Value Tag

Consumer debt among American families was recently
reported to total $12.73 trillion. To put this into
perspective, the US government debt is just shy of $20
trillion. The outrageous amount currently owned by
consumers is higher now than the peak reached in 2008
before the economic collapse. Although consumers are
handling this level of debt better today than they did in
2008, it still represents a tremendous risk to individuals
and our economy as a whole.
Interestingly enough, mortgage debt is now a smaller
percentage of total debt than it was back in 2008. Of
course, this is primarily due to tighter lending restrictions.
This means that Americans are holding more debt in
riskier loans such as credit cards, bank loans and car
loans for example. Much of this debt is subject to
fluctuating interest rates, which is now something we
need to consider as the Fed pushes short term rates
higher.
I believe that consumer debt is usually a habit. Unsecured
debt, such as credit cards, could be a sign of spending
more than the income flowing into the household. To
break this cycle, sometimes more extreme measures
must be deployed. If the goal is to get out of consumer
debt, it could be advantageous to use a mortgage or
home equity loan to help. With values rising to premarket
crash levels, most people have a decent amount
of equity in their homes. However, I strongly caution
against this without a plan to break the cycle that led to
the debt in the first place. Otherwise, the same situation
is likely to occur.

My wife and I are considered by many to have a hot, sexy marriage. I must admit, that’s a badge I wear proudly. It seems rare to find couples who met in high school 28 years ago who are still passionately in love. I often get asked what are secret is. Although I’m far from an expert I have created a theory that has greatly helped me. and I’d like to share it with you.

Healing Conflict – According to Mike

Conflicts are one of the greatest relational challenges we face in life. Although they can be painful, they can also provide opportunities for personal growth. In fact, some of my greatest growth stemmed from the hardest trials I have experienced.

If you truly analyze the root of personal conflicts you encounter with another person, you will find that many of them stem from a misalignment of how each person is proportionately valuing two mutually exclusive alternatives. For example, in a marriage one person may value their work more than having dinner as a family at 5:30 pm each night. It isn’t that either party is right or wrong, it’s simply that they are not valuing the two options the same.

Whether it’s intimacy, time together, spending money, or how active a lifestyle they live, all couples have areas in their lives where they’re not in alignment. In such cases, there are three options that will avoid continual conflict:

1. One or both parties genuinely alter their values to come into alignment with the other person in a true and healthy way.

2. You live according to your alignment and your spouse modifies his/her behavior to “artificially” align with your values. In this case, you may be happy and feel that all is good, but your spouse will live in conflict.

3. You adjust your behavior to artificially align with the values of your spouse. In this case, you feel pain and continue to live out of alignment with what you believe.

Clearly the first option is the only healthy solution. In many cases, issues that are creating conflict can be mutually aligned with a discussion and a real look in to what each person is valuing in a situation.

In the case of the above example, the person working while the rest of the family is eating dinner together may not be what they truly want in life. They may just be in a competitive job that requires they work beyond 5:00 even though they truly would like to be at home sharing time with their family over dinner. Or maybe they do value working long hours to provide for their family. …Understanding the WHY behind the behavior is the first step in coming together.

As for #s 2 and 3, these are far more painful and have the greatest chance of creating division and distance in a relationship. From what I have witnessed, it seems there are five possible outcomes:

1. The conflict eventually ends the relationship.

2. One person continues to live out of alignment with their values, in a state of conflict, while the other person goes on; possibly not even realizing they are creating pain for their spouse. This is the case when you hear of someone who thought they had a wonderful marriage and then received surprise divorce papers. They didn’t realize that their spouse was existing in conflict that eventually caused them to snap.

3. Each person compromises and they establish an agreed upon solution that is comfortable to both parties.

4. The person living out of alignment adjusts their values in a healthy way to become in alignment with the other.

5. The person setting the course re-aligns their values.

The reality is that each of us need to question what we are truly valuing in life, and determine which values are healthy and which ones are not. For example, if I was to have a girlfriend on the side, it would be an indication that I might be valuing attention from another above my marriage commitment. This would clearly be an unhealthy value that would not serve me or my family well. I would then get help to realign my values in a healthier way.

The key takeaways that I hope you learn from this are:

1. Talk openly when you are out of alignment with your spouse’s behavior.

2. Never make your spouse wrong when they verbalize that they are out of alignment with you. It isn’t a matter or right or wrong. It’s simply that current values aren’t in alignment.

3. Seek to create a level of safety in your relationship where both parties feel comfortable discussing areas in which they feel conflict.

Having a fulfilling relationship for almost 30 years takes work, hard work. Of course, we work on different issues today than we did back then. It’s a never-ending commitment.

I hope you find value in my theory. It has certainly helped contribute to the success of my relationship. If I get a good response from this, maybe one day I’ll share my fool-proof recipe for a passionate sex life! 😊

2016 was a great year for the Utah Housing Market. According to CoreLogic, a well-respected source for housing market statistics, the average home in the State of Utah grew at an 8% annual pace over the last year. Further, it states that home values have nearly recovered all of their losses since the Housing Crisis of 2008. This strong report makes Utah one of the top appreciating Housing Markets in the country, which is great news for those who currently own a home.

With interest rates moving higher over the past few months, some are worried that this will have an adverse impact to the future value of homes. Although there is validity in the concern, the longer-term impact of rising rates has often proven to coincide with high levels of home value appreciation. Let’s take a look back on history to help form a conclusion.

The graph below shows four points in time when mortgage rates experienced rapid rates of increase and compare those times with their annualized rates of home value appreciation over the same period. As you can see, not only did home values remain in growth mode, they often experienced attractive improvements to home values. TRUST E D · R E S P E C T E D · LOVED

Traditional economics support the theory that as the cost of a mortgage increases with higher rates, the value of homes will fall to bring the relative cost back into balance. However, when values are rising because of growing incomes and a stronger job market, home values have room to move higher even as rates increase. Given the current strength of the housing market, the current level of wage growth is more than enough to sustain a reasonable rate of home value appreciation. Utah’s Unemployment Rate is currently at 3.2%, which is considered “full employment.” Further, the outlook on the job market is expected to remain strong for years to come; making Utah one of the greatest places to live.

Utah Home Values 2017

Although mortgage rates aren’t anticipated to experience a significant increase in 2017 (see next month’s 2017 Market Forecast), some experts and media pundits are calling for a drop in home values this year. Although we anticipate a slower pace of growth in 2017, we still see at least a growth rate of 4.5%. This is a healthy rate of appreciation and a level that is sustainable for the foreseeable future.

Of course, there is no way to say for sure what will happen, but it doesn’t appear likely that higher rates will have a significant negative impact to home values here in Utah.

High rates of home appreciation provide a tremendous opportunity to increase net worth. If you plan to move-up in the near future, you may want to make the move sooner rather than later. An extra $100,000 in home value, increasing at a rate of 4.5% could add an additional $14,000 to your net worth over the next three years. This could also be achieved by purchasing an investment property or a second home. Also, if you have millennial children, encourage them to become homeowners early in their adult life. Home ownership is a determining factor of long term financial health and security. Starting early is the key.

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