Text Box: Newsletter Date 6/30/04 Text Box: Volume 1, Issue 5 Text Box: IRA Real Estate Investments Text Box: So much ado about nothing! The result of this increase should be that by year end we will have the Prime lending rate reach 4.75% to 5.25%, (currently at 4.25%), The average 30 year fixed mortgage should be pushed to about 6.5%.(already at 5.6 -6.0%) That doesn’t sound so bad for many of us who have enjoyed 1st mortgages for most Text Box: Interest Rates seem to be on Everyone’s mind (continued on pg. #2) Text Box: How much to live the Life of Riley? (reprinted from Microsoft Money article May 2004) Text Box: It is likely we will all find this latest .25% interest rate Greenspan hike very anti-climactic after all the discussion preceding it. “It reminds me a lot of the first time I took my son to the doctor. The fear of the needle was much worse than the shot itself. And the shot was necessary for his overall health.” In fact, it is stated by many analysts that the equity market already Text Box: has “built in” a .75 basis pt. consideration factor, and commercial mortgage rates have also increased with the same anticipation. All this agitation is because the Fed benchmark rate may be increasing to 2% by year end. The Fed rate is the amount charged to banks for funds borrowed overnight (which now stands at a low of only 1.25%). Text Box: increase in the amount of money we need to feel well-off. If you haven't heard of wealth inflation before, don't worry. Unlike the consumer price index, it's not reported on by the Department of Labor. The best measuring tool is something I created many years ago. It's called the Life of Riley Index. Named for my inner Irishman, the Life of Riley Index attempts to measure how much money we need to be "independently middle class." This is quite different from being independently wealthy, the way characters in Jane Text Box: You're not greedy; you just want to get by in comfort without working. Here's how big that lottery check would have to be.”  By Scott Burns Text Box: Each time I reach for the brass ring, it eludes me. Your experience has probably been the same. The problem is wealth inflation, a runaway

Interest Rates

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What does it take to live the “Life of Riley”?

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RE Investment Updates

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Gary’s Notes & Natl. Economic Forecast 2004

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Text Box: Gary’s June Newsletter Increase in the Life of Riley Index