Another Great Depression May Be Knocking Our Door

INTRODUCTION: The present symptoms in the world market make us recall the beginning of the great depression of early thirties wherein markets were full of the gluts of commodities but customers were not available to purchase the commodities despite the prices were going down. The total demand in markets had lagged behind the total supply. It was Lord Keynes to point out that the lack of effective demand had been the sole factor causing initiation of that great depression. The lack of effective demand was taken as resulted on account of investment lagging behind saving. The investment was lagging behind saving because the inactive portion of total saving was not being compensated through autonomous investment based on deficit financing. The problem was solved by adopting deficit financing and pump priming as suggested by Keynes.

THE PRESENT PROBLEM: The present situation in the world market also points towards the lack of effective demand. But, this time the reason is not being taken as the lack of investment or, in other words, the uncompensated inactive portion of saving. The budget deficits in all the developing and the developed economies are not only being enormously increased but are also regarded as rapidly outpacing the inactive saving. All the same, the producers are not finding adequate effective demand and threatening entry of another great depression is being suspected in the world. There are three factors most responsible for making the deficit financing ineffective in controlling the present depressive trend in the world market, as discussed below.

(I) In latter seventies a group of prudent economists had warned the developing world that inequalities of income distribution were going on increasing with the advancement on development path. They had opined that this would create a strong barrier on the path of economic development and economic growth. Their warning was neglected on account of two reasons. Firstly, the policy makers had a wrong notion in their mind that the slowly rising inequalities would create a sound group of rich investors to feed the future development based on heavy investment plans. Secondly, the policy makers were either under the influence of the rich group that was grabbing the fruits from distribution inequalities, or some of the policy makers belonged to the fruit grabbing rich group. Therefore, some from the high income group started to rapidly become richer but their number went on decreasing side by side. The growth rate of their income remained considerably higher than the growth rate if national income on account of rising inequality of income distribution. The remaining of the riches, lagging behind in the fast race of rapidly becoming richer, were thereby slang down to the following middle income group to add to the number of persons in middle income group.

On the other hand, the poverty alleviation programmes helped a considerable number of persons from the low income group shift to middle income group. Thus the mass of middle income group went on rapidly increasing in number and thereby the middle income group became a dominant consumer group. The middle income group has become so wide and so dominant that today the word 'market' means the market of consumption items pertaining to the consumption of middle income group, unless it is otherwise specified. The rich minority heavily invested in the production of commodities pertaining to the consumption of the vast middle income group. But, the disposable income of this group increased with a lower rate than the growth rate of the production of their consumption items because of the rising inequality of income distribution and a high degree competition among producers to squeeze the purchasing power of this market dominating group. That is why we are coming across slackness especially in the market of the consumers' goods pertaining to the consumption of middle income group.

(II) In the days of the thirties when the world was suffering from great depression, great many portion of total inactive saving was completely inactive and a small portion was used in speculation that was but limited mostly to commodity speculation only. As per the 'Liquidity Preference Theory' given by Keynes, the liquidity engaged in speculation was responsible for high interest rate. Therefore, a check on speculation was suggested so that, firstly, the prevailing interest rate may go down fast to become lower than the 'Marginal Efficiency of Capital' so as to induce the productive (i.e. induced) investment and, secondly, the liquidity (purchasing power) used fore speculation may be, to whatever extent, diverted to consumption expenditure so as to add to the falling short effective demand in the commodity market. If we look at the present scenario, only a small portion of total inactive saving is completely inactive and a multiple times of this, is the deficit financing being practiced almost throughout the world. Moreover, the amount of deficit financing may also be exceeding the total sum of the completely inactive saving and the saving used for commodity speculation. But, the great many portion of the inactive saving today being stated as converted into active saving is being used for non-commodity speculation like shares and debentures. The sum total of the completely inactive saving, the saving utilized in non-commodity speculation and the saving utilized in non-commodity speculation makes the total bulk of inactive saving. I don't think that the total deficit finance, whatever the big bulk, has so far out paced the above stated total bulk of inactive saving throughout the world. Thus, the present situation, in this way, is not much more different from that resulting in the great depression of early thirties. The actual inactive saving is not being compensated by deficit financing whereby a depressive pressure is liable to emerge similarly as during the early thirties.

(III) The commercial banks and many of other financial institutions are always interested in financing trade and commerce rather than consumers because of the obvious fact that consumer loans are not only lesser safe but the interest rate also is generally lower on consumer loans, especially in developing countries. Therefore, the actual financing to trade and commerce remained more than its desirable level and consumer credit remained below its desirable level for considerably a long period in the past. This caused a rapid extension of markets going on whereby the middle man profit went on increasing to make the commodities costlier without raising the producer's profit. The increasing prices ultimately caused a decreasing total demand in the markets.

