outlook for sales of single-family homes over the next six months also rose sharply.



Translating the Fed into English: Why you should care 
by CNNMoney

Let's face it: America's central bank -- the Federal Reserve -- doesn't speak English.

If you haven't had the pleasure of interpreting the Fed's words, it's like being Bill Murray trying to make his way around Japan in the movie "Lost in Translation" (minus Scarlett Johansson).

The Fed's committee meets Tuesday and Wednesday, and it will be the most watched event on Wall Street. That is, unless another CEO calls it quits like Rupert Murdoch at Fox (FOXA) and Dick Costolo at Twitter (TWTR, Tech30) did last week.

It's a good time to brush up on your "Fed Speak" because this meeting could be more dramatic than previous ones. Expect stocks and bonds to react, possibly with more wild swings.

Fed Chair Janet Yellen strongly hinted in May that the Fed will raise rates "at some point this year." But the World Bank and International Monetary Fund are urging the Fed not to raise rates until 2016 because the U.S. economy isn't strong enough yet.

The Fed hasn't responded to its critics, but Yellen will face the media Wednesday, and it's likely she will be pressed to defend the Fed's stance. It doesn't get much juicier for the Fed than this.

Now, no one expects the Fed to raise rates this week. Most believe that will happen in September. But the Fed's actions affect over 100 million of American households -- anyone with a bank account or trying to get a loan -- making Fed Speak critical to understand.

Here's a few simple translations and their meaning:

Fed Speak: "Liftoff"

English: The first time the Fed will raise interest rates after being near zero for 6 years.

Why you should care (WYSC): Liftoff would be a healthy sign for the U.S. economy. It mean the Fed believes America is almost fully recovered from the Great Recession.

When interest rates finally rise, it also means the rate on your savings account at your bank should go up.

Experts believe the Fed will start raising rates in September, although the central bank has not been specific. The Fed would like to -- but is not required to -- see more wage growth for workers before liftoff.

Fed Speak: "Transitory"

English: Temporary things, like cold winter weather (even if it feels like it will never end in Boston).

WYSC: The U.S. economy contracted in the first three months this year, canceling any possible plans for the Fed to liftoff in June. The Fed believes the contraction was due to temporary factors, like the cold winter weather and West Coast port strike.

The Fed expects the economy will bounce back in the spring and summer, which would justify a rate hike. But other factors once thought to be temporary -- the strong U.S. dollar -- have persisted. Everyone from Wall Street to Washington is looking to see if America's economy picks up momentum as the weather warms up, much as it did last year.

Fed Speak: "Shallow"

English: Moving slowly. The Fed is expect to raise interest rates in small and spaced out doses after liftoff.

WYSC: New York Fed President William Dudley used "shallow" in a speech in April, and the Dow surged over 100 points that day. It's similar to another often used Fed word: normalization.

Investors are worried a rate hike will end or disrupt the stock market's 6-year bull market. So a series of "shallow" hikes would be easier for the stock market -- and everyone else -- to digest.

Wall Street has worried about liftoff for years. But many economists now say that the initial liftoff is less important than what the Fed does after that. The idea is that speed (how often) and size (how large of a rate hike) are more important than when the Fed actually gets the rate hike party started.

The Fed's pace will affect mortgage rates, credit card debt and a slew of other big-ticket items. Even in you're not investing, the Fed's pace will impact many things you buy.

Fed Speak: "The intermeeting period"

English: June 17 to July 28 AND July 29 to September 16.

WYSC: The Fed uses this term instead of normal time references like weeks, months or years.

The U.S. economy will be front and center between late June and mid-September. With a slow first quarter, the Fed wants to see a healthy pick up in consumer spending, inflation and wages, not to mention stronger GDP growth. The job market must keep its pace going too.

The Fed's next meeting is in July (July 28-29), but it's highly unlikely they would raise rates at a meeting where there is no scheduled press conference afterward that allows them to explain their thinking in detail. The next meeting with a media briefing is in September.

So after this week's meeting, every bit of economic data until September will be scrutinized extra by investors, analysts, and, you bet, Fed journalists.


6 Things Mark Cuban Says You Should Do With Your Money
by GoBankingRates.com


Mark Cuban, the billionaire investor, owner of the Dallas Mavericks and mainstay of the hit show, "Shark Tank," is known for his business savvy, work ethic, and penchant for turning fledgling startups into multi-million-dollar ventures.


Before becoming a self-made billionaire, however, Cuban studied at the University of Indiana while running side gigs like teaching dance lessons and hosting disco dance parties. After graduating, Cuban held various other jobs, including bartending, before he transitioned into sales and landed a job at a Dallas PC software company. Following his natural ambition and drive, Cuban worked hard to drum up business and earn big commissions. So when he saw a new opportunity make a huge deal, her pursued it, even after the CEO told him not to. "I thought when I showed up with a $15,000 check, he'd be cool with it," Cuban told Forbes. Instead, the CEO fired Cuban on the spot for insubordination.


