Monthly Archives: December 2013

Where Me and Dave Don’t Agree

Recently I posted an article from the Dave Ramsey blog about 20 things the rich do every day (that presumably the poor don’t do much) I stated in the re-post that I don’t necessarily believe that Dave’s approach to wealth creation is for everyone, but it probably is a best answer for 85%-90% of people. Especially if they are struggling with financial basics. Then its Dave ALL THE WAY!

I want to share a couple of examples of how I think a bit differently. One is in the area of credit card use. I have one and only one card. I use it a lot but need to define HOW and WHY I use it a lot. First of all, we use a card that only charges 4% interest. Of course there is no interest charged when the entire balance is paid off every month. The card accumulates “points” or “miles” that can be used elsewhere for other things. We do as much business on the card as we can because it’s money we will spend anyway every month. We either pay out a little here and a little there (or a lot here or there) all through the month, or we pay out one big payment on the credit card statement once per month. We just make one big payment. It works out the same, but we get the points. We got our card in 2008 and so far we have paid for 6 cruises from just the free accumulated points! Not bad. It’s like our savings account for cruises that the credit card company pays for.

What about carrying over a balance?

Believe it or not, there are times when we do carry a balance on the card. Remember, we are paying 4% when we carry a balance. In our business we renovate houses and rent them to long-term tenants. If we use construction loan money from a bank, we typically have to pay around 6% interest and will incur fees when securing the loan. With the card, not only is the interest lower, but the origination fees are not there and we do not have to secure the loan with a real estate lien.  Another time we carried a balance was once when we actually bought a house with a credit card. We actually made the down payment of about $5,000 with a 0% introductory card. We paid it off 3 months later before the 0% interest ran out.

Why I Don’t Fit the “Dave Formula”

I personally don’t fit the Dave formula mainly because I have big dreams and plans. I cannot do my business by living on the notion of always keeping my spending below my earning (at least as the normal mind-set) When I find myself needing more income, I choose to go and create more income. If my income were derived from a job where I were paid by the hour, I could not do this very well. My income originates from investments that can be duplicated or “increased” exponentially. There is no limit other than my ability to find and secure income producing investments.

Where Dave and I Agree

20 thingsWe do agree in the area of understanding and implementing financial strategies for those who have struggles with their finances. One MUST gain control over un-disciplined spending, over consumer debt and budgeting. If you cannot control yourself in those areas, you should never be thinking of aggressive investing. You will self destruct if you do. If you want to see The 20 Things the Rich Do Every Day, click the link to the left. It is a link to Dave’s blog and has access to his other resources there.

Meanwhile, I just booked a cruise for 2 for my wife and I and plan to enjoy a week of tropical bliss in the middle of winter on Capital One!

A Blog Income Update

The last two or three months have been busy for us and I have not kept up with our income producing blog at all. Today I logged in for the first time in two months just to see where things stood. Amazingly, not only was there more income there but I had new members as well. Where did they come from? I have no idea! But the important thing is that it is proof to me one more time that if you take the time and energy to get something going, there comes a time where you can walk away from it and the income still shows up.

My impression of Internet Marketing is more favorable than ever and I’m glad I took the time and invested the resources into learning what I have so far. To me this has opened up a whole new range of opportunity to continue building passive streams of income. I will say that you must have more than just a “dabble your toes in it” interest if you want to be successful. Our blog income system only costs $25 to try out and you can make money with it. But if you want to make more than $100 or so per month, you really have to commit deeper than a $25 training program. In fact, if you want to make $500 or more per month, you need to either be serious enough to get that more advanced training packages or don’t even mess with it.

on-lineI personally see internet marketing as the tool of the future for massive income earning so I don’t have a problem investing in my education for that goal. If you have a similar belief, I would still recommend opening an account and commit to 3 months worth of serious effort. The link to find your way there is www.empowerfrontier.net It will ask for your email address, but I’m the only one that will ever see it.

We are approaching $10,000 in income for 2013 and expect it to grow in 2014. It can be done if you can simply follow the educational instructions provided.

 

Real Estate Investing Seminar

re investFor all of you who have been asking me to do this, I’ve finally set a date and I’m organizing the material. Everyone who knows us, also knows we’ve been engaged in real estate investing for about nine years. Our “credits” (I guess) include about 60 rental units and the fact that we became millionaires on July 4th, 2012 after about eight years of investing.

This seminar will include all of the information you need to make your first investment. It actually includes everything we needed to repeat the process enough times to become millionaires.

Location: Cross Timbers Cabins

February 21 – Friday 7pm -9pm

We will be covering perhaps the most important element of real estate investing. Your personal reasons “why” along with basic keys of wealth building.

February 22 – Saturday 9am – 12 noon

Essential Real Estate Investing Principles along with traditional and creative financing techniques.

February 22 – Saturday 1pm – 4 pm

Nuts and bolts of finding, negotiating, buying and managing investment Real Estate.