The producers are having no way but to allure customers by launching various sale enhancement schemes. These schemes are though being proved fruitful up to some extent, so far, but on the cost of decreasing profit rate. Today's producer has much concern with the rate of profit (marginal efficiency of capital in the words of Keynes) instead of the total profit. Therefore, if the state of affairs remains persisting, the producers will have to cut production in the near future. This will become a green signal for the entrance of a real depression in the world market and this will harm the world economy not less than the great depression of early thirties.

SUGGESTION: To solve the problem of the endangering slackness so as to block the way of threatening entrance of suspected world wide depression, first of all the big investors should be made ineffective in the priority fixation and plan formulation. Thereafter, the growth of their properties should be curbed. The government investment (autonomous investment) should be directed from creating extra overheads (to attract new induced-investment) towards creation of external economies for the existing producers of general consumption goods. The expenditure of middle income group on education, insurance, medical treatment, telecommunication, entertainment etc. engulfs a considerable part of their income whereby their expenditure on physical goods of consumption falls short, especially, in the developing economies. Therefore, the government should make its welfare expenditure to concentrate on providing these services to the middle income group at a considerably reduced cost. The gulf between the incomes of the general mass and the rich minority should be immediately alleviated by taking strong measures to rapidly lessen the inequalities of income distribution. The consumer loans should be made quite liberal and financing to trade and commerce should be discouraged. The governments should take the drastic and acrid step to strictly curb or even suspend the speculative activities, at least for time being, until the depressive threat vanishes. The instruments of the monetary policy and the fiscal policy should be used in a way that share of consumption expenditure of the rich minority and share of income of the general mass may increase rapidly. These efforts should go on being honestly made until the purchasing power in the hands of general mass starts being commensurate to the supply of general consumption goods in the market.

The Story of the Great Depression Simply Told

The story of the Great Depression that plagued America beginning in 1929 can be better be understood by first considering the life in America during the 1920s, an Era which is often referred to as the roaring 20s in American history.

The roaring 1920s

For many Americans, the 1920s were a time of hope and a time for fun and enjoyment. They agreed with one of the most popular sayings of the time, "every day in every way, things are getting better and better". It was a time when most people coming from the First World War wanted to relax and enjoy themselves.

These hopeful Americans pointed to signs of progress in around. Women's new right to vote was one sign of this progress. Americans also were proud that technology was producing so many new wonders. Technology is defined in these terms as the use of tools and knowledge to solve practical problems and to help people live better. Americans were made better by technology. They bought new products - refrigerators, vacuum cleaners, radios, electric washing machines, and cars which were being made more and more inexpensive. It was a general view that American workers had better job conditions. Jobs were plentiful and the pay was good.

It was a time when people listened to new sounds. People relaxed in the soothing sounds of jazz and the blues. Millions people were hooked to movie theatres and listened to the first talkie films. A new invention called radio brought news, sports, and comedy right into a family's living room.

Radio, movies, and sports made new national heroes. Babe Ruth was baseball's greatest hero. Swimming champion Gertrude Ederle became a sports hero too. It was an era where people appreciated sport. Gene Tunney and Jack Dempsey in boxing excited fans. Helen Wills and Bill Tilden in tennis did the same. Football fanatics enjoyed watching Red Grange and Jim Thorpe. And the Mickey Mouse cartoon character was born in 1928.

Clara Bow, popular film star of the 1920s best known as "The 'It' Girl," was America's first real sex symbol.

Bow grew up in a household of poverty, violence and mental illness. She escaped her circumstances by entering her photo and winning a movie magazine contest, with the top prize being the chance to appear in a small role in the film, "Beyond the Rainbow" (1922).

Despite her difficult beginning, Bow worked steadily in films through the 1920s, typically appeared in supporting roles in films that were described as "domestic melodramas," with an occasional comedy. The type of films she appeared in can best be described simply by listing some of the titles -- "Enemies of Women" (1923), "Grit" (1924), "Poisoned Paradise"(1924), daughters of pleasure, (1924) empty sex (1925), "Eve's Lover" (1925), "Lawful Cheaters" (1925), "Parisian Love" (1925), "Kiss Me Again" (1925), "Free to Love" (1925), "My Lady's Lips" (1925), "Two Can Play" (1926) and "Mantrap" (1926).

