Monday, September 29, 2014

October is National Adopt-a-Dog Month; so here are 25 facts about shelters, pet rescue, and the dogs we love!

You may not know that October is National Adopt-a-Dog Month, the American Humane Association’s push to promote awareness and adoption of our little four-legged furry friends. There are many benefits to dog ownership and adoption; to get more exercise, have a companion, to keep your home and children safer, and even assist those people with physical or emotional disabilities. But if you’ve ever owned a dog then you know, their heartwarming excitement and tail wagging when you come home from work is all the reason you need!

To help promote dog ownership and especially responsible adoption, we bring you 25 facts and figures for National Adopt- a-Dog month.

1. As of 2012, there are approximately 164 million household pets in the United States.

2. That number includes an estimated 83.3 million pet dogs.

3. That’s way up from the 1970’s, when there were only about 67 million household pets.

4. 62% of American households have at least one pet and 47% of households have at least one dog.

5. According to the American Pet Product Association, Americans spend $50 billion annually on their dogs, cats, and other household pets.

6. 70% of dog owners have one dog, 20% have two, and 10% of dog owners have three or more dogs.

7. 20-30% of dogs that are now household pets were adopted from animal shelters or rescues.

8. 83% of pet dogs are spayed or neutered, while only 10% of dogs received by shelters are spayed or neutered.

9. How much spaying or neutering cost? A lot less than raising a litter of puppies for a year! The average healthy dog has one litter a year with an average of four to six puppies.

10. Dog owners spend an average of $231 annually on routine veterinary visits.

11. The average cost a dog owner incurs for food, supplies, medical care and training is $400 to $700 annually.

12. According to a National Council on Pet Populations study, the number of dogs and cats euthanized in shelters every year has decreased, from about 12-20 million a year in the 1970s to about 3-4 million now.

13. That is still a huge number of dogs and cats euthanized every year, and an estimated 2.7 million healthy and adoptable shelter pets are not claimed each year.

14. There are about 13,600 community animal shelters in the United States, though they don’t operate under one governing body or national organization.

15. The terms, “human society,” and “SPCA” are generic, which means any independent shelter can use them in their names.

16. Each year, approximately 7.6 dogs and cats enter shelters.

17. About 35%, or 2.7 million are adopted. 26% are returned to their owners, and 31% of shelter dogs are euthanized.

18. 5 in 10 shelter dogs are euthanized because no one adopts them.

19. Homeless animals outnumber homeless people 5 to 1.

20. Many of the dogs that end up in community shelters are found and reclaimed by their owners, an estimated 30% in some areas! That adds up to about 542,000 happy stories of lost dogs reunited with their owners every year.

21. About 40% of new owners who adopt learn about their pet through word or mouth, according to the American Veterinary Medical Association.

22. How do pet owners find their dogs? According to the American Veterinary Medical Association:

40% of new owners learn about their pet through word or mouth,
28% purchase through a breeder, and
29% are adopted from a shelter.

23. Why do people abandon their dogs? According to the American Humane Association, the most common reasons are:

29% Their place of residence does not allow pets.
10% They don’t have enough time.
10% The dog’s owners died or got divorced.
10% The dog has behavioral issues.

24. Do you assume that animal shelters will only have mutts? In fact, 25% of adoptable dogs in shelters are purebred!

25. 65% of pet owners acquire their dogs for free or at a nominal cost.


**If you’re not convinced yet that dog adoption is a worthy and needed cause, spend an afternoon and take your family down to one of these local animal shelters to see what kinds of dogs are available for adoption. Chances are, you might just drive home with a new member of the family!

Wednesday, September 24, 2014

What's old is new; why farmland is the next great real estate investment.

Savvy investors are doubling down on an unexpected class of real estate that may just be the next big thing – farmland. While we’ve seen institutional investors, REITS, and builder’s focus on condominiums, shopping malls, and office spaces in the past, the winds of change have definitely shifted toward farmland and agricultural property.