February 23 – Sunday 9am – 12 noon

BONUS video presentation and discussion

– We will serve rolls, bagels, juice and coffee on both Saturday and Sunday morning.

– Saturday Lunch will be provided

– We require a minimum of 5 attendees and will only accept up to 12

– Cost is $175 per person or $275 per couple, (bring a friend or spouse for only $100)

credit cards

– All cabin rates will be 1/2 price for seminar attendees if you would like to spend a night or the weekend at Cross Timbers Cabins

You may call 417-234-4394 for more questions or make your reservations

Email me at: alliedps1818@gmail.com

Hope to See You There!

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Real Estate Investing Seminar

me and Shelley 02For all of you who have been asking me to do this, I’ve finally set a date and I’m organizing the material. Everyone who knows us, also knows we’ve been engaged in real estate investing for about nine years. Our “credits” (I guess) include about 60 rental units and the fact that we became millionaires on July 4th, 2012 after about eight years of investing.

re investThis seminar will include all of the information you need to make your first investment. It actually includes everything we needed to repeat the process enough times to become millionaires.

Location: Cross Timbers Cabins

February 21 – Friday 7pm -9pm

We will be covering perhaps the most important element of real estate investing. Your personal reasons “why” along with basic keys of wealth building.

February 22 – Saturday 9am – 12 noon

Essential Real Estate Investing Principles along with traditional and creative financing techniques.

February 22 – Saturday 1pm – 4 pm

Nuts and bolts of finding, negotiating, buying and managing investment Real Estate.

February 23 – Sunday 9am – 12 noon

BONUS video presentation and discussion

– We will serve rolls, bagels, juice and coffee on both Saturday and Sunday morning.

– Saturday Lunch will be provided

– We require a minimum of 5 attendees and will only accept up to 12

– Cost is $175 per person or $275 per couple, (bring a friend or spouse for only $100)

credit cards

– All cabin rates will be 1/2 price for seminar attendees if you would like to spend a night or the weekend at Cross Timbers Cabins

You may call 417-234-4394 for more questions or make your reservations

Email me at: alliedps1818@gmail.com

Hope to See You There!

.

Real Estate Investing for GIRLS!

If you were to ask me direct if I thought that real estate investing was any different for boys than it was for girls, I’d say……..It depends. The process itself does not favor one over the other and so there is no difference whatsoever. But….there is a difference where real estate investing does favor men regarding culture. It has to do with men being considered “typically” or perhaps “traditionally”  the primary earners in a family. Also, men are typically more involved in the area of home repair/construction. For these reasons,  many would think that men have the advantage. Whether all that is valid or not, my experience with others involved in RE investing seems to be that most are men. Where does that leave the women?

To me real estate investing does offer a HUGE benefit to women investors. There are many, but I want to address perhaps one of the most important, at least to me. As a married couple, Shelley and I have both been equally involved in our investing business. We have both been involved in scouting for workable investments, we’ve both arranged financing, we’ve both done rehabs and we’ve both managed the properties. We’ve learned the business together. By doing all of this, Shelley is equally competent, (maybe more competent in some ways) in real estate investing. Why is this so important? What would happen to Shelley’s ability to earn a living if for any reason I was no longer here?……….Nothing would change!

shelley 01Shelley’s ability to carry on is secure. She has the knowledge to oversee our current management teams and has the confidence to continue making decisions that will cause our business to thrive. Her ability to enjoy life won’t diminish at all, at least from a financial point of view.

shelley 02Does it matter if you can’t rehab a house or manage tenants? Not at all. I know many men that can’t do that either. Real estate investing has nothing to do with your building trade skills or people skills. You can hire others to do all of that. Obviously, if you can do those things, you can reduce your expenses. The reality is that even though we can do all of that, any more we choose to have others take care of it.

SO…….. for all you girls out there who wonder if investing is for you, I will offer the following advice. How nice would it be if you were to have built an investing business that does not rely on anyone else for success? AND….. how nice would it be to know that no matter what events might affect a normal income, you would have income producing capability that would not be affected?

Real Estate Investing……….It’s not just a boys game!

P.S.  The pictures are of my beautiful wife Shelley, The best “Girly Investor” I know!

Creating Future Income

I realized something today that I had never really thought of before. It has to do with retirement income. When we were in our 40’s, I began to see that we were not building any retirement income whatsoever. That made up a big part of our decision to begin to do real estate investing. As I saw it at the time, It would hopefully become our 401k or I.R.A. for future retirement. In many ways, I even viewed them as similar investment vehicles. Where some people had retirement accounts, ours was income producing real estate.

Today, I figured out a subtle difference. An example would be my parents. Both have a pension type of retirement that I don’t completely understand. But I do understand that it is largely due to their faithful saving during their working years. Part of their income is guaranteed as long as they are living but much of it is based on making sure what they had saved doesn’t run out. Either way, Once they are gone, some of their income simply ends and whatever is left of the savings becomes part of their estate, if there is any left. I suppose if there is any savings left, it can continue to be managed to produce income for a certain time for heirs.