Bow was known as "The It Girl," with "it" usually meaning sex appeal. Bow also appeared in "Wings" (1927), which won the first Academy Award as Best Picture. Bow continued to appear in films as the often-wild women who knows what she wants, and gets it, including "Get Your Man" (1927), "The Fleet's In" (1928), "The Wild Party" (1929), "Dangerous Curves" (1929), "Her Wedding Night" (1930), "No Limit" (1931) and "Call Her Savage" (1932). When sound films became popular in the early 1930s, Bow's thick Brooklyn accent was a severe handicap. Her last film was "Hoopla" (1933).

Clara Bow personifies the attitudes and tastes of the 1920s. One website describes Clara Bow this way;

Clara Bow became a major star in 1925 and soon became the 'It' Girl. She was known to be wild and sexy and care free...the perfect flapper! Oddly she didn't constantly go for the bow but the look became associated with her.

Before Clara it was the 'Cupids Bow'. Now it was Clara's (punny).

The Great Depression

The life of the Americans just described above meant that in order to have such lavish relaxation and have the power to buy such technological innovations in the form of radios, electric washing machines, cars, refrigerators it supposes that people had enough money than their parents had, but that was not always the truth in all respects. Since factories and businesses producing these technological innovations needed to have customers they were often working with the banks to grant people loans with some relaxed long term payment plans of the loans.

In 1929 many business in America started to hang new signs on their doors, announcing "out of Business". Millions of workers were informed that the paycheck they were getting mostly at the end of the week was the last paycheck. Soon many people did not have enough money to pay for food, clothes, or housing. Many people joined long lines of jobless people, waiting to receive free meals given out by religious groups.

The 1920's was the time when America went from prosperity, big time and fun that comes with better live brought by technology to a landslide depression. A depression is the time when business activity slows down and many people are out of work. The depression that started in 1929 in America was called the Great Depression. America had seen depression before but none of them was as severe as the Great Depression.

The Stock Market Crash

People disagree about what caused the Great Depression, however most people agree that the depression began around the time of the stock market crash. The stock market is the place where shares of stock are bought and sold. Stocks are certificates of ownership in a company. Stock owners share in the risks of the business they own. If the business makes money, the stock owners also share in the profits.

A form of stock ownership began in America in the early 1600 with the founding of Jamestown. The number of companies that issued stocks grew with the new industries of the 1800s. With the prosperous years of the 1920s, the stock market continued to grow. Up until the late 1920s, most stock owners tried to buy stocks that paid them the most money, in the form of payments called dividends, every year. They bought stocks and owned them for years on end. In the late 1920s however the behavior of people who were buying stocks begun to change for the worse. Many people began to "play" the stock market for some quick money instead of long term investments. People wanted to get rich quickly. So how did this playing of stock market happen?

People who participated in the stock market watched stock prices carefully. They tried to buy stocks when the prices were low. They hoped to sell the stocks after the prices had gone up. The difference between the buying price and the selling prices was their profit. Some people made millions of dollars playing the stock market.

As the number of people playing the stock market increased, stock prices rose. By the summer of 1929, some stock owners thought that stock prices had climbed as high as they were going to go. These people sold their stocks. Stock prices began to level off.

When prices stopped rising, more and more people decided to sell their stocks. In the autumn of 1929, stock prices started to fall. With the falling prices, stock owners panicked. Soon just about everyone was trying to sell their stock. However, people had little hope that stock prices would go up again, so there were few buyers. Many people saw their fortunes fade before their eyes.

Where did all the money invested in the stock market go? In truth, a great deal of the money was not there in the first place. Many people had bought stocks on credit. Buying on credit means that buyers pay small amount of money when they purchase an item; they promise to pay the rest later. With credit buying, few people actually paid the full price for stocks. When prices began to fall, the broker demanded repayment of loans. Few stock owners had money to pay them. Brokers then sold the stock for whatever they could get.

And so the stock market crash marked the beginning of the Great Depression. However this may not have really caused the depression. Some people think the depression began because the industries produced more goods than people bought. Throughout the 1920s Americans eagerly bought vacuum cleaners, automobiles, and other factory goods. By the end of the 1920s, the demand for goods fell off. Warehouses were filled with unsold products.

When businesses could not sell their goods, they began to lay off or dismiss their workers. These unemployed people were not able to buy much more than the necessities of life. As more more people lost their jobs, even fewer goods were sold. Rising unemployment hurt business, leading to even more job layoffs.

Credit buying is another explanation for the Great Depression. As we have already discussed credit buying contributed to the stock market crash. However stocks were not only the items Americans bought on credit. Millions of people bought goods of all sorts by paying a small amount of their own money and borrowing the rest. Some people did not plan wisely and were not able to pay for what they bought on credit.

