2011 is upon us. It seems like everyone has predictions for what the year will hold. I’ve read about how mortgage interest rates will rise to 6.5% by years end. I’ve read about how the European economy will collapse by the end of the year and the Euro will have to be shelved because industrial countries like Germany are prospering while tourism centric countries like Spain and Greece are falling into bankruptcy.
Me? I don’t think I care to make any predictions. Rather, what I intend to do is to figure out how to shore up my finances so that I am in the best position I can figure out how to be. I am working on paying down my debt. Credit card debt, mortgage debt, it all needs to either get paid down, or it needs to be refinanced into something with the good rates that prevail today.
I don’t know if interest rates will go up this year. After all, everyone said last year that they had to go up and they haven’t yet. But, I can say that they aren’t going down. There just isn’t room for any significant downward movement. I think it’s a toss up whether they will go up or remain in the 4% range. The Obama administration has a lot of reason to keep them low. We may be moving out of this recession, but we will need a lot more proof of recovery before the Fed will feel comfortable raising rates. There is an election in two years and the Democrats took enough of a beating this year. They are going to have to tread carefully for the next two years. They can’t afford for the economy to stagnate or falter. They have to find a way to prompt growth and raising interest rates is likely last on that list.
But, back to what to do this year. Once your debt is reduced, what else can you do? Me, I would be very interested in finding some real estate at a really good value. Probably a fixer-upper is your best bet. Something like a Bank Owned property that doesn’t have other than cosmetic damage to it. It could be a lot of cosmetic damage, but it should not be significant damage like structural problems. Companies like Realty Bargains have great tools for seeking out Bank Owned bargains.
If you are handy with a hammer, you could buy one of these bargains and fix it yourself. Otherwise, there are a ton of people who are handy and could help you out.
Paying down debt, or buy a house at a bargain. I cannot see how either of these can do other than help you prepare for the future of 2011 as it comes upon us.