This unpleasant encounter was the spark that lit Mark Cuban's desire to start his own company. Right away, Cuban scraped together a loan and founded his first major business endeavor, MicroSolutions, at just 25 years old. Cuban sold that business in 1990 for $6 million. His next venture, Broadcast.com, made him a billionaire after selling to Yahoo! in 1999 for $5.7 billion in stocks, reports CNN Money. With Mark Cuban's net worth now estimated at $3 billion by Forbes, he has remained an icon of entrepreneurship and financial success ever since.


This self-made business mogul also has quite a bit to say about fiscal responsibility and money management. Cuban is known for being outspoken and often shares his thoughts on personal finance. With a strong track record of self-driven financial success, it's certainly advice worth considering. Here is money advice from Mark Cuban that you can put into action today.


Mark Cuban's Top Money Management Tips for 2015

1. Live cheaply so you can use resources to pursue opportunities.

Before his billionaire days, Cuban spent his early adulthood living on the cheap - crashing on the couch (or floor) with five roommates in Dallas and splitting the $750 rent six ways. In his book, "How to Win at the Sport of Business," Cuban wrote:

"It doesn't matter how you live. It doesn't matter what car you drive. It doesn't matter what kind of clothes you wear. The more you stress over bills, the more difficult it is to focus on your goals. The cheaper you can live, the greater your options."

Cuban is a reminder that living within, and even below your means when possible, is less about sacrifice and more about opportunity. Find ways to cut expenses, both luxuries and the necessities, to reduce your total cost of living and free up your resources - time, energy and money - for the pursuit of greater goals.


2. Prioritize paying off debt for a guaranteed return.


In a 2014 interview with Business Insider, Cuban revealed what he wished he'd known about saving money in his 20s:

"That credit cards are the worst investment that you can make. That the money I save on interest by not having debt is better than any return I could possibly get by investing that money in the stock market. I thought I would be a stock market genius. Until I wasn't. I should have paid off my cards every 30 days."

Cuban not only emphasizes the importance of paying off of debt and using credit responsibly, he also warns against overzealous investing. Getting loan and credit card balances down to zero is a straightforward strategy for increased wealth that, as Cuban notes, requires no investment risk for a great return.

3. Use the job you have now to get the job you want in the future.

Cuban's journey - from his first job selling garbage bags, to teaching disco, to getting fired, to founding a business and becoming a billionaire - is a reminder of the power of the "hustle" and the importance of constant growth. On his blog, Cuban quoted an interview in which he said:

"I worked jobs I didn't like. I worked jobs I loved, but had no chance of being a career. I worked jobs that barely paid the rent .... I knew I would end up owning my own business someday, so I figured my challenge was to learn as much as anyone about all businesses. I believed that every job I took was really me getting paid to learn about a new industry."

Every job is an opportunity to develop a new skill set and learn about a new industry, both of which can be leveraged for future career success while getting paid in the present. Reap the benefits of diverse work experience by staying open to any and all job opportunities - engaging in your career, income and personal growth throughout.


4. Stick to what you know when investing.

Cuban is notoriously skeptical of traditional financial advice and investment vehicles. "I create offbeat advice; I don't follow it," Cuban said in an interview with Forbes. "I rarely take third-party advice on my investments."


Instead, he encourages saving and puts money into ventures he knows well - benefiting from the "information advantage." While seeking advice from financial professionals can be helpful, be sure to build an understanding of the accounts and investment vehicles holding your assets to ensure they serve your best interests.


Handing complete financial control over to anyone and agreeing to a strategy with blind trust can result in big fees at best, and huge losses at worst.

5. Cultivate wealth for yourself - and others.

It's unsurprising that as a man of means, Cuban is an advocate for cultivating wealth. But his position is not just about what wealth affords him personally, but the power it gives him to help others. In a 2011 blog post titled "The Most Patriotic Thing You Can Do," Cuban wrote:

"Being rich is a good thing. Not just in the obvious sense of benefiting you and your family, but in the broader sense. Profits are not a zero sum game. The more you make, the more of a financial impact you can have."

Building wealth enables meaningful giving as much as meaningful living. When you have wealth, you're better positioned to make an impact. Foster prosperity through the pursuit of increased income endeavors, investment growth strategies and financial education. In cultivating your own monetary success, don't forget to give back to others.

6. Use money as a tool to meet your goals.

When asked if money can buy happiness Cuban replied, "Absolutely not," reports Entrepreneur magazine. He continued:

"To me, success isn't defined by your wallet. It's defined by waking up with a smile on your face, knowing it's going to be a great day. But, sure, money can make your life a whole lot easier."

These days Cuban can basically buy whatever he wants, whenever he wants - but his happiness began long before by setting goals and accomplishing dreams, like being the first in his immediate family to graduate college. Why else would a man worth billions continue working?


