Making Your Own Luck


We all can point to that one person in our lives for whom everything seems to come easily. He or she has a good income, great house, beautiful children and the checkout line they choose always moves the quickest. You probably really wonder about that person.  Why are they so lucky?  Why not me?


Well, why not you?  Recent research has confirmed ancient teachings telling us that we have more power over our own luck than we think.  If we focus our energy and attention in the right ways, we can make ourselves into the type of successful, powerful, happy people that everyone else will wonder about.  Read on for three tips from emerging science that can change your life:

  

1.) Don’t covet your neighbor, just focus on your own life.

Ancient theory:  The Epideictic.   Scholars have known about the epideictic since Aristotle discussed it in the third century BCE, though the details have always been murky.  Basically, we’ve always understood the power of praise and blame to define our world, but only recently have we been able to support it with science.

Modern science:  In one recent study, researchers played a video of a man spilling a glass of milk to two groups of people.  One group spoke English and similar languages, the others spoke languages in which blame wasn’t built into their sentence structure.  They found that the people from the first group, whose sentences are built around, “He spilled the milk,” could identify details about the man in the video that the other group could not.  Your language is leading you to blame people, including yourself, even when it doesn’t help you!  

We tend to credit ourselves when we succeed, and assume other people got ahead because they were lucky. If you think people are luckier than you are, then you might need to rethink how you give credit.

The takeaway:  If you want to be luckier, stop worrying about upon whom to place blame.  Don’t blame yourself for your failures and don’t let life events force you into a negative mindset.  Who cares who spilled the milk?

2.) Trust your gut

Ancient theory:  Extrasensory Perception (ESP).  Perhaps you’ve had an occasional premonition or foreboding about something and chalked it up to coincidence. That’s because people are likely scoff when you talk about it as anything but that.  However, you can sometimes look at a situation and just know something is right or wrong even if you can’t put your finger on it.

Modern science:  More and more, scientists are backing you up.  Thin-slicing is a term psychologists use to describe the hunches we get from looking at a person or situation and making instant judgements about them.  Studies have shown that people respond as accurately to five-second clips of conversations and situations as they do to five-minute clips.  

In his New York Times Bestseller Blink: The Power of Thinking Without Thinking, Malcolm Gladwell covers this topic very well, discussing topics from fashion to art fraud.  The feeling of instant recognition is so powerful that people with specific brain injuries don’t recognize their loved ones because they don’t feel the instant recognition.

Takeaway:  Lucky people know when to trust their gut.  Most of the scenarios you deal with daily are scenarios you’ve been dealing with for decades.  You’ve done alright so far, so let your instincts take over. Try to use analogies to determine if the problem in front of you is like the ones you’ve seen, and if so, go with your first instinct.  After all, your cave-person ancestors didn’t call an all-staff meeting every time they fought a mastodon, or you wouldn’t be here today.

3.) Keep it simple

Ancient theory:  Simplicity is at the heart of Taoism, Buddhism, Asceticism, Feng Shui, and many more.

Modern science:  Dr. Barry Schwartz and his colleagues have run countless studies to show that modern choices and convenience actually make us less happy.  For example, if offered a chocolate from one of those heart-shaped assortments, you’d probably prefer to choose one from among a big box with dozens of choices rather than having to choose among a slim selection. Unfortunately, in his experiment, the people who chose from the smaller selection were much happier with their decision.  They didn’t wonder “what if” or experience buyer’s remorse.  The same is true with all sorts of variations on the same experiments.

Takeaway:  Lucky people make choices and stick with them.  Next time you’re in a convenience store, look at how many kinds of M&Ms they have.  Regular, peanut, peanut butter, mint, almond, pretzel, crispy … the list goes on and on. Now check the sizes: regular, sharing size, fun size, big hanging bags, even bigger bags, mixed packs … so many to choose from.  Ask yourself:  Will getting your M&M choice exactly right make you any happier than picking one at random?  If not, then don’t waste your energy trying to get it right.  Lucky people make the right choice in this situation because they realize any choice is the right choice if they make it quickly and stick with it.

Want to improve your luck? The best thing you can do is improve your thinking. Dump your baggage by focusing on yourself, trusting your gut and sticking to your decisions.  If you want to be the person who has everything going great, start by realizing that you already do. Count your blessings.  Then, realize everybody is showing you their best face all the time.  If your friend’s Facebook feed is filled with nothing but amazing life events and exciting vacations that seem to happen to everyone but you, remember that you’re seeing a condensed version of everybody’s life, with only the best parts put online.

If that doesn’t help, then think about it this way: Somebody, somewhere is looking at your life and envying your “luck.”

Sources:

https://books.google.com/books?id=oe2_QgAACAAJ&dq=the+rhetoric+aristotle&hl=en&sa=X&ved=0CC0Q6AEwAWoVChMI1vj3ocv7xgIVBdWACh1r5AIY

4 Home Improvement Projects With High Long-Term Return


When you’re making improvements to your home, you’re not just making your life better in the short term. You’re also making an investment in your future. Ideally,  the increase in the value of your home will exceed the cost of the improvement.

However, it seldom works out like that. The most efficient home improvements don’t pay for themselves immediately. The first item on this list has an ROI of 98%. That means you get back 98% of the money you put into it. To look at it another way, you lose 2% of your initial investment.

It takes years for the appreciation in your home to recoup the expense of an improvement. If you’re looking for an investment, putting your money in a share certificate or other long-term investment option will net you more. When you’re making home improvements, though, you’re looking for ways to improve your quality of life while being as thrifty as possible.

