Buy Your Dream Home With No Money Down.

Q&A with Kassie Welch, Mortgage Financial Consultant

On Wednesday, July 6^th, 2005, Kassie Welch, an 18-year veteran of the real estate industry, answered the questions of NataliePace.com subscribers, giving advice on many matters, including how to buy a home with NO MONEY DOWN, creative ideas when you think you can't afford anything and how to what to do with a trailer home on PCH that no bank will finance!

NataliePace.com: Is it better to pay off your mortgage as quickly as possible?
I don't believe that it's always best to pay off your house. Many people who do that end up being house rich and cash poor.

So, how do you choose between the many options that are out there for payment options?
You first decide how long you will realistically be in your home, how much risk you're willing to take and then choose the length of mortgage that best meets your needs. As far as making additional principal reductions, I honestly feel that having other investments, ones that are more liquid as well as diversified, is a better choice.

I don't really trust the stock market, after 2000, and believe it or not, even my bonds gave me trouble last yearÉ
That's when having a financial advisor is priceless. I am not licensed/equipped to give other financial advice as to specific investments. As a Mortgage Financial Consultant, I assist people in the best financing option for their home.

I'm new to this, but I've heard that you don't have to have a big down payment anymore. Is that true?
Down payments are not necessary any longer to purchase a home. It is not uncommon for someone to buy with 100%, even 103% to cover closing costs or 107% financing to cover closing costs as well as pay down/off debt.

Oh! So what's the catch? Does my credit have to be impeccable and my job pretty high paying?
There's really no catch. Many lenders make 100% financing loans with interest rates that aren't much higher than traditional financing, if you have good credit and a steady work history. And there are even stated income/stated asset 100% financing loans too, however those rates tend to be pricey to compensate for the risk the lender is taking.

What's a "stated income/stated asset loan?" Is that one of those "liar's" loans that I've been hearing about all over the news?
A stated income/stated asset loan means that the borrower did not provide any proof of income or asset verification. Basically the lending institution is making a loan based upon on the borrower's word. Obviously these loans are riskier, which is why they're more expensive. However, for some people, particularly those who are self-employed, running a cash business, etc. it's the only way they can qualify.

That sounds incredible. Almost too good to be trueÉ
Many people choose 100% financing, even with higher rates, to get started in the market. If they wait until they save for a down payment, oftentimes the market outpaces them, which means they can't save as fast as the market increases. 100% financing is a great way to leverage one's good income and credit. While a home is an excellent investment, it's important to really want to own one too.

Can you give me an idea of how expensive a place I can afford with $5,000 monthly take home?
Qualifying for a home is based on gross income. Most lenders will allow you to borrow between 40-50% of your gross monthly income for all debts. This includes your principal, interest, taxes and insurance on your home as well as other debts, installment loans, credit cards, etc. Also, loan amounts and pricing are based off your FICO scores, so it's difficult to give you off the cuff numbers that would be accurate.

I'd just like an idea of how much house I can get with $7500 grossÉ Ballpark.
To really give you a quote, I need to know how much debt you have, what the payments are, as well as your FICO score, or at least a ballpark idea. $7500 a month translates into $3000 to $3750 a month of total obligations. From this number, you deduct your monthly debt payments. Then you have an idea of what you can pay for housing.

I've paid off most of my debts. I have a student loan with about $1200, an American Express that I pay off monthly and two VISAs (one business and one personal). The monthly payments add up to about $500. I have a car payment at $400/month. FICO is not good, from the unemployment period that I went through a year and a half ago, though all of the past debt has been paid off.
Good job in paying off most of your debt. That's wonderful and something to be very proud of. It sounds like your student loan may have less than 7 payments. If that's the case, this debt and any other installment with less than 7 payments, are not counted in your debt-to-income ratio.

Without the student loan, I just have the AMEX and the VISA, with the other VISA being business. Does that hurt? I do have the car loan.
As for the AMEX and the VISA accounts paid off monthly, a lender will still count them into your ratios. You may want to stop using those accounts a few months before you want to purchase so those minimum payments aren't factored into what you can afford. The car loan must be deducted from thee $3,000-$3750. Again, that's the total amount a lender wants you to be obligated, 40-50%.

So, my gross is $7500. My net is $5000. I have about $1000 in debt. Then there are the monthly incidentals - cable, phone, insurance - I really have no clue if I need to look at a $500,000 condo or if I can look at a million dollar home, and rent out the room to a roommate.
If we deduct the $900, you can afford a housing payment between $2100-$2850. The next question I'd ask is how long do you plan on being in the property? If you want a 30-year fixed loan, you won't qualify for much since the interest rate is highest. Also, are you willing to go with an interest only loan?

I'd feel better with a fixed, given that interest rates seem to be rising. What do you recommend?
A $500, 000 condo will cost you at least $2500 for just the loan and will not include taxes (1.25% of the purchase price) and/or insurance (.0035% of the loan amount) or Home Owner's Association dues.

Yikes! It doesn't look like I'll be able to afford ANYTHING! I live in a rent-controlled place in West LA. I haven't even seen a condo on the Westside for under $500,000 that didn't look like a tenement.
You may want to consider buying a duplex with a friend. Leverage both of your income to get something a bit nicer. I would also suggest that you look at a shorter-term fixed rate mortgage, a hybrid, which is fixed for 3, 5, 7, or 10 years before adjusting, assuming that your income will more than likely increase and/or you will be in your home for less than 30 years. Just so you know, in Los Angeles County most stay in their first home for an average of 5 ý years. So having a 30-year fixed mortgage is often unnecessary.

Real estate market. Boom or bust?
It really depends on the housing market. In high-density areas, like Manhattan and Los Angeles, homeowners are less vulnerable. It would take quite a lot of distress sales or foreclosures to lower the overall market.

Yes, but with so many people using aggressive loans, like interest only and variable, and interest rates rising and high gas prices and inflation in other areas (medical care), isn't it likely that a whole group of people might feel the pinch simultaneously? If a lot of homes are on the market, and the market is flooded, and the bank lending policies tighten up (due to more late pays and foreclosures), isn't it conceivable that even high-density areas could be affected dramatically? Also, we haven't addressed the fact of natural disaster. I lost my home in Florida. That takes the value down to land only in a matter of seconds, and what most people don't realize is that the insurance companies don't insure against hurricanes in hurricane zones.
There is some speculation that in 2007 and again in 2009 we may see some distress sales. In 2007, many 3-year fixed and, in 2009, many 5-year fixed interest only loans will begin to mature resulting in fully amortized payments as well as potential interest rate increases. For those who overestimated their future income, they may have trouble making the new payments, which could lead to distress sales. It does, however, take quite a few distress sales to affect an entire market, especially in high-density areas. Many regulatory agencies are concerned and are encouraging lenders to tighten their policies as a result.

As for natural disasters, they can have an adverse affect on property values. The riot in Los Angeles and then major earthquake a few years later had a dramatic impact on housing. (The attached appreciation chart shows prices that cover that time period.) Many people now carry earthquake insurance as a result, which will hopefully protect such an impact in the future. Owning a home does have a risk, but life is full of risk as well. That's why I truly believe wanting to be a homeowner is important, as well as viewing your home as an investment.

