Your Money: Sharing Family Getaways Without Any Cottage Conflicts


Picture it: 40 picturesque acres nestled in Wisconsin lake country.

That is the ideal getaway the grandfather of Chicago financial planner Tim Obendorf’s wife built around 50 years ago. Then the property passed to the next generation, with ownership shared by four people.

Now they are thinking about the next generation: 11 potential owners.

Without the right planning, that paradise could turn into hell.

As brothers, sisters, parents, aunts, uncles, cousins and grandparents gather this summer at family homes to go hiking, canoeing or swimming, there will also be arguments over schedules, property taxes or mortgage costs, and upkeep duties, along with the thousand other matters that come with shared homeownership.

“Whenever a number of families are under the same roof, conflicts are going to arise,” said Jill Shipley, managing director of family dynamics for Abbot Downing, a division of Wells Fargo that handles high-net-worth families and foundations.

That is why Obendorf’s family has already logged a couple of family meetings. “It’s never going to be perfect, but you have to decide you value the place, more than the hassles of working through family issues,” said Obendorf.

It is not surprising that vacation homes have become a point of contention. Many vacation homeowners are baby boomers: They possess the bulk of the nation’s assets and are projected to hold over 50 percent by 2020, according to a study by the Deloitte Center for Financial Services. They are now beginning to retire as they hit their 60s and 70s.

The potential problems are plentiful: Is the place big enough for everybody? Who gets it on July 4th weekend? Do they split costs equally? Who cleans up, handles repairs, or stocks the fridge?

And the big one: When the owners eventually pass on – who gets the place?

How can families get the most out of shared vacation properties this summer, without either going broke or killing each other? Some tips from the experts:

Draw Up a Calendar

Just like season tickets for a sports team, some dates will be in high demand. So if the property is not big enough to handle multiple families at once – or, let’s face it, you just do not get along – pick your spots. “Establish a rotating lottery each year, and allow each family member to pick their respective dates,” suggests Kevin Reardon, a financial planner in Pewaukee, Wisconsin.

Write Down a Policy

Everyone has different opinions of what a getaway should be, so hash it out and put it all down on paper. One key item: Whether ongoing costs like property taxes, homeowner’s association dues and repairs are split equally, or allocated based on usage.

Create an Opt-out

A sure way to guarantee family resentment: One member being forced into an arrangement they do not want. If a family cottage is being passed to the next generation, allow an escape hatch that permits one member’s share to be bought out by their siblings. After all, not everyone might be able to use the property to the same extent, especially if they have moved far away.

Bring in a Pro

Siblings, of course, do not always get along. In fact, 15 percent of adult siblings report arguing over money, according to a new survey from Ameriprise Financial. To make sure everyone is heard, bringing in a trained facilitator is probably your best bet, advises Shipley.

Have the Discussion Now

“I have been in many family meetings where the kids ask, ‘I wonder what mom and dad would have wanted?'” says Shipley. So if you are fortunate enough that the family matriarch and patriarch are still around, arrange a family meeting and find out what they envision for the property in the decades to come.

Maybe they want it to stay in the family, as a legacy for the grandkids. Or maybe, because of family circumstances like far-flung siblings, it would be wiser to just sell the property and split the proceeds.

Set up a Trust

One way to take future financial squabbles out of the equation altogether: If families have the resources, they should create a trust to “fund the maintenance and ongoing use of the property in perpetuity,” says Shipley. “That is one solution to reduce conflict, and keep the property in the family for generations.”




Written By: Chris Taylor
Source: Reuters

Here’s Why Tony Robbins Tells Millennials to Buy a House, Not a Home

© Blog

For generations past, home ownership was a significant rite of passage that signaled stability, commitment, and, often, prosperity.

But, in this as in so many other cases, millennials are different.

As of 2015, adults under age 35 made up 19 percent of U.S. households but less than 10 percent of homeowners, according to a report released by Harvard University’s Joint Center for Housing Studies. In fact, in 2015 home ownership for that group fell to a historic low of 31 percent.

Entrepreneur and bestselling author Tony Robbins says that, while millennials might be missing out on the social upsides of home ownership, real estate is not the best investment they could be making


“One of the weakest performers [is] your own personal real estate, because it doesn’t provide much income,” Robbins says. “It’s an inflation hedge. You do a little better than inflation, and you can have your own home, so there’s a psychological, emotional benefit.”

Instead, millennials in a position to buy property should be considering how to do so in a way that will provide them additional cash flow, he says.