Other people lost their jobs and could not pay back their loans. Thousands of businesses closed when customers failed to pay their bills.

Certain banking practices also contributed to the Great Depression. Many people put their money into savings accounts. Savings accounts were not insured, or guaranteed against loss, in those days. Banks often used their customers' savings to play the stock market. When the stock market crashed, many bank customers with savings accounts lost all their money.

Banks lost money in another way. Millions of Americans borrowed money from banks to buy goods or stocks. If these people were laid off from their jobs, they could not make loan payments to the banks. Then the banks lost money. Without this money, some banks had to close. People who had put money in the bank lost their savings when the banks closed - just like that! The government did not lend money to the banks to keep them from closing. Many people think that this lack of help from the government contributed to the Great Depression.

And so from the booming economy of America in the 1920s to the bust in 1929 - it all happened very quickly. People lost their homes, their farms, their businesses, and their jobs.

By 1932 nearly 12 million people were unemployed. Many unemployed people found themselves in long lines that covered city blocks moving slowly towards soup kitchens. These long queues or lines were called bread lines. Inside the soup kitchens were free food and, in the winter, warmth. One man described these common scenes of bread lines in Chicago. His words describe the sad story of many people in American cities and towns during the Great Depression.

In Garland Court back of the library, special garbage cans were set out by the thoughtful kitchen help of the restaurant. The garbage cans contained bread heels [crusty end slices of bread], and hundreds of starving men and women gratefully helped themselves. At the other garbage cans, people did their own sorting, stopping to chew on bones and bits of meat.

In warm weather, Grant Park was full with thousands of men and women sleeping atop newspapers on the wet grass. When it turned cold, a thousand shanties went up overnight along the lakefront... the shacks were made of tin signs and ancient boards, but they had chimneys and primitive heating systems.

At the Pixley and Ehlers cafeteria... I'd see a shabbily dressed man sit down with a 5 cent cup of coffee and put 10 spoons of sugar into it for nourishment. Then he might pour a fourth of a bottle of catsup into a glass of water and stir it until it became free 'tomato juice'.

For many Americans, the Great Depression meant going from bad to worse. Farmers had faced hard times since the early 1920s. for most farmers, the hard times continued into the 1930s. Prices for farm products fell, because Europe's demand for food crops decreased as European countries recovered from World War I. (Usually a decrease in demand leads to a drop in prices). A drought a long period without rain - added to the farmers' problems beginning in 1931. By the early 1930s, some farms in the Great Plains states were so dry that the soil began to blow away. Because of the great, swirling dust storms, the area became known as rthe Dust Bowl. Thousands of families left their farms. They travelled across the country, looking for new homes and new jobs.

And so it seemed to everybody that the American dream is no more. Listen to this popular song during the years of the Great Depression;

"They used to tell me I was building a dream,

And so I followed the mob -

When there was earth to plough or guns to bear

I was always there - right there on the job.

They used to tell me I was building a dream,

With peace and glory ahead -

Why should I be standing in the line

Just waiting for bread?"

Except for breadlines and soup kitchens, suffering Americans did not know where to turn for help in the early years of the Great Depression. Private charities, such as churches and local community groups, tried to help the poor, the sick, and the homeless. However, with so many people needing help, many charities soon ran out of money. And this brings us to the role of government in this situation. What was government doing or should have done.

Hoover and the Great Depression

Before the Great Depression, the national government had stayed out of matters such as helping the poor. The government also did not give aid to people who had lost their jobs. At first, Hebert C. Hoover, was president when the Great began. He did not change government policy of not intervening in the lives poor people.

Hoover felt sorry for people suffering because of the depression. However, he did not believe the national government really could do anything to end the hard times. His advisers told him that the depression would end on its own, as other depressions had. Hoover hoped Americans could find ways to help themselves and their neighbors without the aid of government.

Later Hoover realized the Great Depression was not going to end quickly on its own. He started some government programs to aid farms and businesses. However, the depression worsened and Hoover's popularity dropped.

Dr Chris Kanyane is a simple and friendly humanitarian historian from one of the dirt mud villages in Limpopo province of South Africa, where he grew up with no electricity, no plumbing and no shoes.

Chris Kanyane garnered his extensive research, writing and facilitation experience by working/collaborating/involved with diverse organizations globally, including being a Fellow of the American Academy of Financial Management - in academic corporation with Thomas Jefferson School of Law; Institute de Recherche pour le Developpement in Paris (France); Netherlands government through MHO project; the Canada based AfricaFiles; Netherlands based Management Development Foundation; the South African government; University of Johannesburg and Tshwane University of Technology where he was a member of the Central Research Committee.