 Historical Median Home Sales Prices in Los Angeles, California, 1982-2004

Source: California Association of Realtors®, http://www.car.org

I have a unique problem. I own a trailer on the Pacific Coast Highway. I bought it at $120,000 and the one next door just sold for $350,000. I'd like to pull some money out to put in a new mobile home, but I can't find a bank to finance it. I mean the lot and the location are prime, with a great full view of the Pacific Ocean, but the trailer is a real junker.
I've never had any success finding mobile home financing regardless of the age of the trailer. Everyone I know who has ever owned a mobile home had trouble selling it, and many times ended up carrying paper to do so.

I had a feeling you'd say that. Do I have any options?
I wish I had some advice for you, but I honestly don't. I've even done Internet searches to try and help out one client, but was never able to find financing. Your best bet would be to find someone to make a private loan to you. They may be interested in loaning you money against your trailer if you pay a higher return on the money than a bank or other investments.

The Pacific Coast Highway is a unique locale, very different from most mobile home living. What does it mean to "carry papers?"
Carrying paper means that when someone sells a property, they make a new loan to the buyer. For example, they would give you $175,000 (as I recall, that's what you owe) or more and then you would make a mortgage for the purchase price difference. Then you would be repaid in monthly installments based on the agreement you made.

So I could sell my home and buy something else as an option?
Yes.

Kassie, I noticed that you mentioned a lot about paying off debt in your article. My question is - and this is for a friend - what if you have been buried by your debts, and you are just now in a position to start paying them off? Do you pay off everything and try to get the record clean, or do you establish a payment plan with the companies? This person had all of this go to collection. He had an extended period of unemployment, when technology busted.
I recommend that people do some reading up on credit before doing anything. FICO scores aren't so cut and dry, so paying everything off may not have the positive effect your friend is hoping for. I'd have to review your friend's credit report to give specific advise as to raising their FICO score.

You don't have to have a perfect FICO score to buy a house. It may cost you a little more. The important thing is that all payments are made on time. Then your friend can review his credit and determine the best way to pay things down or off. Obviously higher interest rate accounts are the best targets. Also, FICO scores are affected by debt distribution. For example, its better having two $5,000 credit cards, than one maxed out at $10,000.

Join Kassie Welch in the NataliePace.com chat room on Wednesday, August 17^th at 8:45 a.m. PST. Find out how you can become a homeowner with no money down! It's never been easier to own your own place than it is now. (Subscribers only.)

Kassie Welch is a Mortgage Financial Consultant with United Pacific Mortgage and a lecturer on First Time Home Buying and 100% financing. Kassie, an eighteen-year veteran of the real estate finance industry, will be having a First Time Home Buyer seminar in Los Angeles, California, on Saturday, September 10th.  Contact Ms. Welch if you'd like to receive her monthly newsletter and for more information on upcoming seminars at www.dreamhomeownership.com.

The Eastern European Renaissance.

By Natalie Pace

Article and Stock Report Card

The Castle in Bratislava, Slovakia ---- Photo credit: European Commission ---- Click for more photos of Slovakia

We hear a lot about China, but who knew that Egypt was the hottest equity market in 2004? (See Exhibit 1 below). What you'll also notice about this chart is that there is a lot of action going on in Eastern Europe.

Exhibit 1: World Equity Markets Returns in 2004
(Source: The Milken Institute)

When markets heat up that's when you just want to be there.

There's a joke (true) that you could have thrown a dart at a wall full of stocks in 1999 and made money. That was pretty much the case in 2002 for Chinese stocks (particularly those traded on the Hong Kong, Singapore and Taiwan stock exchange). This year's Cinderella story may well emerge from the war-torn region of 1990's headlines - Eastern Europe.

When a country, region or sector heats up, it's like soaking up the sun on a Hawaiian beach. If you want a tan, all you have to do is fly there and walk outside. With that in mind, NataliePace.com is paying particular attention to the region of the world that was mentioned time and again with affection at the Milken Economic Global Conference - Eastern Europe. It's a fairly new investment vehicle, with infrastructure and rebuilding after the Bosnian War really kicking in now. But the sunny seaside of Croatia is just as sought after in Europe, as California is here in the states, and the Eastern European pro-growth initiatives are attracting corporate capital, manufacturing and offices to their shores.

The production line for Volkswagen Polo cars at Volkswagen Slovakia Photo credit: European Commission Click for more photos of Slovakia

With the Bosnian War behind them, there's a lot to love about this wonderful region that is rebuilding with pro-growth, state of the art, paperless, flat tax governments. Companies are attracted to well-educated employees with a strong work ethic, who are available at a bargain by Western European standards. Eastern Europe, in economist Marc Miles' words, "has been to the abyss." They have nowhere to go, barring another horrific war, but up.

Investors, who like first-mover advantage, might start with a few funds that are focused on Eastern Europe. There aren't many, and it is important to look at the holdings and distribution by country to ensure that you aren't ending up in the stagnant regions of Western Europe, particularly France and Germany. All Europe is not created equal these days!

Rest assured that NataliePace.com is not content with just these funds, and will be turning over a few more ideas in future ezines. But, we were surprised to see the growth, management, transparency, disclosure and professionalism of two funds listed in the Report Card below - namely Vanguard's EUROX and T. Rowe Price's TREMX and have added them to our list of Hot Stocks.

While the respected economist Marc Miles (see his Q&A in this month's ezine), would focus on Slovakia, Estonia and Slovenia and stay away from Russia, it's difficult finding a fund that excludes Eastern Europe's most famous country. That may change as the popularity of this developing region starts commanding more headlines. What's the harm of getting in early at a reasonable price? Consider carefully and be conservative with any investment in Russia, particularly now in a time that has generously been called "restructuring," and aggressively been named "lawless." For more information on this region and more, read "Eastern Europe Rocks, Western Europe Stumbles, China Moves To Hong Kong, While the U.S. Stares Into the Abyss. 101 Things You Need To Know About Investing in all 4 Global Hot Spots."

For more information on these and other stocks, go to www.NataliePace.com. Enter the symbol or the name of the company in the Research Now box.

Eastern Europe Rocks, Western Europe Stumbles, China Moves To Hong Kong, While the U.S. Stares Into the Abyss.

By Natalie Pace, CEO and founder, NataliePace.com

101 Things You Need To Know About Investing in all 4 Global Hot Spots. Q&A with Marc A. Miles, Ph.D., the Director of the Center for International Trade and Economics at The Heritage Foundation, with a decidedly bearish outlook on the U.S. economy.

Marc A Miles, Ph.D.

At the Milken Institute's Global Conference in April, economists were still sour on Western European countries, but clearly excited about the potential of Eastern Europe. What countries interest you most right now?
I'm looking at the globe, at 161 countries; we evaluate them on the degree to which their markets are open, free of barriers. We measure the degree to which the people are able to pursue their dreams. I'm less interested in countries where governments put up road blocks, where you don't have property rights, where inflation or tax rates are high, or there are ten levels of permits to attain before you can start a business. Those are barriers to pursuing your dreams. The big story right now is Eastern Europe.

