Who’s going to save us from our failing economy? Do you really think that Congress can save both big business and you at the same time? It is obvious to everyone that the economy is in big time trouble. But what everyone doesn’t understand is how to put it back together. There is much debate about fixing the economy, bank bailouts (thanks Paulson), auto manufacturer bailouts (thanks Bush), freezing foreclosures (thanks Fannie), expansion of government programs that take jobs from the private sector(thanks Obama), the list goes on. One of the interesting things about this very long list is that it mostly seems to be about what the government can do to fix the economy, instead of what the individual can do. The government has a habit of trying to tell business what to do, then trying to prop business up to keep it from failing. This has created problems that won’t be fixed by more of the same. If you really want to talk about “Change” then you need to talk about what individuals can do to put the US economy back on track instead of what the government is going to attempt to do.

To truly understand how to fix today’s economy, we have to look at what is really wrong. The fact of the matter is that all the banks have an enormous amount of defaulting loans. According to the Mortgage Bankers Association, the delinquency rate is the highest in the history of their National Delinquency Survey. This is causing a downward spiral. Banks have loaned money, and that money isn’t being paid back, so the loans are defaulting. Defaulting causes the banks to have less ability to loan additional money. Not loaning money causes businesses to shut down, and prevents new businesses from being built. Less business causes unemployment and low wages. Unemployment and low wages causes people to not pay their loans. Not paying their loans causes more defaulting, and we are spiraling downward. The really good news is that no one in the government seems to be aware of this circle of economic death, so they will just screw the entire thing up in their efforts to, um, do whatever it is they just got a four thousand dollar a year raise to do.

So the question of how to fix the US economy must be answered by finding a way to cut off the cycle. Or at a minimum, we must reduce the effects. We are going to discuss a 3 prong approach to helping motivated citizens save their homes, get out of debt, create additional income, and help drive the US economy back into positive territory. This includes 1) reducing the amount of the monthly mortgage payment, 2) reducing the amount of overall debt, and the 3) creation of income by building a business that requires very little capital. Since the banks can’t lend you money for your business, you need a business that doesn’t require a loan.

Let’s start with lowering your monthly mortgage payment, or as I like to call it, Keep the Roof Over Your Kid’s Heads. Children apparently enjoy living under a roof being held up by walls. Now I don’t have any statistics that have shown that keeping a roof over the heads of your children makes them love you more, but this may still be important to many of you. This is done with what is known as a Loan Modification. You are in effect refinancing your mortgage. If you are behind in your mortgage payments, for a fee ranging between 1 and 3 percent of the loan amount, you can get a professional to work with your lender on your behalf to modify your loan to cut the monthly payment. It may seem like a bad idea to pay a fee for this service, but think again. Loan Modifications can be a bewildering maze unless you have experienced professionals to guide you. Banks are desperate to modify your loan because they DO NOT want to foreclose on your house. However, they also do not want to waste time modifying your loan if you still won’t be able to pay your new mortgage payment. And they really aren’t fond of spending time dealing with homeowners one-on-one who are unorganized and don’t have all the required information ready. This is why homeowners that try to work directly with their lender have a failure rate of over 80%. The key to success is constructing a financial plan that you and your lender can approve and, most importantly, that you are able to perform. Experience and relationships with lenders enables many professionals to provide effective representation and negotiation on your behalf. What I’m trying to say here is GET A PROFESSIONAL!!! And if you are looking at the end of this paragraph thinking to yourself that you can’t possibly pay a fee for this service if you can’t even pay your mortgage, please remember that if you are in foreclosure, the bank is not accepting the payment any longer because you are so far behind. So it is possible to have money in savings even though you are in foreclosure.

So let’s take a look at what this can do for you. A professional I spoke with said that he is running into instances of people who have fixed mortgage rates as high as 11%. A loan amount of $200k for 30 years at 11% is a monthly payment of over $1900. Negotiating to get that rate down to 8% reduces the payment to less than $1500. That is over $400 a month! Is $400 a month the difference between making the payment and not making the payment? For many people the answer is yes. The following is a table that demonstrates the difference in monthly payments for a 30 year mortgage at different fixed rates.

This is what a Mortgage Modification professional can do for you. It may keep the roof over the head of every one of your family members. It can also help the economy in two ways. First, it stems the tide of foreclosures, and turns bad loans into good loans. Second, it is creating strength in the very important mortgage industry. These are two key components to reviving the US economy.

