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For those of you that don’t know, I just recently moved from a condo into a house. As a Realtor, you would think I have the timeline of when things are suppose to happen pretty well memorized. So you can imagine my surprise this past week when I get this official-looking letter in the mail with instructions on how to order an official copy of the deed to my property.

I must’ve flipped the letter over two or three times (it was front and back) before I realized this was just some shifty person’s way of making a quick buck. You see, here’s a perfect example of someone (or some official-looking company/LLC in this case) that thought they could get involved in a real estate transaction that didn’t involve them… and do so after the transaction was done!

This company prints up cool-looking, official-like letters and mails them out to everyone that buys property in a given area, which is easy to do since these transactions are of public record and are even printed in the newspaper. With many newspapers going online, one could do this from anywhere. They tell you in their letter that if you haven’t yet received the certified copy of the deed to your house to respond to this letter and they will send it to you.

The problem with this you ask?! Most people buy homes with a loan… a mortgage. Some mortgage companies do not send you a copy of the deed or do so well after the transaction has been completed. The original, signed deed is filed with the county auditor’s office and anyone can go into the county auditor’s office and review those documents at any time. For a fee you can have them print you a copy. In some technology-savvy counties you can just do this online.

So when Joe Homeowner goes back into his house and starts hunting for his certified copy of his deed, he realizes he doesn’t have one. He then responds to this dressed up advertisement and pays them an ungodly sum (I think they wanted $67.50 or some odd but specific amount from me) plus whatever fee the county charges them - the company - to get the copy of the deed plus postage and handling to send it to you.

Oh yeah, and one more thing. In tiny, tiny print at the bottom of the document they disclose that they are not a government department or affiliation and that many of these deeds are available directly from the issuing agency. Nevermind the fact that they named their company something official sounding and mailed out all these letters asking you to order your certified copy of your deed.

Save your money. Do one of the following to track down a copy of your deed for your records: call your mortgage company and ask them to send you a copy, or the title agency/closing agency/attorney that handled the transaction, or call the county auditor’s office directly to get a copy if you want one. Don’t panic because you don’t have a copy, as long as it’s filed with the county you are o.k. But do make sure it’s filed with the county. And do make sure you get a copy from either the mortgage company, the title agency, or the county directly. Save it just in case there is somehow a mixup or glitch in the county’s records and your property is mistaken for another, etc. Which brings up another good point: Buy Title Insurance. There will be an entirely separate blog post about title insurance due to the amount of things that we can discuss on that.

My bank’s title agency did in fact send me a copy of my deed but there was a significant lag between when it was filed with the county and when I received it. Therefore, if this company gets these letters out quick enough, the unsuspecting homeowner could purchase it, only to receive it from this company and the bank or title agency later. I’m sorry I don’t have the name of the company, etc. to report. I was so disgusted when I read the letter I ripped it in half and tossed it in the garbage. I will keep my eye out for others like it though and report them on this blog when I come across them.

As always, I welcome your comments and feedback…

I don’t like to write about my accomplishments. It makes me feel like they are not as impressive when I have to broadcast them. But then I guess if I don’t tell people about them, how will they ever know when I have achieved something!?!

So it is with great reluctance that I post this to my blog. This week I completed my Accredited Advisor in Insurance (AAI) designation. While this may not exactly rival completing my MBA at Xavier University (which I am set to do within the next year… or so… as I only have 5 courses left), this is still an important designation that builds on my existing coursework in insurance. Not only does it satisfy my continuing education requirements for the state of Ohio, but it has also provided me with a much better understanding of how to manage an insurance agency should I ever choose to do so. As many of you know, right now I am not actively selling insurance as an agent, but it’s something I might do (again) in the future.

You can read more about the Accredited Advisor in Insurance designation by visiting the AICPCU.org website. The complete list of my academic accomplishments and professional experience can be found on the About the Blogger page of my website. I am continuing to make progress toward completing my MBA, obtaining the Chartered Property Casualty Underwriter (CPCU) designation, as well as various other designations. The next thing that I absolutely must complete though, is my required 30 hours of real estate continuing education that is due on my birthday this year. Once I complete that, my real estate license will be valid through 2010.