“If you can own real estate, real estate with an income is the one [form of] real estate that’s more valuable,” says Robbins.


Opinions on the imperative of millennial home ownership vary.

Self-made millionaire Grant Cardone tells CNBC that home owners are forced to continue to spend unceasingly, and that he regrets buying a house at age 30.

“Unless you have 20 million bucks in the bank, in cash, you have no business buying a house,” says Cardone.

In personal finance classic “Rich Dad Poor Dad,” author Robert Kiyosaki notes that houses should be viewed as a liability, as opposed to an asset, and points out that it’s not a given that a home will appreciate in value.

“I am not saying don’t buy a house. What I am saying is that you should understand the difference between an asset and a liability,” Kiyosaki writes. “When I want a bigger house, I first buy assets that will generate the cash flow to pay for the house.”

Robbins emphasizes that real estate investing doesn’t need to entail keys and a welcome mat.

“You can [invest] through a REIT. You don’t have to buy everything, you get a piece of all these things,” Robbins says.

But whether millennials choose to spend their nest egg on a nest, or begin focusing on a portfolio instead, Robbins says the worst mistake is making no investment at all: “The most important thing, I think, for millennials, is to get in the game.”



Written By: Kathryn Dill
Source: CNBC


10 Best States for Helping Home Buyers

© AP Photo/Nick Ut
© AP Photo/Nick Ut

Most Americans want to achieve the dream of homeownership, but for many, that dream is fraught with financial obstacles. That’s why all 50 states and Washington, D.C., offer specific home-buying-assistance programs to help residents turn homeownership into a reality. recently created a database of the home-buying-assistance programs in every state. From that database, we have assembled a list of the states which offer the most robust set of programs to their residents.

What makes a set of programs the best? We rewarded states with home-buying programs open to the majority of borrowers with the most points — four points per program. Down-payment assistance was assigned the second-most significant weight — three points per program. Finally, all of the other ancillary programs were awarded equally — one point per program.

We divided the programs into several categories: first-time and/or repeat buyer purchase programs, down-payment assistance, mortgage credit certificate, energy efficient, home improvement, veterans, disabled homebuyers, and job-specific.

For states that had a tie score, we used higher population (the ability to help more residents) as the tie-breaker.

Here is’s list of the states with the best home-buyer programs:


Score: 18
Number of programs: 7
Montana has the third-lowest foreclosure rate in the U.S., according to CoreLogic’s March 2015 National Foreclosure Report. Perhaps it’s all the support the state lends to first-time buyers. Montana offers seven statewide programs: three purchase programs, one down-payment-assistance program, a program designed to construct, acquire or rehabilitate homes for disabled buyers, a low-rate program for veterans, and a mortgage credit certificate.


Score: 19
Number of programs: 7
The Mississippi Association of Realtors acknowledges that while low inventory and added regulation are holding the local market back to a certain degree, the state is making considerable progress following the downturn. To help more residents achieve the dream of homeownership, Mississippi offers seven statewide programs: two purchase programs, three down-payment-assistance programs, a program for low-income disabled first-time buyers, and a mortgage credit certificate.


Score: 20
Number of programs: 7
The spring home buying season has been good to Iowa so far with both prices and sales on the rise. There’s no better time for potential buyers to utilize the home buying programs the state offers. Iowa offers seven statewide programs, including three purchase programs, two down-payment-assistance programs, a program specifically designed for veterans, and a mortgage credit certificate. Down-payment assistance is available statewide to both first-time and repeat buyers.


Score: 20
Number of programs: 8
First-time homebuyers face tough conditions in California as affordability continues to decline. To help improve affordability, the state offers two first-time and repeat purchase programs, three down-payment-assistance programs, a mortgage credit certificate, a program specifically designed for California teachers, and an effort to promote energy conservation by providing buyers with the opportunity to finance energy-efficient improvements.


Score: 22
Number of programs: 7
Idaho offers its homebuyers three first-time and repeat purchase programs, three down-payment-assistance programs, and a mortgage credit certificate. Idaho’s purchase programs serve many different audiences: FHA, VA, USDA, manufactured housing, 30-, 20- and 15-year conventional loans, and FHA 203(k) loans.


Score: 23
Number of programs: 8
The oil boom in North Dakota has begun to attract many new residents to the state. In an effort to turn those residents into homeowners, North Dakota offers three first-time and repeat purchase programs, three down-payment-assistance programs, a low-rate program for single parents, veterans, the disabled and/or the elderly, and a home-improvement program.