While we may not think of owning vast tracks of tillable soil in the boonies as a sound investment, the facts paint quite the opposite picture. Since the end of World War II, farmland and agricultural land has risen steadily in value – even outpacing conventional home real estate – without the bubble-bursting downside. In fact, farmland has appreciated in value every year since WWII except for four – 1983, 1985, 1986, and 1987. According to the latest USDA figures, average Midwest farmland values have risen 128% over the past decade.

Why is dirt such a prolific appreciator? There are many benefits to owning rural or farmable agricultural property. But investors seem to be intrigued by hands-in-the-soil wisdom you might find in the Farmer’s Almanac; farm land is tangible, not some over-inflated balloon of tech concepts in Silicon Valley. You can walk the rows and touch the stalks. They aren’t making any more of it. And the population is growing – which means there’s an ever-increasing demand for food. 

According to the Food and Agriculture Organization of the United Nations, “the rise in local land prices has been fueled mainly by a worldwide agricultural commodity boom that has driven food prices up by more than 100 percent since 2003.” That’s a thirsty market for the most basic of necessities, and smart money wants in.

The farmland boom isn’t just in the United States – from Bulgaria to China to Africa (especially Africa,) huge institutional investors, sovereign wealth funds, and even the Mormon Church have been snatching up tillable acreage in the last few years with the ferocity of those betting on a sure thing.

The data confirms; farmland has outclassed the stock market since the late 1990s.  Iowa State University recently reported that someone who bought in 2000 and sold last year would have earned a 12.6 percent annualized return on his investment. While that’s remarkable in its own right, the lure of agricultural land goes further because it’s income-producing property.

Me, a farmer? But I kill all my houseplants, and I don’t even own a pair of overalls,” you may be saying right about now. Of course we don’t recommend moving out into the country and dropping your briefcase for a pitchfork. Instead, agricultural land can easily be leased out to a farmer who does know what he or she is doing. Once investors acquire the farmland, they rent it out to a tenant like any other income producing property, but this tenant plants soybeans or corn or wheat and split the profit with the landowner. In areas where large plots of agricultural land sit, there are plenty of farm-management companies who place landowners with eager farmers, based on the prevailing rent-to-value ratio of the land.

Thanks to the tornado of investors that have touched down in farmland, the amount of owner-operated farms in places like Iowa and the Midwest have dropped from 55% in 1982 to less than 40% in 2012.

What else makes agricultural land so attractive?

The sheer enormity of supply and demand based on our rising population is hard to ignore. Land is, of course, the definition of a fixed supply. A population in developing countries is expected to rise to 9 billion by 2050, up from our current 7 billion. Even in wealthy and developed countries like the U.S., higher demands for meat require more grazable acres and livestock grain supplies. Therefore, on a per capita basis, the amount of arable land available will decline over the next few decades, from 0.218 hectares per person today to 0.181 hectares per person in 2050.

But just like residential real estate, farmland allows leveraged buying; the bank is your partner. Your debt to income ratio will be lower than typical residential real estate, where you traditionally put 20% or less down, but farm owners and operators can also get loans for operational costs at low interest rates.

No different than the duplex you buy and rent out to tenants, your farmland can be leased to a professional farmer. But there are far more ways to generate revenue streams on agricultural land – including crops, livestock, hunting leases, recreational leases, marketable timber, water rights, or mineral rights.

Despite what you’ve seen in all the cliché farm movies, the government is actually your biggest ally when it comes to keeping your investment fertile. There are numerous of State and Federal programs to cost share, subsidize, and offer cash flow assistance to farmers. (Think about it – the government wants to incentivize food production and keep real consumer costs as low as possible.) They even have conservation programs for wildlife habitats or water filtration practices that could put cash in an owner’s ever-expanding wallet.

On top of all that, the demand for biofuels is skyrocketing. According to the Renewable Fuels Association, ethanol production now accounts for 23% of all corn crops in the U.S. That’s one of the reasons why corn prices have more than tripled between 2005 and 20012. So with farmland, you have an appreciating asset used to produce an appreciating asset.