Don't count on an arbitrary financial threshold to hold the key to happiness. Money should be what helps you reach the goal, not the goal itself. Instead, work toward goals and dreams with concrete actions you can implement immediately. Acknowledge and celebrate your progress toward future prosperity, and find happiness in each small step toward success.


Is It too Late to Refinance Your Home
by Dallas Morning News

Is it too late to refinance your mortgage? That depends on your motivation.


Rising rates have put a dent in mortgage applications and refinance activity. The Mortgage Bankers Association reported earlier this week that mortgage applications during the last week of May decreased 7.6 percent from a week earlier. Refinances dropped from 51 percent to 49 percent of mortgage activity-the lowest level since May 2014.


For the week ending June 2, rates for a 30-year, fixed-rate mortgage averaged 4.06 percent, up from 4.02 percent last week, according to mortgage information site HSH.com. "The 4 percent threshold is a key threshold," said Greg McBride, chief financial analyst for Bankrate.com. "That may have taken the money off the table." Plenty of homeowners already have rates in the neighborhood of 4.25 to 4.5 percent, he said, so refinancing savings aren't compelling.


In February, when rates were closer to 3.75 percent, there were roughly 7.1 million homeowners in 30-year, fixed-rate mortgages that could have benefitted from refinancing, according to an April report from Black Knight Financial Services, a mortgage analytics firm. Rates rising just half a percentage point would mean 3 million of those borrowers would no longer benefit, it estimated.



Nor are homeowners likely to see better deals if they wait. "It's too late to refinance if you want the absolute rock-bottom interest rates," said Keith Gumbinger, vice president at HSH.com.


Volatility is likely to continue in coming months, he said, as the market reacts to any indications of the Federal Reserve raising the federal funds rate (or holding off on doing so). Rates may drop again slightly, but they are more likely to firm up as a move becomes more certain.


That said, there may still be some homeowners who would benefit from refinancing-or at least, crunching the numbers. It's not always a rate-based decision. Moving into a shorter-term loan could help a homeowner pay off his mortgage faster, for example, while a new long-term loan could improve cash flow, Gumbinger said. Other consumers may find themselves better able to refinance now, where they couldn't before due to low equity or a bad credit score. "Whether or not you should refinance is a very individualized [question]," he said.


Consumers who have an adjustable-rate mortgage in particular may want to take a look at their options, said McBride. Those loans offer a fixed rate for a set period-usually five, seven or 10 years-and then adjust annually. "The situation you want to avoid is being a sitting duck for upward rate resets in future years," he said. Refinancing could make sense if you're likely to still be in the home when the next reset happens on your current mortgage, depending on the rate you're paying and the Fed's moves.


"You have to pay attention," he said. ""Evaluate the sensitivity of your household budget to that."



Invest Your Tax Return into Your Biggest Asset
by Home Advisor

Come tax season, many people choose to invest their tax returns in their

homes. What's the primary reason they remodel? According to our research,

48 percent take on remodeling projects that will make their home more

comfortable. And while this seems to represent a shift away from remodeling

to increase a home's value, it doesn't mean one should ignore a project's ROI

potential. Here are a few projects that can make your home more livable and



While not nearly as exciting as a kitchen remodel, investing in a few key

aesthetic upgrades can yield significant returns on your home improvement investments. For example, replacing your front door, siding and garage door

can yield some of the highest ROIs. And while neither project is as "fun" as a

kitchen remodel, all are smart investments that will improve the look and value

of your home. If your exterior could use an upgrade, we've got door and

siding pros who are ready to help.


Adding a wood deck is an investment that will add value to your home while

improving your outdoor living space. The key here is to not over-invest in the

project. Composite decking might be more resilient, but with a significantly

higher average cost and drastically lower ROI, it isn't nearly as smart an


Besides improving the look and comfort of your home, new windows can

have a dramatic effect on your utility bills. When it comes to replacing your

windows, you have two choices: wood or vinyl. Both are good investments,

though wood windows usually have a slightly higher ROI. Get quotes from

screened and rated window pros. 


Finally, the room every homeowner dreams of remodeling: the kitchen. You'd

be hard pressed to find a home improvement expert or realtor who doesn't

think a kitchen remodel is a worthwhile investment. And, for the most part,

they're right. The key is to invest in the right remodel. You might daydream

about upgrading your kitchen with commercial-grade appliances, exotic

hardwood flooring, and other costly splurges. However, don't make the

mistake of thinking they'll return more because they cost more. To get the

most bang for your buck go with a minor, mid-range remodel. Want to check

out kitchen remodeling costs in your area? Our True Cost Guide will tell you

what you can expect to spend.

Luxury Kitchen


Last but not least, before starting any remodeling project it's important to

keep a couple of things in mind. One, if you're planning on moving within five

years, stick to smaller remodeling projects as they typically have shorter

payback periods. Second, and perhaps more important, never spend more

than 25% of the home's value on renovations.