Oh, and I am also proud to be associated with the Xavier University School of Business and particularly the MBA program. Once again, and for the second year in a row, the part-time MBA program is ranked as one of the best in the nation by US News and World Report, 26th overall.

As always, I appreciate your comments and feedback…

There’s an old saying Change is good. I’ve continually added more financial topics to this website and received an increasing number of emails and feedback about its content. But it’s not enough to simply add more topics or to post more articles to my blog with increased frequency though. I am now striving to add valuable content that is original in thought and provokes a great discussion.

To help keep the audience as up-to-date as possible, an RSS Feed has been added to the website. By clicking on the Subscribe button you can receive the latest updates in your email or through your Yahoo!, Google, etc. homepages/accounts. I want you all to know that I do not have access to a list of my subscribers so I don’t know who is “accepting the feed” and therefore I do not know who my subscribers are (unless they of course email me and indicate that they are a subscriber). I mention this because I don’t want people to be concerned that their personal information will be passed on to others and also that it is strictly anonymous. I don’t who reads this blog, and I like it that way because then it is no different whether you simply visit my website or receive the content via email.

I do however appreciate any and all feedback, comments, criticisms, etc. And to provoke a great discussion about current events related to my website’s theme All Things Financial, I would envite you all to let me know what financial topics and which events in the stock market or real estate market are of most importance to you. These comments in the blog or emails are a great way for me to tailor the content to the readers’ interests and I hope you will make this website an interactive and fun financial resource for all to share.

Thanks for reading, I appreciate you visiting my website!

Wow. It’s been less than a month since I posted a chart on this blog about the Dow reaching 14,000 and closing at that price (look back at my July 19th blog post). Just 4 days shy of a month and the Dow has fallen over a thousand points on concerns over the sluggish real estate market, over-extended consumers and therefore a concern that consumer confidence is wavering, subprime mortgage defaults potentially exploding, and a lack of liquidity as investors shun mortgage-backed securities - especially those by subprime borrowers.

While the market briefly rebounded for a day in response to the Federal Reserve injecting more liquidity into the banking system, the sell-off continues and the Dow Jones Industrial Average has closed today at 12,861.47. The article posted to Yahoo! Finance does an excellent job summarizing what’s currently going on in the market. (Adobe PDF Version).

Unless we start to see some positive economic data or corporate earnings being released, I would expect to see a few more weeks of the market trading overall downward, with a few upswings as some investors jump back in to buy shares at lower prices than they previously sold as well as investors covering their calls or adding more shares to their account to lower their average basis (those die-hard dollar cost averaging investors). In general though, the Yahoo! article was right that historically and typically the months of August and September are the slower months for the stock market. It may be an excellent time to buy if you are in it for the long-term, say 1-3 years. But I am not expecting to see the Dow Jones Industrial Average back up to its all-time high, or even remotely close to 14,000, by the end of the year.

As always, I appreciate your comments and feedback…

This news will not come across as anything shocking to those that follow the real estate market. Existing home sales are down in 41 out of the 50 states for the second quarter of 2007 (April through June).

The article published on Yahoo! does indicate some local markets saw price increases, but these were more isolated instances - such as the 4.1% increase in sales for Iowa and the 2.9% gain in North Dakota. (Adobe PDF version of the Yahoo! article). The subprime mortgage woes and tighter lending practices are certainly having an added affect on an already soft market. The markets will continue to be slow if the Fed decides to lower interest rates and the few buyers that are out in the marketplace right now might start to hold off on making a purchase in hopes of getting a lower interest rate on their mortgages.

The Cincinnati and Dayton, Ohio markets continue to be stagnant. While we’re not seeing the huge declines in price that other areas of the country are seeing, more homes are taking longer to sell and prices have landed softly as opposed to rapid decreases.

As always, I welcome your comments and feedback…

I am pleased to announce that with the help of Aaron Forgue, we have launched a new website for Northern Pine Properties, Inc. As many of you know, Northern Pine Properties is the company that I founded for my real estate holdings, only to evolve into the company that I am using to launch additional ventures.