Now let’s discuss the second prong, reducing the amount of overall debt per household. A mortgage is sometimes known as a secured debt. The loan you were given is used to purchase something of value that the bank can take away if you don’t pay them. This is proving to be a little untrue since these houses are losing value, but it is still considered a secured debt. There is also unsecured debt. Much of this is in the form of those little plastic cards sitting in your wallet or purse.

If you have less than $20,000 in credit card debt, there are organizations that will assist you in negotiations with creditors to reduce or eliminate finance charges while you pay down the debt. They can in fact help you put together a plan to repay your credit card debt in 36-60 months.

If you have more than $20,000 in credit card debt, you may want to look at an alternative route. It is possible through little known rules and regulations, to eliminate all of your credit card debt WITHOUT repayment. By using a nationwide network of attorneys who specialize in credit and collections law, your credit card debt can be reduced to zero by actually going after the debt collectors who are calling you every day and harassing you. Many of the tactics used by debt collectors is actually illegal, and their use of these tactics can be used against them. With the exception of the government, no other entity which enters anything on your credit reports does it in the legally prescribed manner. Therefore, they are not in compliance and can be challenged. It is also possible to challenge the validity of unsecured debt at a financial institution. In order to do this, one must have an absolute understanding of how these laws work. This is why you need the help of professionals in the field.

Finally, we are going to discuss business. With banks in a world of pain, they are not lending funds to keep businesses up and running. This is part of the reason people are being laid off their jobs right now. If banks aren’t able to loan money needed by companies to pay their bills, they can’t afford to keep people on the books. They may not be able to keep you on the books. Maybe you have your own business, but because of this same issue, you can’t borrow money to keep that business running through these tought times. So the question is, can you run a business that requires very little capital to start, no overhead for employees or materials, and only minimal capital for marketing? The answer is a very loud YES!!! Another question, can that business you build actually continue past your working years to support you during retirement? Again, the answer is a very loud YES!!! Let’s be perfectly honest. Corporate fraud is not only a large part of the strain on this economy, but it is killing the life savings of millions. You need multiple streams of income when you retire, and you can’t always count on your broker to make the right decisions. So you need a business that will continue to feed you income long after you are done working.

Investment guru and author Robert Kiyosaki sums it up this way: “It’s time for people to begin minding their own business. A job means you’re being paid to mind somebody else’s business. In this new economy, you’re paid to mind your own business. The idea that you can go to school, get good grades, find a safe, secure job, and have the company and the government take care of you is fundamentally of the Industrial Age. It was a good program – as long as you were born prior to 1930.” Kiyosaki didn’t become wealthy by giving bad advice my friends. You must have your own business if you want to make it in today’s economy. And more importantly, you must have your own business if you want to make it in tomorrow’s economy.

So how do you build your own business in a world that isn’t loaning start up money? Look at what Charles W. King & James W. Robinson have to say in their book “The New Professional.” Every year, thousands of men and women leave established, lucrative careers to pursue new opportunities in the booming network marketing industry – an industry that is now attracting former lawyers, doctors, CEOs, university professors, stock brokers, company managers, professional athletes, real estate developers, small business owners and others seeking independence and financial rewards – all of whom poured years of hard work into preparing for and building lucrative careers – walk away from the success and money and don’t look back.

Network Marketing is booming because it is the definition of the American Dream. It gives each and every person, regardless of background, education, or wealth, the opportunity to become successful in today’s marketplace. And Network Marketing companies do this by combining the conservative philosophies of free markets with the progressive philosophies of spreading the wealth to all those involved. Network Marketing allows you to create your own lines of distribution, and you are paid from each and every sale made from those distribution lines. And if the products just happen to be a disposable product that the consumer purchases on a constant basis, you have just created an ever-lasting stream of income.

Now is the perfect time for Network Marketing to expand. With the banking system in turmoil, professionals are looking for an avenue that allows them to create an income without borrowing from the banks. This is the first in a series of articles I will be writing on how to fix the economy. Future articles will expand on what has already been discussed and will bring forward other issues on this subject. It is in fact up to us to get this in order. It is up to us to get out of debt. It is up to us to keep the economy from complete collapse. I hope you will join me in this effort to get out of debt and create new jobs. If you would like a consultation or further information about what we have discussed today, feel free to fill out the contact form. Your information is private and secure, I am the only one who will make any contact if you allow me. Don’t wait for your situation to get worse. Don’t wait for your situation to get better. Start doing something TODAY to make a positive change.