The Cornerstone of My Business

The Cornerstone of My Business

One of my favorite “Sales” teachers is Dan Kennedy who has taught me so much about how to build a business of “raving fans”.  Dan does not believe in trying to “convince” people to buy your product.  Instead, he teaches you how to provide value and information to people who need you so you can “help” them buy your product.  There is no “selling” involved in this method.  Instead, you focus on helping people and the sales will follow naturally.

He also preaches the need for becoming an expert in small segments of your business.  “Niches to Riches” is phrase used often and I’ve come to believe in that idea wholeheartedly.  Even though I can do most types of loans in this arena called Mortgage Origination, my own niches are Credit Improvement and First Time Homebuyers.

I create a regular stream of business by finding people who need help fixing their credit and helping them become homebuyers.  Along the way, I find plenty of folks who are ready to buy their home now or want to refinance their homes to take advantage of lower interest rates, but it’s the folks who aren’t ready right now – and all they have is a dream and the desire to do what they need to do – that are particularly satisfying to work with. 

Guiding them through how to raise their credit scores and how to deal with collectors so they can get ready to buy a home is the “value and information” I provide, and when they finally get to the point of qualifying for a mortgage loan, who else are they going to go to for their loan?  I get to help people who other mortgage places turn away, and when we’re done, they become my best future-client lead sources.  It’s smart business that has benefitted hundreds of families over the years.

Get $500 In The Bank

You’re trying to get in position to buy a home.  You may have huge outstanding debts or serious credit blemishes on your record.  Maybe collectors are calling you and you’re afraid to answer the phone and it seems every time you get a paycheck that your immediate bills already add up to MORE than your take home pay.

If this sounds like you, or maybe your situation isn’t nearly this severe but things are still tight, the first step to financial freedom and getting yourself ready to buy a home is to start with getting $500 in the bank.  And I don’t just mean that you deposit your paycheck and then spend it.  I mean $500 that sits there, doing absolutely nothing.  Month after month, your bank balance NEVER goes below $500.

And here’s the harsh part of this lesson:  If you can’t do this, you shouldn’t buy a house and you shouldn’t even think about it anymore.

But, I’m not telling you that you have to be able to do this right this minute.  It’s okay to take a few months to get there if you need to.  But start right now getting yourself to this position.  Make it a priority.  Think of it as your first test.  If you can quickly and easily pass this test, you’ll be in good shape to buy your home very, very soon.  If you struggle to pass this test, then realize you’ve got a long battle on your hands to get yourself ready to take on a mortgage.

Sadly, You’re Not Alone…

Why $500?  Well, first of all you should realize that if you don’t have $500 in the bank, you are not alone.  A recent survey revealed that over one-third of adults under the age of 35 did NOT have even $500 in the bank (Percentages improved slightly with older age brackets, but not much).

When you live this way, you know about the devastating effects of overdraft fees, late charges, and the helplessness you feel whenever an emergency strikes – car breaks down, appliance failure, medical emergency, etc.  Any one of these things can wreak havoc on your budget for months before you can catch up again – that is IF another emergency doesn’t hit you again right away too.

We’ll look at ways to build this $500 cushion in upcoming articles, but to get you started, here’s your first assignment: 

When you get your next paycheck, write yourself a check for $100.

Don’t cash the check, but do deduct it from your registry – you’ve now given yourself a $100 cushion in your checking account – enough to prevent bounced checks.  Maybe instead of cashing it, you put it a frame and hang it someplace where you’ll see it often as a reminder of what you’re trying to accomplish?  (If you use a debit card and rely on the ATM balance, you’ll need to mentally subtract this $100 each time you see your balance.)  

Honey?  The Show Starts At 6:45 – Don’t Be Late!

This technique is the same principle my wife uses to make sure I get someplace on time – she’ll tell me something really starts 15-30 minutes sooner than it does, creating a little time cushion, and that way I always seem to show up on time.  So create a little checking account cushion and it’ll likely save you $100’s over the next year in banking fees, and it’ll get you that much closer to buying a home.