Similarly, the tax benefits are profound. Mortgage interest for your farmland is deductible, but that’s just the start. Farm leases, improvements, planting costs, and equipment purchases are all tax-beneficial, and farmland  - as a class of commercial property – is eligible for 1031 exchanges, where it can be sold and exchanged for like-kind property without capital gains tax hits.

Investors also love the fact that farmland is a fantastic asset to diversify their portfolio. In fact, agricultural income-producing land is negatively correlated with assets like stocks and bonds and even run on different tracks than residential income properties, which means farmland is a major hedge against rising inflation.

Of course there are concerns and drawbacks. For instance, farmland is extremely illiquid, so an investor should plan for the long term when formulating an exit strategy. Value of the land and income is also volatile in the short term, as it’s tied to crops that can be affected by draughts, floods, climate, insect infestation, disease, consumer trends, and global-macro events.

The good news is that we’re not just taking about hundreds of acres in places like Kansas, where the downside is that…well, that you’d have to live in Kansas. Virtually every state has agricultural and farmland available, based on localized crops. Napa Valley’s grape production is a good example of that, as well as the various orchards, ranches, and dairy farms in Northern California. 

Contact us to find out more about available farmland in your area!

Monday, September 22, 2014

10 Things every homeowner should know about their roof.

1. How can you tell if it’s time for a new roof?
There are three ways you’ll be alerted to the fact that your roof needs replacement. The first two are the most innocuous – you’ll either see loose or missing shingles on the roof, or you’ll see other homeowners in your neighborhood, with homes built the same age, start replacing their roofs. The third option is the least desirable – your existing roof is leaking. If that’s the case, you’ll probably see brown spots on the ceiling or walls or it smells wet or damp along interior walls. Those are sure-fire signs of water damage, which is probably coming from your roof (unless it’s a plumbing leak.) Be sure to proactively investigate and fix the problem because water damage from a leaky roof can cause serious (and extremely expensive) damage to your home’s structure or even dangerous mold.

2. Permits?
Most local ordinances require you to pull a permit before you replace your roof. If you’re hiring a licensed roofing contractor, they’ll be able to advise you on local regulations and even obtain the permit for you before they start the job.

3. Shingling over your existing roof or ripping it off.
Sometimes, you have to tear off the initial shingles and roofing materials before you install a new roof. But it may be possible to re-shingle right over the existing roof. This saves you money but there are drawbacks; if you have defects in the old roof, they still need to be addressed before you cover them with nee shingles. You may still have condensation or ventilation issues that are masked when you put on a new roof, but not fixed. When you tear off your old roofing you get to thoroughly examine the condition of the wood deck underneath, as well as lay a new underlayment, which helps protect against water damage. Most municipal codes only allow a certain number of re-roofs before you have to rip it out and start clean, typically three.

4. Underneath your roof.
Under your finished roof lies a protective layer called the underlayment, or roofing felt. Its purpose is to add an additional layer of moisture between your roof deck and your shingles. This is very important in area where extreme cold temperatures and snow and ice can cause ice damns underneath the roof. Beneath the roofing felt is a “deck” of plywood sheathing, which is attached to the rafters underneath.

5. Ventilation.
Many homeowners don’t realize that a house’s roof and structure are not a “closed system,” but actually requires proper ventilation to allow it to “breathe” and dry out. Efficient ventilation will reduce attic heat, reduce attic moisture and condensation, and prevent weather infiltration. A roofing contractor will be able to inspect your current ventilation and advise you on best options, including building codes in your area.

6. Roofing penetrations.
Penetrations are the area where there are intrusion points through the roof. It may seem like a roof is one continuous plane, but in fact there are pipes, vents, chimneys, antennas, and skylights that breach the roof. It’s so important to have the right specialty flashing and proper instillation techniques to keep your penetration points weatherproof. The best roof in the world will do you no good if water still gets in!

7. Rafters.
Likewise, rafters are areas of the roof where two separate angles intersect and need to be laid out and sealed correctly. Usually a trough forms at this intersections, where debris and water can collect and sit, so it’s important there is proper angled drainage and a tight seal.