What sets Eastern Europe apart from the other 161 countries?
They have gone to edge of the big government, highly regulated abyss and looked down. They didn't like what they saw. They are moving very quickly in the opposite direction. We continue to move slowly towards the abyss, while they are moving in the other direction.

That's a bold statement. Before we examine how the U.S. is doing, tell us what Eastern Europe is doing right economically speaking.
They are privatizing social security in countries like Slovakia and Bulgaria. There is a revolution going on in terms of taxes. In this country, we talk about simplifying taxes and making it fairer and easier to fill out. They're not talking. They are doing. Slovakia has a 19% flat tax, down from 38%. In fact, there is competition among the Eastern European countries as to who can have the lowest flat tax.

So simplifying taxes is very pro-growth. What else is stimulating the economies there?
There are other interesting things. Estonia is becoming the first paperless government. You don't have to go to a government office to fill out forms. Anything you need, you just go to the Internet and fill it out. In these countries, you fill out your income tax in five minutes.

Before we all rush to move there, how is the computer penetration rate? Are there enough computers for the people, and are we talking waiting twenty minutes for the dial-up connection to go through, or does the country have high-speed connections?
In all of these countries, they have personal computers. I was in Bulgaria and Slovakia a few months ago. The hotels have high-speed Internet connections. Everyone has PCs. They are plugged into the world.

Insert photo of the A street vendor has a conversation on a mobile phone.. (it is located in the second row, left hand side.)

A street vendo has a conversation on a mobile phone in Bratislava, Slovakia. Photo credit: European Commission Click for more photos of Slovakia.

Isn't that pretty costly infrastructure, especially for countries that are rebuilding after a long period of war and destruction?
Part of the reason there is investment in capital equipment is that they have inflation under control. Bulgaria is not a member of the European Union, but it has a currency board that pegs its currency to the Euro. So does Slovakia. That has gotten rid of inflation and makes capital investment much more attractive.

What industries are alive in Eastern Europe?
Eastern Europe is attracting investment away from Western European countries. There are workers in West Germany who have given up their 35-hour work week in order to keep their employers from moving to Slovakia. You have people with a reasonable level of education in Eastern Europe who will work for lower wages.

According to the Milken Institute, Estonia has 31% of its labor force with tertiary education (post-graduate degrees), while Slovenia and Croatia have 17%. Those are not bad statistics.
And the current and expected future tax rates are more favorable, while regulation is less. This is creating competition with the Western European countries. Germany, for a period, looked like it was going to respond to that competition. Chancellor Gerhard Schröder proposed cutting corporate tax rates to 19%, from 26%, but that fell apart when it became clear that the ruling party in Germany was not going to win the elections.

He's getting a run for leadership from the conservative challenger Angela MerkelÉ
But will she carry through on that tax rate cut? Eastern Europe is creating a whole new set of forces and competition in the world. A lot of people are unaware of what's happening. I go to Central America and South America and they are still raising their tax rates. That's swimming upstream again the global trend that is going the other way. You are making yourself uncompetitive. Western Europe is feeling the pinch, as is the U.S. I think it will have a profound effect, not only throughout Europe, but also in the West.

So, why couldn't Chancellor Schröder effect change, even in the tax structure? You'd think going from 26% to 19% corporate taxes would be a popular notion.
The remnants of the failed 20^th Century idealism remain a formidable force. When I was in France, the people there were talking about how the European Constitution has been defeated, and also talking about how change does not occur through an election or some easy, simple way. It has always occurred through Revolution, and they are afraid that right now they may be on the verge of some sort of revolution. They are not sure what it is. My guess is that it is going to be an economic revolution, where they realize they are not the leaders in Europe anymore. Their 35-hour work week is not where the future is in Europe. They will have to start moving in the other direction.

Longer work hours are probably difficult to get staff to buy, just as cutting back on salaries, pension plans and health care has been a problem for the ailing auto and airline industries here in the U.S. You've mentioned Slovakia, Estonia and Bulgaria, but most of the Eastern European mutual and index funds are heavily invested in Russia.
One thing I would caution is to be careful which country you are investing in. You need to look for the level of corruption in the country. Corruption is another form of taxation that raises the cost of doing business. It's usually a sign of poor property rights, among other things. I wouldn't invest blindly in Eastern Europe. I would be reluctant to invest in Russia. Even though Russia has adopted a 13% flat tax, there's just an era of lawlessness going on there. I would be reluctant to put my capital there. I wouldn't be sure that I could keep it and get a fair return.

China was the Cinderella story of the past five years. Do you find China to be as attractive in 2005 as it was in 2002?
There's certainly a lack of respect for intellectual property rights in China. Warner Brothers tried releasing the DVD of The Sisterhood of the Traveling Pants in China the same day it was being released in the U.S. in order to try and head off the sales of pirated copies of the DVD. It's not a perfect solution. I'm actually quite bullish for China. If you look at the Southern provinces, there is a lot of wealth being created. A year ago, the Chinese put a phrase about property rights into their constitution, which is quite a remarkable thing for a communist government. We don't know how it will be enforced. I just note that it is a leap. I think that's where China is trying to go.

So the explosive growth we've seen, in Gross Domestic Product, in the cities, in modernization, can continue apace?
When China took over Hong Kong in 1997, they talked about one country one system within 50 years. I wondered, as an economist, whether they were going to be more like Hong Kong or mainland. We already have the answer. The mainland is becoming more and more like Hong Kong. It may not take 50 years.

Let's head back to your statement that the U.S. is headed toward the abyss. At 10,651.18 (on 7.22.05), the Dow is just 1,600 points off of its historic high of 11,722, set on January 14, 2000. Investors are reasonably confident in the markets these days. On the other hand, statistics would indicate that we are living on borrowed time, literally. Slovenia and Slovakia have bank assets running at 80% and 75% of GDP, with no domestic debt, while the U.S.'s domestic debt is at 160% GDP. The U.S. equity market capitalization is at 130% GDP, while Slovenia's is 25% and Slovakia's is 10%. (Source: The Milken Institute)
One point is to look at the real purchasing power of the Dow. The last time the Dow was at that historic high, the dollar was worth much more in terms of purchasing power. So be careful about simply looking at the nominal number.

Moreover, part of the problem in the U.S. is that we are increasing regulation so much that we are forcing equity offshore. Look at Sarbanes-Oxley. Sarbanes-Oxley was quickly pushed through Congress after Enron, but everything that occurred at Enron was covered by the existing law. What the Enron executives did was illegal, and they are being prosecuted under laws that were existing at that time.

The argument was that Sarbanes-Oxley would PREVENT Enron from occurring again.
What they created was this huge oversight system that is making auditors extremely rich, and putting artificial barriers within firms. Whenever we create restrictions of that type, we raise the cost of doing business. Anything that raises the cost of doing business, reduces the amount of business. How about the recent Supreme Court ruling about property rights? Can you believe that? Everybody is aghast. They can take my house because they want to build a shopping center. Someone today might think twice about buying waterfront property, even though it's one of the fastest growing areas. There would certainly be incentive for the government to take waterfront property from households and turn it into a waterfront development. In fact I hear that is already happening in Florida.