Chris Kanyane was also a full time Chief Researcher at the Human Sciences Research Council in South Africa (HSRC), the leading research think tank in Africa.

Chris Kanyane was awarded an academic excellence award for his penetrating History on Africa and Human Development.

Chris Kanyane has Masters in Business Administration (MBA) degree from Management College of Southern Africa and PhD in History from Central Western University, Texas (US)

Dr Chris Kanyane has in association with Central Western University developed excellent easy to follow home study course on Africa and Human Development

Customizing Products and Services Presents Entrepreneurs a Great Way to Bootstrap a Business

We live in a world where mass production and scalability have enabled consumers around the world the opportunity to enjoy a wider range of Consumer Products and Services than ever before. Large scale production drives down prices. Items that were once luxuries are now within reach of masses of consumers on every continent.

Overwhelmingly the benefits of scale and industrialization are beneficial to society. Jobs, distribution opportunities, global trade and finance have all thrived in large part because of the benefits of a consumer driven world. The Benetton sweater or MAC cosmetic that is purchased in Denver is the same as a unit of either sold in Sydney.

There is a downside to mass production, a downside that presents opportunities for those seeking to position their enterprise successfully within the whirl of this hyper--competitive consumer marketplace. Most mass produced products are impersonal. They offer value, utility and uniform performance features. They do not, however, differentiate themselves significantly from competitors. This is where the creative and craft minded producers can maximize their offerings.

Hermes purses and scarves are famous, but simple examples of a Brand that has been built from scratch, painstakingly over time and by being extremely protective of distribution channels for their limited production, hand crafted products. Hermes controls the price and design of each unit produced with a discipline that borders on fanaticism. When a design becomes popular and demand soars, the family owned Company caps production far short of maximum sales potential. This is a classic example of a limited distribution strategy that serves to increase Hermes' product desirability among discerning consumers.

Ferrari automobiles, Zegna menswear, Piaget watches, Tory Burch fashions and La Prairie Skin Care and Cosmetics are other examples of Brands that have created world-wide franchises by avoiding any taint of a mass production model. They sell service, customization and personalized product that elite customers demand. The strategy does not need to be limited to exclusive couture brands, however!

The Branding and Marketing Consulting firm that we manage utilizes many different forms of personalized service or customized product assembly to differentiate our clients. In order to be able to compete with behemoth, multi-national brands a new company must be able to identify their Unique Selling Proposition (USP). A better ingredient story or a better mousetrap design will not suffice.

Recently a prospective client approached us with a Perfume concept. The Fragrance world is huge and brutally competitive. The perfumer we met with was keen to commercialize a range of scents, mainly by utilizing generic top notes. We spent a good deal of time trying to define a USP that would differentiate her product, while creating a niche she could occupy. The final, agreed suggestion was to sell a value added personalized blending service with each offering customized, value added and unique to each client. There are a number of added special service features which insure that the Brand will be perceived as unique by her "alpha" clientele.

We have utilized one form or another of this strategy for Gourmet Food products, Toys, Cosmetics, Wellness regimens, Service Providers and many other client projects. An important feature of this strategy is the opportunity to bootstrap the product or service when limited resources are at hand. Local sales can be leveraged to regional sales and beyond. The enterprise can be grown at a pace that is more easily handled by thinly resourced entrepreneurs.

Red Bull, Snapple and Arizona Iced Tea did not start as national and international brands. They were bootstrapped. They found holes in saturated, developed marketplaces and they filled niches. This model is available to creative entrepreneurs who are driven to compete, but understand that they must deal from a different, smaller deck of cards.

by: Geoff Ficke

Geoff Ficke has been a serial entrepreneur for almost 50 years. As a small boy, earning his spending money doing odd jobs in the neighborhood, he learned the value of selling himself, offering service and value for money.

After putting himself through the University of Kentucky (B.A. Broadcast Journalism, 1969) and serving in the United States Marine Corp, Mr. Ficke commenced a career in the cosmetic industry. After rising to National Sales Manager for Vidal Sassoon Hair Care at age 28, he then launched a number of ventures, including Rubigo Cosmetics, Parfums Pierre Wulff Paris, Le Bain Couture and Fashion Fragrance.

Geoff Ficke and his consulting firm, Duquesa Marketing, has assisted businesses large and small, domestic and international, entrepreneurs, inventors and students in new product development, capital formation, licensing, marketing, sales and business plans and successful implementation of his customized strategies. He is a Senior Fellow at the Page Center for Entrepreneurial Studies, Business School, Miami University, Oxford, Ohio.