While the company website is still very static and will require additional work to fill in the content as well as adding additional features - such as a Contact page, etc., the “bare bones” are now in place and I appreciate any feedback or comments you might have. If you have an interest in real estate and/or alternative energy, the Northern Pine website is where I hope to update my activities in these areas - such as investing in land and my interest in solar power.

As always, I appreciate your comments and feedback…

Please note: I have posted this same article at Cinventure.com, a website devoted to entrepreneurship in the Greater Cincinnati, Ohio area.

Let’s face it - we entrepreneurs are all pretty optimistic people. I mean, we come up with these business ideas and we’re willing to tweak them until we can get them to work. Fortunately for the optimist there is a reality check that can be used to maintain a comfortable level between it’s a sure thing and that will never fly. It’s called an acid test, and most banks and seasoned investors will want to see one.

The Acid Test, also known as the Quick Ratio, is derived from the Current Ratio. Thus, we need to briefly discuss the Current Ratio first. Anyone that is currently running a business or is in the planning or startup phase will want to be concerned with managing the cash flows of the business.

The Current Ratio does just that. It is simply the ratio of the firm’s current assets divided by the current liabilities. The current assets are those that are the most liquid - namely cash, accounts receivable, and any inventory. Current liabilities are those bills that are due within this year (the current term). If your firm’s current liabilities begin to exceed the current assets, you run the risk of a cash shortage and could soon be facing liquidation just to meet your current obligations. You don’t want to be forced to go deeper into debt just to pay your monthly bills as this only makes it harder for your business to continue to survive.

If you take the inventory out of the Current Ratio you are now left with the Acid Test. This is basically a method used to determine the liquidity of the business, namely how much cash is on hand to pay the monthly bills. The acid test is also an excellent gauge when used along side the Burn Rate, which is simply the amount of money being spent in a given period during the startup phase of the business (or a period of less income than expenses - this could be an off season, such as a homebuilder in Minnesota during the winter).

If you know you’re burning through $3,000 per month and expect break even to be reached during the 7th month of operations, you know you need $18,000 to carry you over till you start to break even and turn an operating profit (6 months times $3,000).

If your Acid Test ratio is less than 1.00 you know your cash is less than your current debt and you are going to face a cash crisis soon unless you can turn things around. The Acid Test could be less than 1.00 because sales were not as high as expected (thus not as much cash in hand and you are holding more inventory - which as you know we do not include inventory in the Acid Test) or it could be that your business is taking on too much debt given the amount of money it’s bringing in (e.g. you owe $10,000 each month and only bring in $1,000 in sales). We don’t include the inventory in the Acid Test because, well to be quite frank, you’ve obviously not sold it yet and if your company is struggling it could be that no one wants the product! When a company has to be liquidated, it seems inventory is always sold pennies on the dollar. This is the reality check part of the Acid Test.

An Acid Test of 1.00 means your cash and debt levels are equal. Please don’t think that equal means optimal!!! The higher the ratio the better. What if sales dropped off and you start burning through more cash?! The ratio would quickly slip below 1.00.

One final note about Acid Tests, Current Ratios, and Burn Rates: these numbers are only representative of what is going on in the business today. I would be much less concerned about a startup with an Acid Test ratio of 0.80 that just landed a huge contract with a Fortune 500 company than another entity that has an Acid Test ratio of 1.20 and is in the business of making typewriters, payphones, or door-to-door sales of encyclopedias. I’m sure you all understand why that is. If your business and its industry has a bright future, it’s understandable that you are taking on additional debt now to get your operations up and running.

To sum it up: if you have an Acid Test ratio less than 1.00 your Burn Rate will be accelerating and you will see a more rapid depletion of cash in your business in the near future. An Acid Test ratio greater than 1.00 will generally indicate more cash coming into your business (this could be from increasing sales and/or a reduction of current liabilities) and is a rough indication of growth or growth potential.

As always, I welcome your comments and feedback…

Sure it’s not easy getting an idea from the drawing board to the shipping dock. And this is where successful entrepreneurs set themselves apart from those who are just dreamers. So when you come up with a great idea but lack the resources to launch the product or service, what do you do? Well, without tacking on that second or third mortgage onto the house or before you tell your children to kiss the thought of college goodbye, consider some thoughts on what I like to call economic resource rationing.