I don't know a single person who was happy about that ruling.
When I say we're moving toward the abyss, you begin to add all these things up. The size of government keeps growing. There doesn't seem to be anything holding it back.

It's interesting that this is occurring under a party whose platform claims to reduce the size of government.
It's more a case of having one party controlling all branches of government. If you look at the period when the government ran surpluses, it was during that delightful period of gridlock. Now every bill that goes through Congress is a Christmas tree bill.

I'll tell you another gaping hole that I see, especially in the more mature companies that are traded on the U.S. Equity markets - underfunded pension plans. It's hard to make a case for investing in any company that still has defined-benefit plans. That seems to be a large part of the problem at General Motors and Ford, and has wiped out the profitability of the network airline carriers.
Credit Suisse First Boston* did a study of the S&P 500 in 2002, and looked at unfunded liabilities. It was very clear which companies had unfunded liabilities, and they were all older and unionized corporations--airlines, auto, steel. Any company that started after 1980 had no unfunded liability because they had 401ks. You could see the writing on the wall at that point. We have about 10-11 trillion dollars in unfunded social security system. We may have only between a quarter and a half trillion unfunded liabilities in the private sector, but this may be even scarier. What is this that United Airlines throws off its unfunded pension debt to the government? Something is wrong here. The stockholders should be the one to pay for it, not the taxpayers of America.

31 Companies With Projected Pension Benefit Obligations that Exceed Equity Market Capitalizations
(Source: Credit Suisse First Boston, "the Magic of Pension Accounting," 9.27.2002)

Jet Blue, a company that launched its IPO in 2002, is one of the few profitable airlines, with higher load factors and lower operating costs than the perennial low-cost favorite, Southwest. Is it a significant advantage to merely be the new kid on the block?
Innovation tends to occur in small companies. Large companies are not innovative. They get their innovation by buying small companies. The other innovative force is competition, which brings me back to Eastern Europe. Western Europe is going to require innovation. In the early 1990s, the U.S. went through downsizing, when companies had to get lean and mean. Western Europe is going to have to get lean and mean in a different way. Governments are going to have to get leaner and meaner.

Which brings us full circle to one of the keys of the success in Estonia, Slovakia and other Eastern European countries. As Mike Milken noted at the Global Conference, "It's easier to build than to rebuild."
The U.S. is at the point where we have to rebuild and it's not going to be very pleasant.

Do you think this will be a platform for the 2008 election? Flat taxes that you can file in five minutes online? Perhaps Steve Forbes should consider running again!
I think it will be a platform for the next election, and Steve Forbes certainly has been in the forefront of this issue. Bush did cut tax rates. He has been pushing for free trade agreements. He has made social security an issue that people have to deal with. Nobody has ever been able to push it this far. So, you can see the beginnings of the change occurring now. You'll know we're in change when we get rid of the Department of Agriculture, which oversees only 2% of the economy, and the Department of Commerce. Why do we have a Department of Agriculture? The peak of agriculture was 150 years ago in the U.S.!

Interesting premise. We'll see if the candidates take up the challenge that you've outlined to make the U.S. more competitive on the world stage, and if Steve Forbes is a serious contender in 2008, as a result of a world trend toward flat taxes and paperless governments.

Marc Miles is a former tenured professor, money manager advisor, and author of professional articles, several books and articles in the Wall Street Journal and New York Times.  Currently he is Director, The Center for International Trade and Economics at The Heritage Foundation, and editor of the annual Index of Economic Freedom. Click to order The Road to Prosperity: The 21st Century Approach to Economic Development and/or 2005 Index of Economic Freedom.

Any views or opinions presented in this Q&A are solely those of Marc Miles and do not necessarily represent those of The Heritage Foundation or NataliePace.com.

Business Tip:

By Chellie Campbell

Send Out Ships.

"The vision must be followed by the venture. It is not enough to stare up the stepsÑwe must step up the stairs."ÑVance Havner

Chellie Campbell

You've set up a home-based business. You have a product or service you love, and want to provide it for people for pay, in order to bring money into your life. You've gotten your business license, your business cards, stationary, inventoryÑall the tools of your trade. But it is not enough. Now you have to get customers! How do you do it? You have to reach out to connect with people. I call this "Sending Out Ships."

Let me explain my analogy:
In the nineteenth century, the merchants in London built grand, tall-masted sailing ships. It would take many months, sometimes years, to build them. Then they would hire a crew, outfit the ship and store provisions for the long sea voyage. One fine day, the ship would weigh anchor, hoist her sails, and sail out of London harbor, on her way to visit foreign ports and trade for gold, jewels, silks, and spices. The trip would take many monthsÑoften yearsÑand there were no communication lines open then: No ship-to-shore radio, no telegraph, no cellular telephones. Once the ship had sailed, the merchant could do nothing more; only wait for that future day when the ship would return, sailing into London harbor laden with treasure. On that day, the merchant's fortune was made. And that's where the expression, "I'm waiting for my ship to come in," comes from.

But some people are going down to the dock, waiting for their ship to come inÑbut they haven't sent any out! If you want the fortune, your responsibility each day is to send out some ships. And you had better send out more than one, because stuff happens to ships: One runs aground just outside of the harbor. Another sinks in a hurricane. A few get commandeered by pirates. The whirlpool gets one, and on the next one there's a mutiny, and they sail off to Pitcairn Island and aren't heard from for another twenty years. Then, of course, there's the one that hits the iceberg! Once you send the ship out, it's out of your control. You are only in charge of sending it out, not when it comes in.

When you get into the habit of sending ships out on a daily basis, even if you know some ships aren't going to make it back home, you are still confident and optimistic because you know you have a whole fleet sailing out there. It creates a positive expectation that ships are going to be sailing in, docking at your pier and unloading riches for you any minute. Positive energy shines from you. You feel good about yourself because you've been doing what it takes to succeed. This is what Tony Robbins, in his book, Awaken the Giant Within, calls "massive, positive, constructive action on a daily basis." (Although that sounds a little too much like hard work to me.) I prefer the image of breaking the champagne bottle and waving goodbye to a proud clipper ship on a beautiful spring day as it sets forth on my behalf. And then celebrating the ship's safe arrival with all my wealth.

Send those ships out every day. Then prepare to unload your treasures!

Chellie Campbell is the author of The Wealthy Spirit: Daily Affirmations for Financial Stress Reduction, which is just $11 on Overstock.com! (Great gift)  She created and teaches the Financial Stress Reduction® Workshops on which her book is based in the Los Angeles area and gives programs throughout the country. Her free e-newsletter is available at www.thewealthyspirit.com.