10 Great Tips For Buying Your First Home

Without a doubt, buying your first home represents a major investment. It's likely you'll never make a purchase greater than this in your lifetime. However, it does not have to be a scary thing for you. Many first time home buyers wonder how to go about this, so please read on to find out the top 10 tips for buying your first home.

With the right amount of accurate knowledge you can make this purchase and feel good about doing it. In this article, I'll help you get started and walk you through it step by step.

TIP #1: GET YOUR EDUCATION FIRST

Before you even start looking at homes, learn what you can about the mortgage process itself. Since this is the single biggest debt most of us take on, don't you think it's important to understand how the mortgage works? What kind of mortgage is for you, how much and so on?

Spend time researching first time home buyer loans, discover for yourself what options you have and ask questions. Use the internet to begin this process.

Once you have a good feeling that you understand how a mortgage works, then begin to look for a large national bank. I do not suggest mortgage brokers. National Lenders are highly regulated and approved by the Federal Government for guaranteed FHA home loans.

I like Wells Fargo, Bank of America, J.P. Morgan Chase and Flagstar Bank. You should be able to find one of these lenders in your city and state.

TIP #2: BECOME PRE-QUALIFIED FOR AN FHA LOAN

Once you understand the mortgage process, what type of loan is best for you then you want to become pre-qualified. I strongly suggest the FHA home loan for first time home buyers. It has a low down payment, good interest rates and the US Government will guarantee the bank by insuring the loan.

Make sure the loan officer you're working with has experience with FHA loans. Many do not and they try to steer you towards another loan product because it's easier for them.

During this pre-qualification process you will discover how much home you can afford and what your credit standing is.

TIP #3 CONSIDERING YOUR LOAN OPTIONS

Ok, once you know how much you can afford, we must decide on a fixed mortgage or an adjustable. FHA does offer both. The adjustable has a lower payment, but in the near future like 3-5 years your payment will be going up.

Choose the 30 year fixed rate mortgage since your payment will not change for 30 years with the exception of taxes and insurance when they go up.

Furthermore, the FHA mortgage allows for a low down payment, like 3%. Yes it does have mortgage insurance, but that's what makes it possible for your lender to allow you to put down such a low down payment. Otherwise you could find yourself looking at down payments of 10%-20% or more depending on your credit.

#4: GET YOUR CREDIT IN ORDER

Ok, this is where many first time home buyers hit their first obstacle. Some have no credit at all or they may have less than perfect credit.

Let's talk about the no credit situation first. If this is the case with you, then begin by thinking a little outside the box. Do you buy car insurance? How about a cell phone? Are you renting? Paying any utilities?

These can help you establish credit. Even though they may not be reporting on your credit profile, a good mortgage loan officer while doing an FHA loan can help get these trade lines considered for credit with the underwriter.

If you have blemished credit, well this is a different story. It may take some time to get it corrected, but it's worth the effort. You cannot go through life without credit, so get started now if this is the case with you.

TIP #5 APPLY FOR THE MORTGAGE

So then, you now have your credit in order, you already know you want an FHA loan and you have been pre-qualified for a certain amount, it's time to apply.

You must realize that when applying for the loan, once approved it will only be good for a certain period of time. In most cases it's 90-120 days, although it could be more or less.

This process requires you get together some paper work. Normally it will be the last 2 years of tax returns, the last 2 years of W-2 statements, your last 4 check stubs and the most recent 3 months of bank statements. This is a minimal amount, likely you will have to produce much more. Just get ready to give them everything they ask for, including blood, urine samples and your firstborn (just kidding).

By taking this important step, you will then have some leverage when buying your first home. Having a pre-approval letter in your hand is like having cash in your hand. You can negotiate a lower price because the seller does not have to wait for you to get approved.

Besides this, many realtors will not work with buyers who have not taken this step yet.

TIP #6 SHOP FOR A GOOD REALTOR

This step is just as important as finding a good loan officer. A good realtor will know how the FHA mortgage works. You loan officer may even know someone and has a few different realtors he/she is used to working with. Just ask.

The realtor should be able to give you a few suggestions of homes available in your price range. You should look at these suggestions carefully. I recommend that you first do a drive by. If you don't like the curb appeal don't waste your time or the realtors.

By asking the realtor about previous sales in the area for comparable homes this can help you determine the offering price. A good rule of thumb is to get the price per square foot for these homes sold over the last 6-12 months. Then compare this to the home you want to buy. This will help you know how the market has been performing.

Becoming armed with this information will help you when writing that first offer. Don't become disappointed if it's not accepted. You can always go up if you really want the home or move on to the next one.