8. Pitch.
When choosing a roofing product, it’s also important to identify your roof’s pitch. The most common roof pitches are A-frame roofs (traditionally found in cottages,) gable roofs, hip roofs, shed roofs, and flat roofs. 

9. Slope.
Each roof has it’s own slope, or steepness (rise vs. run,) that makes different types of roofing materials a better choice. For instance, a roof slope below 2/12 (2 inches per one foot) cannot use shingles. But roof slopes between 2/12 and 4/12 (flatter roofs) require specific low-slope application techniques, including application of waterproofing underlayment. While roof slopes above 21/12 require steep-slope application techniques to install it correctly.

10. Types of roofing.

Metal roofing.
You find this usually on homes with flat rooflines or very steep rooflines. Metal roofs are particularly practical on homes in cold climates, where snow will slide off the metal grooved channels instead of sitting and accumulating, where weight, ice damns, and water when it melts can cause serious damage. Some luxury homes even have copper roofs. Metal roofs usually last up to 50 years.

Tile shingles.
Tiles shingles are extremely strong and durable, lasting up to 80 years. They’re usually found on Mediterranean or Spanish-style homes. However, it takes a very good roofing contractor to know how to install a tile roof correctly, and the cost will be much higher.

Wood shingles.
Also called, “shake” roofing, for a period around the early 1980’s, wood shingles were very popular among builders, and considered a high-end look. But they served to be impractical, susceptible to drying, cracking, and leakage. Most people have to replace their wood shingle roof after about 20 years, and choose a new material. However there are some areas where they still use good quality wood shingles – made out of redwood, not cheaper cedar.

Asphalt shingles.

Asphalt shingles are the most common type of roofing material. They come in many different colors and qualities vary. It’s important to do a little research and ask your roofing contractor for a recommendation, because some shingles are better than others and often they come with energy rebates. But be careful when it comes to believing audacious claims about warranties – the fine print usually disqualifies homeowners from ever collecting a dime in 99% of cases. A good asphalt shingle should last you 20-30 years.

Wednesday, September 17, 2014

15 Inside tips to help you win the airline frequent flyer game. (Part 1)

Every year in the United States, an estimated 600-700 million passengers board flights headed for domestic destinations, and tens of millions more fly overseas. If you’re one of those people who fly at least a few times per year – whether it’s for business or a vacation with the family – you may have wondered if it’s worth it to join an airline's frequent flyer programs. Or maybe you’ve already signed up, but if you’re like most airline passengers, chances are you often forget to register and manage all of your flights, losing out on award miles. In fact, the airlines carefully formulate their frequent flyer and award miles programs to garner loyalty and maximize profits – by counting heavily on people who don't use their miles correctly.

At any give time, there are about 9.7 trillion unredeemed airline miles in frequent flyer accounts. How can we put that number in perspective? The airlines factor the value of each airline mile at around 1.5 cents, so we’re looking at about $145.5 billion just in unredeemed miles. Considering the average business or first-class ticket costs 150,000 in frequent flyer miles and we can calculate that 64.7 million flights are left unredeemed. If one lucky person could take advantage of all those airline miles, they’d earn enough tickets to circumnavigate the earth 449 million times! Even crazier, that same person could go to the moon 19.4 million times if airplanes flew there, (they don’t - yet!)

While you may not have plans to circumnavigate the globe or fly to the moon, we'll show you 15 inside tips how to use frequent flyer programs to your advantage so you can at least earn a few free flights here and there.

1. Confirm.
When you first check in at the airport, ask the attendant to confirm your miles have been registered with your frequent flyer account. Make sure they get both legs of the flight.

2. Check up.
Don’t just take their word for it, check in periodically on the airline’s website to make sure your miles have been logged. If you don’t see them posted after 90 days of flying, contact the airlines.

3. Save your paperwork.
Save all ticketing receipts and boarding passes until you see those miles posted. Without them, you might not be able to prove you earned the miles.