The Financial Stress Reduction Workshop
Are you tired of having too much month at the end of the money?  Frustrated by not earning the money you know you deserve?  Do you want to start a business or grow one by getting more clients who praise you and pay you?   Award-winning Speaker/Author Chellie Campbell will show you how to easily and effortlessly create more money, eliminate debt, and enjoy life!

Special Savings on August workshops!

For a limited time only, Chellie is offering a special for the upcoming sessions of the Financial Stress Reduction® Workshops beginning in August:  Enroll with a friend and you will receive the reduced price for couples, which will save you $295 each.  If you have any questions about the program, please give Chellie a call at 310-476-1622. Please feel free to forward this to anyone you feel might have an interest.  

Small Caps, Biotechs and REITs:

By Paul Woods, President & CEO of Odyssey Advisors, LLC

Stock Market and Industry Group Scorecard for the First Quarter of 2005.

In the second quarter of 2005, the stock market remained on a seesaw, but this time the seesaw went up. For the Nasdaq, this is the seventh quarter in a row that it has reversed direction, making this the longest period of investor confusion since we began keeping track of quarterly returns in 1969. We'd love to see this streak come to an end with a positive return in the third quarter, but also recognize that summers are notoriously unpredictable when it comes to stock prices.

Paul Woods, President & CEO Odyssey Advisors, LLC

During the quarter, yields on longer bonds declined and the rally in bonds appeared to also set off a rally in stocks. While we're beginning to wonder whether the Bureau of Labor Statistics has decided to deal with inflation by not reporting it, the financial markets appear to still be taking these statistics seriously. In the midst of booming real estate prices, the folks at the Bureau of Labor Statistics are probably the only ones in the world that think the cost of shelter has gone DOWN in the last few years.  Shelter accounts for almost 1/3 of the Consumer Price Index and is based upon rents for some unknown reason. Don't know what cities they're looking at, but they want us to believe that rents have declined.  I am no longer certain what the CPI measures but am pretty sure it isn't inflation. A good inflation report in May, slowing economic growth, and the possibility that interest rate increases by the Federal Reserve may be winding down, all combined to touch off a rally in the financial markets during the quarter.

In the second quarter of 2005, smaller companies generally outperformed larger ones, value outperformed growth, and biotech and REITs (real estate investment trusts) were the place to be. The stock market also appeared to discount a slowdown in the economy as economically sensitive stocks lagged the market. For reference, here's the stock market and industry group scorecard for the first quarter of 2005:

During the second quarter, we also began tracking segments of the equity market in addition to industry groups. Here's that scorecard:

In the fixed income market, the yield curve continued to flatten with short rates increasing and rates on longer bonds declining. While we doubt that the Federal Reserve wants to see the yield curve become inverted, they gave no signs of stopping the increases in short term interest rates at their last meeting. Until yields rise to a level that adequately compensates investors for the inflationary risks in the economy, we're remaining cautious and emphasizing quality and liquidity in our bond portfolios.

Overall, we continue to expect economic growth to slow a bit this year. The higher cost of energy coupled with increasingly restrictive Fed policy will probably produce less robust economic growth in 2005. However, we see no signs of a recession on the horizon and can't help noticing also that corporate earnings estimates continue to be revised upward. Although stock market valuations are in the middle of their historic range, common stocks are still significantly undervalued relative to current interest rates. We continue to expect stocks to have a below-average year, but bonds aren't setting the bar very high and we still believe the odds are that stocks will outperform bonds in 2005.

Paul Woods is the President & CEO of Odyssey Advisors, LLC, an independent investment advisory firm specializing in equities and fixed income. He can be contacted at www.odysseyadvisors.com or 310.568.4700.

Information has been obtained from sources believed to be reliable however Odyssey Advisors LLC does not warrant its completeness or accuracy. Opinions constitute our judgment as of the date of this material and are subject to change without notice. This material is not intended as an offer or solicitation for the purchase or sale of any financial instrument. Securities, financial instruments or strategies mentioned herein may not be suitable for all investors.

Copyright © 2005 by Odyssey Advisors LLC

Top 10 Signs of a Bubblicious Housing Market.

By Steve Dietrich, guest lecturer at the Anderson Graduate School of Business, UCLA and Natalie Pace, CEO, NataliePace.com

Real estate, real estate, real estate. How do we love thee? Let me count the ways. You are the Venus of my budget, the equity goddess of my ATM card. You've given me so much joie de vivre that not even oil at $60 a barrel worries me. Yes, you are a dream come trueÑuntil the property tax bill arrives.

Financial innovation in the mortgage markets has made it possible for 69% of working Americans to own their own homes (source: The Torto Wheaton Research Group). If you think that Joe Kennedy is right when he says it's time to get out when you hear stock tips from your shoe shine boy, then 69% seems like a pretty high saturation point, and it might be time to snuff out your dreams of becoming a millionaire on speculative condominium projects. If you believe in Thomas More's Utopia or Voltaire's El Dorado, which is what the housing market feels like these days, then welcome home.

We are living in a first-ever historical phenomenon, which means that economists will figure out what to make of it, and what we should have done differently, a few years after the bubble bursts. You'd have to be pretty optimistic to think that loose lending policies, 1% savings rates and no-down, interest only and liar's loans aren't a recipe for disaster in the hands of brokers who are paid on commission. Think of rolling black outs in California, when Enron energy brokers were controlling that market, and the subsequent billion-dollar bankruptcy of Bush buddy, Kenneth Lay, and Enron, for an example of what happens when economic innovation is directed by commission paid brokers, who have very little regulation (or sense beyond their salary) reining them in. Add the risk soup of spiking oil prices, super-sized property taxes, rising interest rates and inflation, alongside 1% personal savings, and you have a very volatile dinner on your plate.

Will it happen tomorrow or in 2007? As Paul Woods points out, "Keep in mind that it took about five years from the time folks started yelling about a bubble in stock prices before stocks went south.  I've only been hearing about a bubble in real estate for the last two to three years." Also keep in mind that real estate varies widely by region, and can soar quickly if a new industry moves into town or sink overnight in a natural disaster. Any homeowner who has lost property in an earthquake, hurricane, tornado, fire, flood, mudslide or riot understands that loss intimately, with indelible scars on the soul. Copper mining communities have just recently been infused with new life, after a long period of low copper prices, and are undoubtedly at the beginning of a growth cycle.

No one knows exactly when imbalances correct themselves, but with something as illiquid as real estate, you don't want to wait until the storm is on the horizon before you climb down from Mt. Everest. And we're not the only ones shouting that the storm is on the horizon.

How do we know the U.S. (in many regions) has an overvalued housing market? 24 hours in a typical day is all the evidence you need!

There is a case to be made for getting the tax deduction (in the U.S.) of owning your own home versus renting, which is pushing everyone to want to buy these days. The question is, "What position would you be in if the real estate market leveled off or went down over the next 3-5 years?" Would you still be happy you made your purchase? Would you wish that you had waited a few years to buy, or will living in your own home give you immeasurable joy, regardless of whether you owe more to the bank than your home is worth?

May your choices be well-informed decisions, not based upon headlines, hot tips, hope and chasing money that has already been made in housing. May your house be your home, a place of sanctuary and joy, that, when properly researched, can also be a great investment.