Calculating ROI can be difficult because the data is based on national averages. For instance, in drought-afflicted parts of the country, water-efficient fixtures, rainwater collection facilities and low-water landscaping will pay long-term dividends. In places with lots of solar exposure and high utility costs, solar panels will make your home more cost-efficient and attractive to buyers. No one will pay more for a well air-conditioned house in Alaska! Keeping that in mind, finding out what works for your market therefore depends a lot on trends and local conditions.

There is some good news if you’re looking for more universal approaches for getting the best increase in value for your home improvement dollar. There are a few simple rules to follow. Seek relatively low-cost improvements that require little to no maintenance. They should immediately distinguish your house from similar homes and, ideally, they also improve the energy efficiency of your home.

Here are four home remodel projects that can improve the resale value of your home. They’re excellent uses for your home equity line of credit (HELOC) and you may be able to save money by doing part or all of them yourself! By the way, consult your tax advisor to determine if those improvements apply for tax deductions. 

1.) Replace the front door 

There’s an old adage in real estate that suggests the features get tours, but the front porch gets sales. People make decisions on home-buying all the time by starting with a gut reaction and finding reasons to support it later.

Why not start your home remodeling project with the first thing you interact with on your house: the front door. Upgrading an old, poorly-fitting front door with a newer energy-efficient model is a cheap, quick project that can instantly improve your home’s efficiency and aesthetic appeal. Best of all, hanging a door can be done in an afternoon!

With an average price of just over $1,200, including labor, an energy-efficient front door has an ROI of 98%! It’s also a chance to be creative. A new front door can add a splash of color and window placements can break up a monotonous front profile. 

2.) Minor kitchen remodels 

Replacing major appliances and installing new flooring is a difficult, time-consuming, and expensive task. Being without a kitchen for weeks on end can be a nightmare and the number of professionals needed to install new lighting and other features is mind-boggling. The national average for spending here is $57,000, and the ROI for major kitchen remodeling isn’t great, at only 68%.

Minor kitchen upgrades, like new cabinets, counter-tops, and energy-efficient cook-tops, are comparatively inexpensive. The average spend here is just under $20,000 with an estimated return on investment at an impressive 80%. Just like with the front door, the changes are mostly aesthetic. People perceive a more modern-looking kitchen as being a better fit than a more “retro” look.

This is also a chance to customize a place where you spend a remarkable amount of time. Having a kitchen laid out just the way you like it can make it easier and more enjoyable to cook. This will encourage you to eat more meals in, and energy-efficient appliances can lower your electric bills for the life of the home. 

3.) Wooden decks 

Outdoor space is one of the hallmarks of the current iteration of the American dream. Where else can a family sit and enjoy a frosty lemonade on a hot summer day? Watch the kids play in the yard while tending the grill on a beautiful wooden deck!

Wooden deck additions were unpopular for years, as consumers see them as luxuries. During a recession, remodeling dollars tend to focus on needs, like kitchen and bedroom updates. Now that the economy is improving, more people are looking at decks as valuable extensions for their living space.

The average cost, based upon a 16 foot by 20 foot wooden deck, is $10,000. The average return on investment is just over 80%. This is because of the perception of expanded living space at a reasonable price. Adding a deck costs about $35 per square foot, while a square foot of inside space costs an average of $85! Decks are a great way to increase the play space for a modest cost.

Bear in mind that just like the air conditioning in Alaska, a deck in a climate where the climate in inhospitable outdoors for much of the year will not have as much value as one in more temperate climes. 

4.) Convert an attic space into a bedroom 

For most houses, the attic is an afterthought. It’s a place where unused craft projects and abandoned hobbies go to die. Consider turning that dead space into living space with a remodeling project!

Turning an existing attic space into a spare bedroom or office, complete with its own bathroom, can be done for a slightly steeper price. Nationally, the average cost is just over $50,000. That includes constructing a room, extending utilities to it and adjusting the exterior of the house to accommodate the new space.

This remodel provides a 77% return on investment in resale value, with the potential for more. If you have adult children or relatives visiting from out of town, an attic room can be a wonderful guest room. You could also rent it out for additional income!

Contact Destinations Credit Union if you need help in financing your next home improvement project!  

SOURCES:

Home Equity: Loans Vs. Lines of Credit

If you are looking for funds to improve your home, using the equity in your home can be a great way to finance the improvements.  Using the equity in your home is not something to take lightly, but if you are doing something to improve the value of the home, it can be well worth your while. 

What is My Equity?

The available equity in your home is calculated by taking the current market value of the home (as determined by an appraisal) and subtracting the current mortgage balance.  Destinations will loan you up to 80% of that amount.  To get a rough idea of what your home is worth on the market, you can check internet sources, such as zillow.com, for recent sales of homes in your neighborhood.

Loans Vs. Lines of Credit

A Home Equity Loan is a fixed-rate, fixed-term loan.  The payment and the interest rate are constant over the agreed-upon term.  Therefore your payment amount will not fluctuate.  You cannot borrow against the equity again until the loan is paid off.

A Home Equity Line of Credit (HELOC) is an open-ended loan that you can borrow against any time you need the funds.  The line of credit is up to 80% of the equity in your home.  The rate on the line of credit is generally lower at the time you apply because it is a variable rate.  As market rates rise, so may your interest rate.  With a HELOC, you can draw against the line whenever you need the funds. 

Both options provide low rate loans to accomplish your goal.

With Destinations Credit Union, our HELOC rates are the Prime Rate minus 1% with a floor of 4%.  Since the Prime Rate is now at 3.25% (and has remained so since the end of 2008), our current rate is 4% Annual Percentage Rate.  Prime would have to rise to more than 5% before the rate would rise on our HELOC.

If you are interested in exploring a Home Equity Loan or Line of Credit, contact us through our website or give us a call at 410-663-2500.