Here are five ways to help conserve cash during the start up phase. Each method is discussed in more detail below the list.

1. Scale it down.
2. Add non-cash equity.
3. Ask suppliers for more favorable terms.
4. Consider generic instead of name brand and shop around.
5. Invite enthusiastic and early suppliers and customers to become investors/partners.

1. Scale it down. Instead of manufacturing 10,000 wigits in the first year could you get the business up and running by making 5,000 of them. During this initial launch you could also be seeking out additional investors and demonstrating your new product to a select few customers.

2. Add non-cash equity. This option is great when you’re planning to go to the bank to ask for a loan, especially when you’re going to be offering an intangible product… namely some type of service. In a service company (like a law firm, doctor’s office, etc.) you won’t have a tangible product for the bank to repossess if you default on your loan payments.

Consider this: most people own a personal computer, some furniture, office supplies, a car, cell phones, printers, art work, digital camera, general purpose tools or tools of a certain trade, and so forth. While banks won’t want to see a list of every item you own (the shirt off your back so to speak), if you are funding the business with all of the necessary office equipment and tools you’ll need the bank understands you won’t be rushing out to spend the bank’s money on furniture and computers at Office Depot. Use what you already have at home, list it as a business asset when you go to apply for a loan and save your new start up the precious little cash the bank will require you to contribute to the loan in order for it to be approved.

3. Ask suppliers for more favorable terms. There’s a couple of old mottos: “it never hurts to ask” and “the worst they can say is no“. This could not be more true than in dealing with those suppliers for your business. Remember, YOU are their customer. If you’re starting out and don’t have much cash, ask for more time to pay.

A lot of companies want payment 2/10 net 30, meaning you get a 2% discount for paying in the first 10 days and if you don’t pay in the first 10 days the full amount is due within 30 days. Other companies, especially larger suppliers, may try to push their own credit program on you - for instance if you go to any of the big box stores or office supply stores they will want you to sign up for a business account or store credit card.

Let them know right up front when you order that you are a new business and you need to stretch your dollar as far as possible. Ask if it’s possible to pay over 60 days instead of 30. If they balk at that suggest 45 days. Always start with the higher number. Let them know that within the year you hope to be taking advantage of any discounts for paying early (once your venture starts bringing in revenues as opposed to burning through cash at the start).

4. Consider generic instead of name brand and shop around. By this we don’t simply mean buying the store brand, single-ply TP for the office or the refurbished ink cartridges. When building your wigit, is there a part or component that could be made cheaper by someone else and added to the final product, or can a piece be substituted for another (making them interchangable and therefore reusable). The easier it is to swap parts, replace parts, and interchange them, the easier it will be to make your product cheaper and at a lower cost to you.

If you are offering a service rather than a product, this means buying the store brand pens that dry up faster… no, just kidding, you can still shop around for lower prices on things you use to bring your service to market or that add value to your service. These value added features will of course depend upon your service or possibly a particular customer’s needs.

5. Invite enthusiastic and early suppliers and customers to become investors or partners. You will find out early on that there is no one who wants you to succeed more than your suppliers. They like for their customers to grow as that helps them grow in return. If a particular supplier is eager to help you get up and running, and to sell you more supplies, perhaps this supplier would be willing to take an equity stake to help get your venture up and running.

It could be as easy as providing a set amount of supplies for free, giving you a discount, an extended amount of time to pay, or could be actually taking an equity stake in return for some capital. Likewise some customers early on may like your product so much that they want to ensure it will be there to meet their needs down the road. These customers have a vested interest in seeing your business becoming successful and sustained. At the very least these early suppliers and customers represent a good resource that can help your business grow. These groups also represent excellent sources for advisory panels, board of directors positions, and by making them more involved in your business will help forge more loyalty and drive growth. If you go to a bank looking for a loan it will also look better in the bank’s eyes that you take such an interest in your customers and suppliers and value their feedback and input.

There are many more ways to help get your business up and running without having a truck load of money to get started. This article is meant to stimulate your thoughts on what you can do in your own unique situation to think outside the box with regard to funding your venture. Please feel free to share any alternatives to cash investment that you think might work or even those that you have tried that don’t work and why they didn’t work.

As always, I appreciate your comments and feedback…