"One of the most important factors in successful real estate investing is preserving the ability to sell at a time of your choosing. Your long-term profit may be more dependent upon your ability to select the time at which you sell the home rather than purchasing the home at exactly the right time." Steve Dietrich

Will Greenspan Pop the Housing Bubble?

By Natalie Pace

"Physics has three laws that explain 99% of the phenomena, and economics has 99 laws that explain 3% of the phenomena." Andrew Lo, MIT professor

If the June 29^th Federal Open Market Committee meeting minutes opened with the above phrase, everything written thereafter would have made a lot more sense. Instead, however, there was a sentence buried in the middle of the minutes, which was equally equivocal. "Uncertainties regarding the nature and timing of the potential correction of these imbalances complicated the assessment of the intermediate-term prospects for the U.S. economy." Hmm. What a complicated way to say, "Hmm."

What are "these imbalances" that have the Committee so perplexed?

1. Home prices are at very high levels relative to incomes or rents.
2. Federal deficit is high
3. Personal savings are extremely low (down to 1%)
4. Inflation pressures are increasing
5. Oil, commodities and housing prices are skyrocketing
6. Long-term interest rates keep getting lower, while the Federal Funds target rate keeps increasing, an "unusual" phenomenon.
   
   

Yield Curve -Spread between 30 year Treasury and 3 month T-Bill

Source: Milken Institute

There are economic hot spots out in the U.S. economy, but since no one knows when they'll blow, the Feds are sticking to their story of "removing policy accommodation" by increasing the target rate 25 basis points at each meeting, while at the same time promising to respond to changes as needed. Don't think that the Feds and economists aren't aware, however, that inversions of the yield curve (when short-term rates are greater than long term rates, also called negative yield curve) have preceded the last five U.S. recessions. A second glance at the trend in 2005 (heading south fast) should make anyone skeptical about 2006, and downright concerned about 2007, when the first wave of the 3-year hybrid mortgages will have fully amortized payments due, as well as potential interest rate increases.

What can they do? The Feds have been tossing water on the housing market by increasing the Fed Fund rate each quarter, but the mortgage, housing and Treasury markets are hardly extinguishing. The committee members posed many theories regarding the unusual behavior of the long-term Treasury yields. Whether it's lack of confidence in the economy, or confidence in the economy, or demand from foreign investors (each theory was floated at the committee meeting), low long-term rates continue to fuel the housing market, which has been on fire in many regions throughout the U.S. for the last five years.

As long as foreign investors are willing to buy T-bills and banks are willing to provide 103%, 107%, interest-only and "liar's" loans (where you pay a higher rate in exchange for not providing records on your income) the demand for housing could, in theory, keep pushing home prices up. And increasing home prices allow banks to report a healthy loan-to-value ratio, which keeps the Federal Open Market Committee from worrying too much, provided all these new homebuyers keep making their payments on time.

But can the American homeowner keep making their payments on time when fuel, home furnishings, remodeling, materials, mortgage payments, property taxes and food costs keep going up, while personal savings are at just 1%? Veteran money managers like Paul Woods say, "There's little doubt the government is lying about inflation; the actual number is higher than reported." How many consumers are living on borrowed money, hoping that oil, gas, food, property taxes, etc. will go down soon, when there is little indication that they will?

The Torto Wheaton Research Group reports that homeownership has risen to 69% in the U.S., largely as a result of low interest rates and loose lending policies to sub prime borrowers. Perhaps if salaries go up, everyone will be able to afford their home and gas to the grocery store, but higher labor costs would require corporations to raise their prices, adding even more inflation, which is pretty much what happened in the early Ô80s, when interest rates flew into the upper teens and the real estate market crashed. This scenario is something that the Feds are well aware of and are trying to avoid. As Dr. Ben S. Bernanke, Chairman of the President's Council of Economic Advisers, notes, "The Federal Reserve attempted to contain the inflationary effects of the oil-price shocks [in the Ô70s and Ô80s] by engineering sharp increases in interest rates, actions which had the unfortunate side effect of sharply slowing growth and raising unemployment, as in the recessions that began in 1973 and 1981." (Source: Lecture to Darton College, 10.21.2004)

There is froth, if not explosives, in these "imbalances" in the U.S. economy, but the Feds don't want to screw up again by raising interest rates too fast and they are curious to see the results of the real estate financial "innovation,"--ie. no down, interest-only loans and liar loans that are helping Everyman buy his own home. Why not give the economic innovations a shot at working themselves out? According to the minutes, there is no real upside to forcing a market correction at this time. So the Governors of the Federal Reserve Board agreed that, "Given the unavoidable uncertainties associated with judgments regarding the appropriate level of and likely future movements in asset prices, a strategy of responding more directly to possible mispricing was seen as very unlikely to contribute, on balance, to the achievement of the Committee's objectives over time."

When a $40,000/year manager buys a $250,000 home, there is not much room for plumbing problems and roofing leaks. Not to mention that in the hottest housing markets in the U.S., up to 50% of the new loans are for investments or second homes.

The members of the Federal Open Market Committee are the first to admit that the strategy of ignoring the economic imbalances at this time are risky, and an ominous warning closed out the minutes. "The members concurred that at this stage in the expansion, with margins of slack resources narrowing and inflation somewhat higher, the Committee needed to be particularly alert to signs of a further increase in inflation. Such an increase could be particularly problematic because it might impart upward momentum to inflation expectations that would be costly to reverse." If people start questioning the inflation numbers, according to veteran money manager, Paul Woods, "yields on long-term bonds will go up," which is why his firm is remaining cautious and emphasizing quality and liquidity in their bond portfolios these days.

What happens if long-term bond rates rise? "If mortgage rates were to rise to 7.5 percent in the 4th quarter of 2005... housing prices could fall by 15.5%. In this case, homeowners would lose roughly 3 years worth of price increases," according to Richard Rosen, the Senior Economist and Economic Advisor at the Federal Reserve Bank of Chicago.

How can you protect yourself from explosive inflation that might be more than your budget can bear? Reduce risk by reversing as many imbalances as you can in your own portfolio.