Score: 25
Number of programs: 9
The population boom in Colorado is certainly one of the factors contributing to the state’s limited housing inventory – there simply aren’t enough for-sale properties to accommodate the demand. But the state is certainly doing its part to assist home buyers. Colorado offers four first-time and repeat purchase programs, two down-payment-assistance programs, two programs for buyers with disabilities, and a mortgage credit certificate.


Score: 25
Number of programs: 10
According to CoreLogic, New York is one of eight states that reached new home-price peaks in April, further ratcheting up the pressure on buyers to purchase a property before prices and mortgage rates move even higher. To help alleviate some of the pressure on buyers, New York offers three first-time and repeat purchase programs, three down-payment-assistance programs, a veterans program, two home-improvement programs and a recapture-tax program.


Score: 28
Number of programs: 9
Wyoming has begun to see an influx of buyers from surrounding states who want to take advantage of the lower real estate and income taxes. To help these new buyers capitalize on the ownership opportunities the state has to offer, Wyoming offers five first-time and repeat purchase programs, two down-payment-assistance programs, a home-improvement program, and a mortgage credit certificate.


Score: 28
Number of programs: 11
Pennsylvania is the top state on our list, offering the most home-buyer-assistance programs. Pennsylvania offers four first-time and repeat purchase programs, two down-payment-assistance programs, two programs for disabled home buyers, two home-improvement programs, a program specifically designed for certain professionals (such as teachers and first responders), and a mortgage credit certificate.
Using a weighted average system, assigned a score to each of the 50 states and Washington, D.C. States that offered first-time and repeat buying programs were awarded most generously (four points per program). Down-payment and/or closing-cost assistance options were weighed as the second-most important feature (three points per program). Finally, all the other ancillary programs were awarded equally (one point per program). We divided the programs into several categories: first-time and/or repeat buyer purchase programs, down-payment assistance, mortgage credit certificate, energy efficient, home improvement, veterans, disabled homebuyers, and job-specific. For states that had a tie score, we used higher population (the ability to help more residents) as the tie-breaker.

Written by Tim Manni of

(Source: HSH)

Retirement Replaces Homeownership in the American Dream

© TheStreet
© TheStreet

Most people still believe they can achieve the American dream, even after slow employment growth following a harsh recession, but many now define it as having a comfortable retirement rather than owning a home.

About 96% of people responding to a Wells Fargo/Gallup poll conducted at the end of May cited a financially secure retirement as their version of the American dream. That’s an increase from 92% a year ago, and higher than the 93% of people who identified success as buying a home. The poll surveyed a mix of retired (28%) and non-retired (72%) adults with at least $10,000 in savings and investments. Forty-one percent of respondents reported an annual income of $90,000 or more.

The exact definition of the American dream has changed somewhat since the term was popularized in James Truslow Adams’ 1931 book The Epic of America. In it, he wrote: “The American Dream is that dream of a land in which life should be better and richer and fuller for everyone, with opportunity for each according to ability or achievement.”

Since then, social and economic mobility have generally been associated with such markers as owning a home, attaining higher education, and living as well as — if not better than — one’s parents. Specifying a comfortable retirement as part of that goal wasn’t necessary in previous years as many retirees were almost guaranteed one via their employer’s pension plans. As 401(k)s became more the more popular employer-sponsored retirement plan following the Revenue Act of 1978, workers increasingly found themselves on the hook for ensuring that they had enough money to last them through old age.

“There has been a rapid, systemic shift in risk and responsibility from the government to the individual in managing retirement,” said Andrew Eschtruth, an associate director at Boston College’s Center for Retirement Research. “Most individuals don’t yet fully grasp this change.”

In fact, data from the center pinpoints when that shift occurred. In 1983, of workers surveyed who had access to an employer-sponsored retirement plan, 62% were relying solely on a pension plan, 12% were relying on a 401(k) plan, and 26% were relying on a mix of the two. Less than ten years later, in 1992, workers were almost split in how they received their retirement benefits, with 44% citing a pension, 40% using a 401(k), and 16% relying on a mix. Today, 72% of employees rely on a 401(k), and only 17% rely on a pension.

While an encouraging 84% of respondents to Wells Fargo’s poll said they believe they can achieve the American Dream, only 69% of non-retired respondents said they have a specific plan to reach their retirement goals. And, of the respondents with a plan, only half of them have it in writing.