TIP #7 MAKE SURE YOUR LENDER IS GIVING YOU THE BEST RATE

So now, you found the house you want to buy, perhaps you even made an offer and it's been accepted.

Why not take the extra effort to check the interest rate you've been quoted? Talk to a few other national banks, ask for their current rates for an FHA home loan. Do not allow them to pull a credit report since this could cost you some points.

If by chance you find a better interest rate, tell this to your first lender. Allow them to think you're considering applying with them. Perhaps they will lower the rate.

If they offer you an interest rate you like, ask them how much it is to lock the rate in for 90 days. Then ask them how much for a 30 day rate lock. Most of the time a 30 day rate lock will be a better.

Then proceed with the purchase of the home. Hopefully you will take less than 30 days to close since you have met all the loan conditions before hand.

TIP#8 WATCH OUT FOR HIGH CLOSING COSTS

At the beginning of the loan application you should have received by Federal Law an estimate of your closing costs.

Now that you have selected a home, you need a new estimate. Ask your loan officer for this. Compare it to your first one. Make sure all the costs line up with what you expected.

It should be within a few hundred dollars of the first one. Keep in mind it does depend most of the time on the price of the house. If your first estimate is based on the maximum loan amount, your closing costs estimate should only get better, not worse.

TIP #9 GET THAT HOME INSPECTION

Now FHA requires an approved appraiser to inspect the home. They will look for major safety and health violations. They also consider the mechanical systems, roof, foundation and sidewalks to make sure everything is in good repair and working order.

However, they do not perform a home inspection for you. It's for the bank and you may not even see a copy of it.

So consider getting your own home inspection. The few hundred dollars you spend may save you thousands of dollars down the road. You will get a copy of this inspection since you paid for it.

If there are several items that require attention, yet your FHA lender has approved their own inspection, you could use this to bargain on a lower sales price.

Although you do not have to get one of these inspections, it might be a good idea so you know what you're buying. Oftentimes home inspections are very detailed and reveal any serious problems with a home.

TIP #10 KEEP A GOOD RECORD

Now that you're a educated home shopper, you can rest at ease. You know what to look for. You understand the FHA mortgage process. You may have even one or two houses you want to buy.

Since it's very possible you may be looking at several homes, take pictures inside and out. Take plenty of and notes. List the features you like and don't like. Write down the prices. This will help you later.

Going over these pictures and notes will help you when buying your first home. Keep in mind this is a lifestyle change and you want to make the right decision the first time. It's not like an item you buy at the store where you can return it.

Last and certainly not least, you must be able to see yourself living in this home for many years to come. Visualize your furniture in the house. Move in with your mind first.

If you follow these 10 great tips for buying your first home it should be a pleasant experience for you and your mate.

Jeff and Melinda Ragan want to help you get into your first home by offering a free buyers guide and other helpful information on their website, First-Time-Home-Buyer-Solutions.com

Insurance Marketing Territory - Great Product Marketing States

Check and see if any of the states in your insurance marketing territory are listed here. These are great insurance product marketing states to enhance your sales. State rankings are provided for the 11th through 21st state along with a recap listing of the first ten.

TENNESSEE, Rating = 11 Tennessee is not considered a rich state by any means. However, it holds a solid reputation as a solid insurance marketing territory. Here long time recruiting operations are as totally committed to mailing Tennessee brokers, as are music collectors totally committed to collecting Elvis memorabilia. What really helps split up the competition is that the state is divided up into three major metropolitan areas, Nashville and Memphis, followed by Knoxville. We mentioned before, how this factor helps to significantly lower total recruiting competition. In addition, the wide diversity for annuity, life, financial, health, group, and senior products offers all product marketing firms an opportunity.

OREGON, Rating = 12 This an all round very good state to market your insurance products. Examining almost every statistical figure points out Oregon is within close range of the national "average" state. This includes the income level, the percentage of senior residents, the number of agents per thousand residents, and the amount of insurance marketing competition. The agent retention rate, and average number of years of agent experience correlate correctly. The response received back from insurance marketing firms contacting the quality agents has been favorable, and the response rate from agents has been slightly above normal. It is these two last, yet very critical recruiting factors that place Oregon significantly ahead of the middle of the pack.

ALABAMA, Rating = 13 Sweet home Alabama, where the skies are so blue, and the recruiters are too few. Alabama has an exceptionally good mix of agents, meaning independent agents, career agents that broker business, and multi-line small agencies that brokers with insurance marketers their life and health business. There is far less recruiting demand than expected. The lower competition pressure mixed with the pleasant response from those who using refined lists to recruit in Alabama, places a well deserved, lucky 13, rating.