1. DON'T RUSH OUT TO BUY a home where prices are at very high levels relative to incomes or rents, and don't buy more home than you can afford, even if the mortgage banker comes up with an incredibly creative proposition. Learn the risks of being "underwater" on your mortgage (where the value of your home falls beneath the amount you owe). For more important considerations, read "Buying Real Estate in Today's Market" by Steve Dietrich, from the archived NataliePace.com ezine Volume 2, issue 7.
2. ENCOURAGE YOUR CONGRESSMAN TO rein in spending and reduce the Federal deficit. (Note: this isn't a call to increase taxes, which would tax the consumer wallet even further.)
3. GET LIQUID by increasing your personal savings. As Timothy Middleton, MSN commentator, says, "The simplest way to reduce risk in a portfolio is to hold a significant fraction of it in cash. Money-market accounts have essentially zero volatility."
4. EXPECT INFLATION pressures to keep increasing. Build more room in your monthly budget, and don't buy a more expensive home, car, vacation, etc. than you can afford on today's budget.
5. EXPECT OIL, commodities and interest rates to REMAIN at current levels and possibly go higher. When interest rates rise, your variable loan and credit card payments will, too. Lock in fixed, favorable rates now and consider consolidating some of your debt in a low-interest loan.
6. BANK ON Long-term interest rates going higher. Lock in your fixed rate now, if you wish to ensure that your mortgage payments remain low. Don't bank on being able to move in three years.
7. INCREASE LIQUIDITY. The equity that you have in your home is not ready cash, unless you pull some out through a home equity loan. Have enough available funds on hand to get through any tough time that might arise.
8. AVOID real estate speculation where you are relying upon property values to keep increasing at the rates we've seen over the last five years.
9. BE CASH PREPARED for a worst-case scenario, like a health problem, losing your job or a terrorist attack. This money can earn bond-like returns in a money market with no risk, and will afford you piece of mind. Many financial planners call for six months of cash on hand, and Suze Orman recommends dividing it up for varying maturation dates. That way you're unlikely to need to withdraw early and get hit with a penalty fees.
10. UNDERSTAND that if you have an interest only loan, or if you financed 103% or 107%, the value of your home will be LESS than what you owe if the markets flatten out or fall. That could keep you locked into your home and locked into your payments for a lot longer than you had planned for. Would you be happy living where you are for the next seven to ten years?

When you have the Feds shrugging their shoulders, that's never a good sign.
Click to review the Minutes of the Federal Open Market Committee from June 29-30, 2005.

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Summer of Love on Wall Street:

By Natalie Pace

Hot News on Cool Stocks Boasts 11 Winners, 3 Lying Low and Only Two in Negative (Buying?) Range.
(Note: These are not buy/sell recommendations. Always consult a certified financial professional before buying or selling stock.)

Mid-Month Stats, Facts and Educational Information:

1. Your Vote Counts: Intermix (MIX), parent company of MySpace.com is being purchased by News Corp. for $580M cash, or $12/share. According to a press release issued on 7.18.05, the transaction is expected to close in the 4th quarter of calendar 2005, subject to certain customary conditions including approval of the Intermix common and preferred stockholders. VantagePoint Venture Partners has agreed to vote its shares, 22.4% of the outstanding shares, in favor of the transaction. You have a voice in the matter if you own Intermix stock, or even if you are just a registered member of MySpace. DISNEY shareholders revolted against Eisner in 2004, and he was out as Chairman that week, and is now no longer CEO. If you Like MySpace and don't like Murdoch, you'll have the opportunity to JUST SAY NO when the voting ballots are issued to shareholders. If you like MySpace and Murdoch, you'll also have the opportunity to vote FOR the transaction. Your voice and your vote DO COUNT. Also, rest assured that the MySpace founders and execs will listen to the 22 million people who have made the company what it is. This is why capitalism and democracy get the blood flowing! Your voice does count and your vote can change the course of history!
   
   
2. Portfolio Diversification. We've been harping on all of the risks in the markets these days (all of them - real estate, stocks and bonds), encouraging professionals to save more (personal savings ratios are down to a dismal 1%) and get liquid. A starting point for portfolio diversification is to have a percentage equal to your age in SAFE investments.
   
   
3. Semi-Annual Meetings with your Financial Planner. Why not meet with her this summer, while things are relatively calm and everyone else is on vacation? Take in all your favorite strategies from NataliePace.com and other top-performing money pundits.
   
   
4. TipsTraders.com has ranked me at the top of over 690 stock pickers. Learn my strategies firsthand by registering for The Money Show on August 8-11, in Washington D.C. Go to the Calendar section of www.NataliePace.com for more information and links. See you there! Learn great tips, which have resulted in over 70%, ANNUALIZED gains (EVERY YEAR) seen by the companies featured in NataliePace.com.
   
   
5. Cash is King. Kelley Wright, the #1 stock newsletter publisher in the US, has 50% of his portfolio in cash right now. Paul Woods, another respected money manager and the CEO of Odyssey Advisors, is "cautious" and focusing on liquidity (cash). In 2000, cash was the top-performing asset, and with rising interest rates, you can ensure bond-like returns with cash (from interest), at no risk. Additionally, liquidity allows you to buy in on opportunity. Patience, planning and a sound strategy always pay off for the sophisticated investor.
   
   
6. Dead Hot Summer. We're heading into the weaker season - summer doldrums, traditionally not a great time to buy anything but shorts or sell anything but mojitos.
   
   
7. Brokers: It Pays to Pick a Good One. Risk tolerance, portfolio diversification strategy and tax strategies are some of the many services that a great financial planner will provide you with. For tips on finding your perfect partner, read the article online at www.NataliePace.com, in the archives, Volume 2, issue 4.
   
   
8. Breakout Countries. This month, NataliePace.com has focused on a new hot spot on the globe, and no, it's not China. Read the Eastern European Renaissance for this month's hot new stocks and report card!

Bottom Line: NataliePace.com is providing you with news and important information, but you need to consult your financial planner to determine your best strategy for using the information. That will depend upon your age, your retirement plan, and your risk tolerance and portfolio diversification. The stock portion of your portfolio is a higher risk classification, where you ideally seek to gain higher returns. As the NASD said in a recent investor alert, don't bet the farm on the stock market.

Full disclosure: I have listed the companies that I own under the column "NP OWNS?"

Stocks in our Watch For Good News Category
(Investors who "never pay retail": Note that highlighted stocks are trading at their 52-week lows. It may be a good buying opportunity.)

Stocks in Overvalued (Take Your Profits) Category, which were taken off of the Hot Stocks List on 7.1.05:
Genentech closed out at $80.92, with 328% gains.
Google closed out at $292.72, with 193% gains.
Metals USA closed out at $19.32, with 32% gains.
Pixar closed out at $51.67, with 21% gains.

Please note: NataliePace.com does not act or operate like a broker. We are a media and information center. This article is intended to educate and inform individual investors, and, thus, to give investors a competitive edge in their personal decision-making. The publicly traded companies mentioned in this article are not intended to be buy or sell recommendations. ALWAYS do your research and/or consult an experienced, reputable financial professional before buying or selling any stock.

Single Mothers Unite to Turn the "Blues" Into Blue Skies.

Learn how you can help the 7 million children who are living in poverty here in the U.S. featuring the nonprofit organization, CoAbode.org.

Carmel Sullivan, Executive Director and Founder, CoAbode.org Photo Credit: Trudy Forristal

A lot of ink has been given of late to post-partum depression, and what beautiful Hollywood moms do to battle it. At the same time, in every city in America, over one-third, 34.3 percent, of all female-headed households with children under 18 are living in poverty. There are 13 million single moms raising more than 20 million children in the United States, increasing at 25% each year, according to the 2000 U.S. Census Bureau.

Single mothers are struggling to raise children on their own. Some live in garages, or sleep on borrowed beds. Others move back home with their parents. Some, like two-time Academy Award-winner Hilary Swank and her mother, have even had to sleep in their car. Thanks to one brave mother with a brilliant idea, more and more moms are teaming up to cut their expenses by almost half, and give themselves the blessed free time that so many overburdened, overworked single parents lack.