4. Check networks.
When you fly with an airline and try to accumulate award miles, ask if they are part of a network, like OneWorld, Star Alliance, and Star. Some times, you can acquire or use your miles within the same network, not just with one airline.

5. Don’t let them expire.
Most people don’t realize that accrued airline miles can expire, rendering them useless! Read the fine print and ask questions when you sign up to learn their policies. However, they change policies all the time, so if you’re about to lose miles, a great trick is to make a purchase with an affiliated partner, which “reinstates” your miles. It doesn’t even have to be a big purchase – a simple magazine subscription may extend the use of your miles for up to 18 months.

6. Understand award availability.
A common consumer misconception is that getting an award ticket with frequent flyer miles is as easy as booking any ticket – you just make your choice of dates and flights. But the airlines offer a very small segment of seats on each flight for awards travel. With 80% of flights totally full year around, it’s often difficult to even book your seat.

7. Call instead of going online to redeem.
For that reason, it’s usually more efficient to call the airline’s reservation center to book your award tickets instead of trying to go through their website. Booking via the phone will probably cost you $25, but it will be well worth it, as a real live human being will do the hard work of looking through all the dates, flights, and options to get you a seat.

8. Earn award miles through your credit card.
The single best way to accrue frequent flyer miles is to apply for a credit card that offers bonus miles for new customers. It’s easy to find them – there are plenty of websites to guide you through the best credit cards for airline miles, and the airlines even promote offers right on the plane. Typically, a credit card offers 30,000-40,000 award miles upon signing up. I’ve heard of shrewd consumers signing up with as many cards as possible, getting the miles, and then cancelling their cards – though I wouldn’t recommend it because I can’t imagine that’s good for your credit!

Of course, read the fine print with credit cards because some of them have high annual fees or restrictions. You’ll have to weight the upside of using a card that earns you miles with just one airline, versus some of the cards – like Chase Sapphire – that build up miles you can use to book a ticket with just about any airline.

Here is a great impartial website that ranks the best credit cards for getting bonus airline miles. 


Look for part 2 of this blog soon, with 7 more inside secrets to winning the airline frequent flyer game and the best and worst airlines for award miles. 

Monday, September 15, 2014

Which is the better investment, real estate or stocks?

Is it better to invest in the stock market or buy real estate?

That's the century-old debate, rekindled every time we have a Bull or a Bear market, a boom or a bust. There are plenty of fancy charts and statistics to support both arguments but in essence, there is no once correct answer. I know, someone who's made their career as a real estate broker should probably sing the praises of owning a home as the one and only investment you should ever make. And for many people, it is. Even 94% of millionaires cite real estate as a significant part of how they obtained and held their wealth.

However, so much of the data used to make these arguments and foster comparison is situational, and therefore a case can be made for either/or. For instance, are we talking about residential real estate or rental properties? Are we mistakenly only counting home price appreciation? And is there a mortgage involved, or are we assuming the house is owned outright? With our stock investments, will we be reinvesting the dividends? Are we trading stocks ourselves or enlisting a financial planner? What’s our risk tolerance and tax position? All of these things factor in to the argument, but at the risk of letting the air out of the balloon well before the party has started, I’ll give you the answer we’ll arrive at by the end of this blog. The average earnings over time for real estate and stocks pretty much mirror each other, an ideally you should invest in both

First, for the sake of defining and clarifying these two different classes of investments, let me present each of their inherent advantages and disadvantages. Then, I will propose some widely accepted statistics for purposes of comparison.

Investing in stocks.


It’s very easy to sell off your whole position in stocks, almost instantaneously.

Low acquisition costs.
Anyone can invest in stocks because they have such a small acquisition price – you can buy just one share if you wish. There are fees involved but they are not prohibitive.

Easy to diversify.
By investing in mutual funds or other vehicles, you can diversity your stock holdings over different classes of stocks. You can also mirror the S &P 500 or buy only blue chips to minimize risk and foster stability.