Of course, a plan is only good if followed, but having one in writing suggests that risks and other contingencies have at least been considered. Those who do not have a written plan say they haven’t had the time to create one (35%) or they haven’t given it much thought (26%). Even so, written plans are hardly foolproof. Only 37% of those with a written financial plan are highly confident that it will ensure they reach their goals.

“While the number of people with written plans is slowly trending higher, it’s still less than half of investors. It is critical to have a financial plan in place that spans life’s major milestones in order to reach your financial goals,” said Mary Mack, President of Wells Fargo Advisors.

Despite the seeming optimism Wells Fargo survey participants reported about achieving the American Dream, there are reasons to be less sanguine. The 401(k) generation is just starting to retire and data from the Boston College center suggests that they may not have saved enough. Of workers aged 55-64 with 401(k) accounts, the combined balance is just over $100,000, which only offers about $400 a month, according to Eschtruth. For most people, $400 a month combined with social security may still not be enough to support them through retirement.

Workers need to save more to meet the demands of increasing life expectancy and rising healthcare costs before retiring, Eschtruth said. Unfortunately, workers who are near retirement age have had to do the last years of their retirement saving in a low interest-rate environment in which yields on traditionally safer investments lagged normal inflation rates. Workers have had to save more or invest in traditionally riskier assets to make up for the shortfall.

“The problem with retirement is twofold,” Eschtruth said in an interview. “People need more and they expect less.”

Written by Carleton English of The Street

(Source: The Street)

Wealthier Boomers are Shunning Homeownership

© Victor J. Blue/Bloomberg
© Victor J. Blue/Bloomberg

The U.S. home ownership rate is at the lowest level in 25 years and is widely expected to go even lower. That’s not just the result of younger Americans struggling to make ends meet to save for a down payment on a home. It is increasingly the result of middle-aged, higher income Americans choosing to rent.

Renter growth is now at the highest level in 30 years, and families or married couples ages 45–64 accounted for about twice the share of renter growth as households under age 35, according to a new study by the Joint Center for Housing Studies at Harvard University. In addition, households in the top half of the income distribution, although generally more likely to own, contributed 43 percent of the growth in renters.

“We do think we’re in the later stages of a rebalancing between owning and renting,” Fannie Mae chief economist Doug Duncan said in an interview Wednesday on CNBC.

Duncan pointed to demographics. Baby boomers are now moving out of their homeownership years, while Generation X, a smaller group by 6 million to 7 million, also has a growing preference to rent after being hit hard during the recession, losing income, credit and even their homes.

The homeownership rate is now 63.7 percent, according to the U.S. Census, down from the over 69 percent peak in 2004.

Because of that, rental apartment occupancy is now at an all-time high, and rents are rising at twice the pace of inflation. In turn, that is putting pressure on renters young and old, but not necessarily pushing them to homeownership. Higher rents mean it is more difficult to save for a down payment. More than half of U.S. residents report having had to make at least one sacrifice or tradeoff in the past three years to cover their rent or mortgage, and the highest segment of those sacrificing is renters (73 percent), according to a report by the MacArthur Foundation.

Majorities of Americans continue to believe that it is challenging to find affordable rental housing in their own communities (58 percent in 2014 and 2015), and housing to purchase (60 percent in 2015, 59 percent in 2014), and even more challenging for families at the median income level (65 percent), young adults (80 percent), or families at the poverty level (89 percent), according to the MacArthur Foundation.

Apartment construction is booming, but much of it is in urban centers, catering to wealthier renters.

“It’s an older renter, looking to downsize that doesn’t want to own anymore,” said Douglas Firstenberg, principal of StonebridgeCarras, a real estate development and investment firm, standing outside one of its brand new rental buildings in downtown Bethesda, Maryland. Studios in the building start at $2,500 per month, and the most expensive unit is $6,000.

Rents are surging in the double digits for apartments and single-family rental homes. New apartment construction, now at the highest level since 1989, should ease the burden in coming years, adding supply to the demand, but it is not enough.

“While affordability for moderate income renters is hitting some cities and regions harder than others, an acute shortage of affordable housing for lowest-income renters is being felt everywhere,” said Chris Herbert, managing director of Harvard’s Joint Center for Housing Studies. “Between the record level of rent burdens and the plunging homeownership rate, there is a pressing need to prioritize the nation’s housing challenges in policy debates over the coming year if the country is to make progress toward the national goal of secure, decent and affordable housing for all.”

Written by Diana Olick of CNBC

(Source: CNBC)