CoAbode, an online house-sharing service, was founded on the principle that two single moms can afford twice the house for half the money, do half the cooking and cleaning and have another adult around for childcare and car pooling. CoAbode doubles the spending power of single mothers by cutting the costs of housing, utilities and childcare. Less work and lower overhead reduces stress, giving a single mom more time and energy for healthy interaction with her children and more money for discretionary spending. The idea is simple, yet the results are profound. In fact, many successful women, including Gloria Allred and Natalie Pace, have gone on from house-sharing to live and launch the business of their dreams.

Below is the personal story of that brave single mother, Carmel Sullivan, the founder of CoAbode, a 501 (c) (3) non-profit organization. In just three years, CoAbode has attracted over six million hits to its web site, and has helped countless mothers and their children. This year, CoAbode is seeking private donations to meet a matching grant from the Three Guineas Fund in order to continue and expand their support and services for single moms. If you would like to contribute to a cause that helps alleviate poverty here in the United States, please click to donate to CoAbode, or go to http://www.coabode.org/donate.php.

"Single Mothers Unite," an excerpt from "Chicken Soup for the Single Parent's Soul" by Carmel Sullivan, Executive Director, CoAbode.org

Life can be eerie sometimes but for me, in the months immediately after divorce, it felt downright scary. It was like watching the world pass by with the sound tuned way down. Society clearly went about its business but I didn't, not really. Yes I was functional, I brushed my teeth and did the laundry and somehow picked up the groceries, but I was never aware of doing any of these things while I was doing them. Sometimes I'd reach into the fridge for milk and wonder how it got there? Or I'd suddenly notice that I was miles out on the freeway and had forgotten where I was going in the first place. Now I wonder how my post divorce Ôblue' period was perceived by my young son Cooper. He was only 7, but what did he make of Mama somnambulating around like a lost ghost stopping only to hug him, holding on for dear life, for solace?

The haze and paralysis was quickly chased away by the cold reality of economics. After seventeen years in a happy, prosperous marriage I suddenly found myself plagued by worry and doubt. How on earth was I going to support this little boy on my own? Fear gripped me by the throatÉ. a deep, relentless sense of doom pervaded everything I did or felt. And it wasn't just about money; it was the loneliness, it was not understanding my place in the world anymore, not knowing where I now belonged. For the first time in my adult life I felt utterly powerless and alone. At nights I'd wait for Cooper to fall asleep and then curl up in a fetal position cryingÉ not on my own comfy bed in my own, beautiful house, but on a stranger's bed in a small room that I was forced to rent upon relocating to Los Angeles after the divorce. For a while, I allowed the fear to take me over. The worry about where I could go and what I could do infected every waking moment. The sensation became so gut-wrenching that I retreated into meditation. A practice I had always nurtured for pleasure now became a place to escape to. The relief would come and I would love it.

It was in a prolonged meditation that I had a realizationÉa warm peaceful feeling filled my body and mind. A clear intuitive thought pierced through the fog. It was filled with peace, joy, but mostly with pure intention. It told me to "find another single mother to share with."

Bolstered by this clear message I went in search of a house big enough for two families. When I found the house I posted a notice: "single mom seeks same to pool resources and share a house with a garden. Let's work together to create a safe environment for our children." I received 18 responses. At first I felt that the something good that was happening was all about me. But as I started to have conversations with the moms who responded, it became clear that this was bigger than me. This was about all of these women looking for a way to connect, and not just for house sharing, but as single mothers who needed to reach out to someone who understood what they were going through. But I only had one houseÉ what could I say to the other seventeen? After chatting with several of the moms over coffee, it struck me that some might have more in common with each other than they had with me. Two had 3 year old boys. One mother had a 16 year old girl and lived close by another who had a 14 year old girl. It made perfect sense to put them in contact with each other. And so I did. And they were grateful.

If 18 single moms were looking to share with another single mom in my small neighborhood, how many hundreds must there be in the greater Los Angeles area? How many thousands in California? How many millions in the United States? I did some research and found that there was no forum where single moms could find each other to house share. That familiar intuitive feeling came over meÉand I was listeningÉ Why not me? Why not take the initiative and create my own vision of a place for us single moms to connect, a place for us, by us where we can pool resources to build healthier, happier, more secure home environments. So I founded CoAbodeÉ a web site designed exclusively to connect single moms for house sharing and friendships. It took time and incredible effort but within a year I had a full service website up and running. Today we have 20,000 members, thousands of whom are sharing homes together all over the United States.

Only another single parent truly understands how lonely and sometimes frightening it is to face every day raising your children alone, which is just one of the reasons why single parents make ideal roommates for each other. And the message from those single moms who've connected off CoAbode is so heartening. They rejoice in doing half the shopping, half the cooking, half the cleaning, and getting twice the house they couldn't have afforded alone. Recently divorced women tell me how they've been able to hold on to the family home by bringing in another single mom to help share the financial burden. And instead of dwelling in a sad and lonely place, they now have a friend to laugh with, or a shoulder to cry on when the bad memories creep in. But more inspiring than all of this is what single moms say they've achieved for their childrenÉ I hear about warm kitchens full of children's laughter, two year old boys who assume they are brothers, and teenage girls who share the bus to school with new surrogate sisters, knowing that they have so much more to return home to than they ever had before.

It may take a village to raise a productive member of society but we can make a great start with single moms who unite in their devotion to their children and their willingness to help themselves and by doing so, the world.

CoAbode is a 501 (c)(3) non-profit organization.

Please click to donate to CoAbode, or go to http://www.coabode.org/donate.php. Your support is needed to ensure that CoAbode matches the Three Guineas Fund grant. Please know that any amount is greatly appreciated, and that large donors will be a part of CoAbode's It Takes a Village List of Contributors, which will be posted on the web site.

Carmel Sullivan, the founder and executive director of CoAbode.org, is a professional artist and early childhood educator who believes in the idea of community support for families. Born in County Cork, Ireland. Sullivan comes from a large family of seven children, which may explain why the notion of child-centered education has always been dear to her heart. She believes in the educational philosophy that teaches parents to honor and respect their children in every interaction. This attitude is reflected in her mission for CoAbode.

VISION: To build a global community of investors through a worldwide website, seminars, radio, television and print partners.
GOAL: To provide high-quality, first-run, ethical financial news, information and education, presented in an entertaining format, across all media (television, radio, print and online).
MISSION: To provide the news, information and education investors need to make better choices and to make investing as much fun as shopping.
PHILOSOPHY: Member Mosaic. Piecing together a more complete picture of the publicly traded company, one tile at a time, by valuing firsthand consumer experience, conducting evaluations of the executive team and lining up the numbers of the publicly-traded company with its competitors in a Stock Report Card.
For more information on NataliePace.com contact us at info@NataliePace.com

NOTICE: NataliePace.com is NOT a stock brokerage service, and does not operate or act as one.