It is estimated by the Human Resources Administration that by 2010, 1/2 of the workforce will be caring for dependent elders in addition to their own, immediate families!
Is that you? How are you going to take on these additional responsibilities when you can barely hold your own now, financially?
Where will all the money come from to pay:
o 2 mortgages?
o Huge medical bills?
o Expensive prescription drugs for conditions that will not go away?
o Alterations to your house or theirs?
o Household help so you can continue to work?
o Extra food?
Will you have to choose between funding college for your kids, your own retirement or support for your parents and/or in-laws? Will you have no choice but to deny your own parents help and care?
Not happy thoughts, I agree, but for many people, those will be the realities…
Unless you get ahead of the curve and start making preparations now on how to keep this all too likely situation from becoming a nightmare, you may be sorry.
While there are too many possible solutions to these problems to cover in this article, we will take a look at a couple of the most effective ones; starting a home based business and eliminating all debts, including mortgages in 5-10 years, even if your 30 year mortgage is brand new!
Understand that you will need more money, a lot more money to survive, let alone prosper under these dire circumstances.
You and your parents/in-laws should also get rid of as much debt as you possibly can between now and then, especially credit card debt and mortgages.
As for the first point, more income, your first thought is probably to get another job. However, in many cases, the income from a 2nd job is usually so chewed up by taxes and expenses such as transportation and food that are directly attributable to the 2nd job, that you are netting peanuts.
A little used but perfectly legal and effective option is to start a home based business, writing off losses from the early years against your salary on your current job or self employment. This strategy can unleash hundreds of extra dollars in cash every month.
As your business grows, its income will supplement your job income and in time could actually replace it. You will probably need every additional penny to meet your additional responsibilities.
As far as rapidly getting rid of debt, there are many strategies. They vary from the simple; pay a fixed amount on your credit card bills each month, even if it is this month’s Minimum Payment!
That strategy alone will mean your current balances will be paid off 15 to 20 times faster than following the bank’s recommended minimum payment each month.
There are other, more aggressive strategies that can pay off all your cards, bank and personal loans in 1-2 years, but again, they are beyond the scope of this article.
When you think of paying off your 30 year mortgage in half the time, you are probably thinking of those Bi-Weekly mortgage programs or the newer, Money Merge plans.
Both work, but have serious draw backs. There are few banks that will allow the bi-weekly payments because their computers are not programmed to handle them or the current mortgage holder will not allow them.
The new, Money-Merge programs out of Australia, are hampered by reliance on the home owner having equity in the home and the availability of HELOCS, Home Equity Lines Of Credit, both of which are becoming scarcer as you read this. Plus, I have an aversion to paying off debt with more debt.
There is a new kid on the block, the “Amortization Accelerator,” (Amac) which we developed. It turns the typical bank amortization schedule on its head and allows the mortgage to be paid off in half the scheduled time.
Check with your CPA or accountant for more information, as we are introducing this new system rapidly across the country.
Obviously, we have only scratched the surface of this huge, emotional and financial problem. However, the earlier you begin to prepare, the better you will be able to deal with it in your life.