How To Get $500 In The Bank – FAST!

In another article, “Get $500 In The Bank”, I told you to write yourself a $100 check without cashing it (hanging it on the wall someplace you can see it everyday for motivation) to create a little cushion in your checking account to prevent bounced checks (and hefty bouncing fees).  This is the first step towards getting $500 in the bank and keeping it there.

I also told you, in a kind of snotty way, that getting this $500 in the bank was the first step towards home ownership, and if you weren’t able to do this first step, then you should give up your dream of owning a home. 

Well, that was down-right RUDE!

Yes, it was rude – but it was also true.  It is easy to preach at you about things you should be doing, but it is quite another to offer practical solutions.  And I’m a practical solution kind of guy.  Step one was to create the cushion in your checking account.  Step two and three are below. 

Three steps ANYONE can do that will put $500 in the bank right away.  So, again, if you can’t manage to get the $500 in the bank – even after I show you this anyone-can-do-it 3-step plan, well, just keep renting and miss out on the most proven wealth-building vehicle (home ownership) that there ever was and ever will be.  (Oops!  I got snotty again there)

Step 2:

Step 2 may seem silly to you, and right off you’ll think, “Oh, that will do me a lot of good – NOT!” but come on!  Just play along!  How many other debt management, wealth-building, how to buy a home articles have you read that haven’t gotten you anywhere?  I’m guessing, quite a few.  But this step is so stinking easy to do, and it will get you STARTED, that you just need to do it.  If you don’t have a pile of cash in the bank right now – then DO THIS!!!

Here’s what you do:  Go through all your coat pockets, cups in the laundry room, dresser drawers, car ashtrays, couch cushions, etc., and gather up all your loose change.  (Loose change?  Are you serious?  Hey, just do it – you’ll be shocked how much change you have.  And it doesn’t even matter how much you have.  37 cents?  $20?  Doesn’t matter.) 

“I’d like to open a savings account with this $2.54…”

Once you’ve gathered up your coins, head to your bank and get some of them free paper coin rollers.  While you’re there, find out about how to open a savings account – any rules you need to know.  Then head home and roll the coins up.  You’ll use this as the opening deposit in your savings account.  (Yes, most banks will let you open a new savings account for as little as $1.00.)

How does this help you?  It gets you started.  You’ve actually taken an action step.  You’ve started to build real momentum.  AND you’ve created a “landing pad” for the next wave of deposits you’ll be creating with Step 3.

Step 3 – Remember, ANYONE Can Do This

In Step 3, you’re gonna part with some junk.  Find your old record albums, cassettes, video games, VHS movies, books, and get ready to sell them.  You can use Ebay or Craigslist or try taking your books to a local half-price book store and see what you can get.  Look for other items that may have some value – old coin collections, jewelry, tools, Boy Scout merit badges.  Get these sold!  (Come on, do you want a house or an apartment filled with junk?)

Don’t stop with just YOUR junk.  Ask your relatives and friends if you can clean out their junk for them – if they know why you’re doing it, they’ll be happy to help you out and provide you with lots of cool stuff.

If you don’t know how to do Ebay, etc. yourself and don’t want to learn (Hey, did you miss that part about “anyone can do this”?) then it is NOT hard to find someone who will sell your stuff for you on Ebay and take 30% of the profit – that’s better than nothing if you just can’t do it yourself for some reason. 

Let Your House Seeds Grow

Your goal is a minimum of $500.  Don’t stop until you get $500 in that new savings account.  Once that $500 is in your savings account - DON”T TOUCH IT!  That $500 is your house “seed” money.  Plant it and it’ll grow into a home.  Pull the seeds out of the ground before they grow, you got nothing but worthless dirt.

What did that take you – a day or two?  Did you enjoy doing it?  Many people supplement their incomes nicely doing Ebay-like selling.  Ebay.com has free tutorials that show you step by step how if you want to learn.  This one skill could get you your house faster than you can imagine.  Something to consider doing more of, but at least do it this one time – it’ll feel like progress!  Do it!!!