Low management.
Once you buy your stocks, you can choose to hold them without additional cost or maintenance. There is no additional time or money investment if you don’t want.

Reinvesting dividends.
This is the big advantage to investing in stocks, as you can choose to cash out your dividends or reinvest them. By reinvesting, or buying more of the same stock, you speed up the curve of your investment and take advantage of the principle of compounding.

Some tax advantages.
Depending on your financial situation, stock capital gains offer may offer some tax advantages. Additionally, IRAs, 401ks, etc. can also help reduce the tax load on stock holdings.


Human error.
Investing in stocks is more are subject to fear, groupthink, fickle emotions, and human error – not to mention greed and fraud.

No Control.
As a stockholder, there is nothing immediate and direct you can do to improve the company or even help them make good decisions, other than possibly voting for the Board.

Short-term fluctuations.
Stocks are subject to extreme short-term volatility.

Investing in Real Estate.


The huge advantage to owning real estate is that you can leverage other people’s money – i.e., the bank’s – to acquire an asset. For instance, you may only have to put 20% or even 10% or less of your own money down to acquire a whole asset. Yes, you have to pay interest for the privilege of using the bank’s money (a mortgage) but you still benefit when it appreciates or cash flows.

You can decide where you want to buy real estate and actively improve your own property to increase its value. You can do maintenance, redecorate, improve your landscaping, or even add an addition on your own time and dime, all of which adds value.

Paying it off.
Even if you use a mortgage (most people do) to acquire your real estate, you can pay it off to reach the point where you own the asset outright. In fact, you can accelerate payments much faster if you wish, by adding extra towards principal or just paying the whole thing off earlier if desired. 

Tax benefits.
The government doesn’t want to be in the business of housing 300 million Americans so it long ago made the decision to offer huge tax advantages to promote home ownership and investment. Owning a home will allow you to get mortgage interest write offs: you can deduct the interest on up to $1.1 million in mortgage indebtedness on your primary home, you can also sell your primary home for tax free profits up to $250,000 for singles and $500,000 for married couples if you live in the home for the last two of a five year period. And if you own rentals, all expenses associated with managing your rental properties are also deductible towards your income.

Real estate is local.
If you own a home in California, so what if the real estate market crashes overseas, or even if homes are loosing value in Detroit? It doesn’t affect your investment at all. In fact, real estate has regional, local, and even micro markets that are largely independent. So by purchasing a good house in a good neighborhood, you’re ensuring your investment.

You have to live somewhere!
I come across many articles and blogs about investing in real estate v. stocks, written by brilliant economists and analysts. But the one thing they’re often missing in the debate is a tangible reality for everyone: you have to live somewhere. That means that if you don’t purchase your own real estate to live in, you’ll have to rent. So unless we’re talking about buying rental properties or commercial real estate, there’s an opportunity cost if you don’t buy real estate and have to rent to live.


Not liquid.
Selling real estate is not fast nor easy compared to selling stocks, which you can unload at any time.

Owning real estate requires maintenance and physical upkeep, which takes time and money.

Acquisition and surrender costs.
There are costs incurred when you sell a property and closing costs and often fees related to your mortgage.  


So now that we’ve outlined the pros and cons of real estate and stocks, what’s our final answer to the question, which is better? 

Like I mentioned, there are many studies that analyze gains in the stock market versus real estate. Most all of them are situational, so don’t apply to everyone. Some forget to factor in dividends, others don’t account for the tax implications, and even more don’t account for rental income – or the opportunity cost of having to rent - just appreciation.

But by far the best study I’ve found is an analysis of economist Robert Shiller’s theories and research that led to his widely accepted historical housing index. If we use Shiller’s indices for real estate and Dow Jones stock market gains and put them head to head, we’re offered a snapshot that speaks to the general trend; real estate and stocks generally mirror each other over the long term and both yield approximately similar gains as investments. So the real question becomes not, “Should you buy a home or buy stocks?” but “Which is right for you based on your life circumstances and financial situation?” One thing we can be certain of is that for the average person, a balanced and prudent financial future includes both.