KENTUCKY, Rating = 14 You way find the blue hills of Kentucky beautiful, along with the green pockets of Kentucky agent product recruiters. Kentucky has a fairly similar mixture of agents to Alabama. Although here in Kentucky, there exists a heavier concentration of career life agencies. The competition search for recruiting experienced agents to sell products, is just above normal, yet the response feedback from insurance marketing organizations ranks as being very good.

ARKANSAS, Rating = 15 Arkansas is ranked the ninth highest state for its rising senior population, and reasonable retirement housing and living costs. This makes it a must state for insurance marketing recruiters of senior market agents to sell ltc, long term care, medicare supplements part B and D, final expense, and some annuity products. However, here is a drawback for some insurance recruiters. This is a state where it is much harder to sell high premium, sophisticated annuity and life retirement/invest plans. Arkansas lends itself to a rural and small business atmosphere, starting just outside Little Rock city limits and extending throughout the entire state. As it is a low-income state, major life insurance career agencies have focused elsewhere. This leaves many semi-captive agents, independent agents, brokers, and PPGA producers. Moreover, it is a very good state also for marketing medical plans, small group, term, universal life, and family life products.

KANSAS If you have a limited recruiting budget, stay out of Kansas City, Kansas. This area has too many career life agencies. and lower agent retention. Unknown Fact revealed: a state or area of a state with a high concentration of career life agents averages a 5% to 20% lower retention of maintaining The remainder of the state, has agents of the caliber that are much more likely to show an interest in your insurance product or give brokers an opportunity. Kansas holds the 21st position for median family income, plus a senior population equal to the state average. For you, a recruiter, it means you have a vast variety of products for brokers to sell. Products ranging from variable indexed annuities, to long-term care, to universal life, all have their marketplace in Kansas. To these advantages, add good feedback response from other marketers and a lower that capacity demand for recruitment advertisements.

MISSISSIPPI, Rating = 17 For the current time we are keeping Mississippi in this ranking position. .Earning the distinction of currently being the state with the lowest median family income, does not help .This means it is a poor state to market annuity products, while lower cost health and life products thrive. Overdue modernization and a favorable business tax environment will eventually drive up the housing market and associated contracting and building occupation incomes. Local and regional recruiters know that outside areas are not feeling the effects; in fact, some are benefiting from higher quality that normal. Staying out of main town New Orleans is smart, while staying out of Mississippi is not.

OKLAHOMA, Rating = 18 Oklahoma is more than just an "OK" state. It may surprise you that most of the lower income states, have a higher than average rating. Why? Over the last 10 years, larger career life companies, especially those based in the high-income Northeastern/New England states have pulled out almost all their agencies in lower income areas. Why So? A Large career life company wants to get the agents off and running appointments with higher income products. They look for lots of possible clients that can afford high premium life and investment plans. In a low-income state, finding people with this profile is not feasible. For the number of Oklahoma agents willing to broker business, recruiters have overlooked the state far too often. Other than high premium or complex annuities, the state is wide open for business.

NEBRASKA, Rating = 19 Nebraska is not only home to the Cornhuskers. It is also the home of major health insurance companies, like Mutual of Omaha, World, Medico, and others. Although the senior population is slightly above normal, these home base insurers have quite a monopoly of senior related products. Their agent direction has widely changed however to being much less captive than before. This means the brokerage agents in Nebraska are still not very open to non-senior, blue-collar disability, and medical plans. The average family median income is above 28 states. This opens up good premium opportunities for brokers offered variable life, universal life, term, small group, worksite benefits, and annuity plans to sell their clients.

UTAH, Rating = 20 No every man does not have 6 wives, and 20 children. Therefore, it is not selling family life, and family medical policies that place Utah so high up in the rankings. Instead, it is the wide mixture of clients, especially outside the Salt Lake City area. The influx of agents moving from Nevada and Colorado to Utah is worth noting. The market for all types of life, annuity, and health products is very strong. There are a sufficient number of brokerage agents to make your mailing worthwhile.

In case you are wondering here is a recap of the first 10 rated states Florida, Texas, California, Ohio, Georgia, Wisconsin, Minnesota, North Carolina, Michigan, and Missouri with the #10 state ranking.

Well published author, Don Yerke likes to concentrate on what you don't know or what no one else dares to print. Tell it like it is.

Watch for his new paperback book debuting on Amazon early this summer. It is loaded with great insurance marketing and recruiting information.

Come and get your FREE "Think and Grow Rich" Ebook by Napoleon Hill instantly. The website address is [http://www.agentsinsurancemarketing.com]