Here’s what I believe I’ve learned about the difference between their method and our real estate investing method. The savings method establishes an account to sustain a person for as long as possible and it’s managed well. With the real estate investing, the asset itself is designed to sustain itself infinitely. Not only does it continue to produce income, it also adjusts itself for inflation. In most cases (last seven years being an exception) it will actually increase in capital value. Once the owner passes, the transfer to heirs comes with benefits that are not common with other investments. I would characterize it as being a living, growing and dynamic asset that never looses its ability to produce income.

I suppose that to be fair, it’s important to note that a retirement account and a real estate portfolio both need to be managed well to produce income. I just see the difference as being one is based on making sure the fund does not deplete. The other is based on assets that by themselves do not naturally deplete but are actually designed to produce income indefinitely by their nature.

Another benefit of income producing investment real estate is that it is self funded in a way. Meaning that most retirement funds are funded by the owner with sometimes matching funds by an employer. With real estate, the owner funds the portion needed for the acquisition (or down payment). After that, the rest of the funding of that asset is completed by tenants. If fact, after the initial down payment is made, many times the invested capital can be extracted back out of the asset through re-financing making the asset completely 100% self funded.

If this posting was boring to you then you either have a nice secure source of future income already created or it’s just not that important to you to be of interest. To me, life is a little like a game in the sense that your lifestyle reward at the end depends on how well you play the game along the way and how well you understand the rules of the game while you play.

Certainly, life is not a game, and life is not about wealth and assets. But, understanding that wisdom, knowledge and action (or the lack of it) does have a real effect on your capacity to live the lifestyle you desire.

Just a couple of thoughts today.

 

My “Being Cheap” Rant

It all started yesterday morning while my wife and I were out enjoying breakfast at one of our local restaurants. Sitting next to us was a table full of folks debating and complaining about the nickels and dimes they were loosing by thing like Wal Mart not price matching a 47 cent can of the budget brand green beans, and the gas station on their end of town being 2 cents higher per gallon than the station on the other side of town. Whether or not they would get an extra 25 cents per hour on their 4 hour shift at work during the Holidays. And on and on and on…….. I even noticed that between the 6 of them, (And I am not kidding with this) they ordered only 3 breakfasts with extra plates so they could all share. Hey……… If you can’t afford to eat out……Stay Home!

I have family members (I hope they don’t read this, lol) who habitually drive 20 miles to fill up with gas for 5 cents cheaper and then buy a gallon of milk that’s “better” than the milk they can get in their town to justify driving 20 miles to get cheap gas. Then……pour out the last half gallon of milk because it spoiled because they only use about a half gallon anyway. All in the name of saving roughly 75 cents on a tank full of cheap gas.

Later in the day yesterday, I had a craving for Key Lime pie so went to one of the grocery stores to get some. It’s one of those places where you are required to have a store card in order to get a “better price”. That alone aggravates me, but, they were the only ones that had Key Lime pie. So I get my pie and notice the price on the shelf and thought to myself, well its high, but…….it is Key Lime pie so, Oh well, I’ll get it. At the register, it rang up even a dollar higher than the price on the shelf. SO the shelf price isn’t even the price, It’s only the price if you already have the store card. Well I got my pie, but won’t be going there again. Not because of the price, but because of the gimmicks to cater to being cheap.

I just can’t stand the though,t not to mention the extra time and effort required to save a nickel here and a dime there. Including registering a store card in order to get the shelf price. Buying your gas card at Wal Mart in order to get a 3 cent discount at the gas station out in their parking lot. (maybe that’s to get you in the store, betting on you will spend more money once your inside) Browsing papers and ads for hours for dozens of coupons and then trying to spend you money on the “bargains” before they expire.

Well now to the final straw. Recently I got car insurance from a new company a friend had gone to work for and he wanted some of my business. They had a competitive price and so I switched. Only later to find out that my price was based on all kinds of little conditions to get the ” Discounts I  Deserved”. Wait a minute. What makes them think I deserve any special discounts? Especially for doing things like on-line bill pay, attaching gadgets to my car, filling out company surveys. Being a real estate investor, I have to spend enough of my valuable time doing things like that where I don’t have a choice in the matter with banks, I.R.S. Department of Revenue, property management companies and so on. I certainly don’t want to expose myself to even more jacking around with stuff like that for my car insurance too.

Anyway, here’s my take on all of this.  Robert Kiyosaki may have said it best. “You can get rich being cheap, the trouble is, that in the end, your still just cheap! and nobody likes a cheap rich guy!” He relates a story how his parents used to drive all over town to save 10 cents on a pound of pork butt! It’s funny, but its like that everywhere.

As an investor, I spend my time working the income side of the equation. I have literally spent less time making $10,000 on a real estate deal than I’ve spent so far saving $50 on all the messing around I’ve had to do with my car insurance company. Don’t waste my time. It’s too valuable elsewhere! Don’t assume I’m willing to jump through a bunch of hoops in the name of being cheap. Give me your price without the “cheap” gimmicks or let me go somewhere else.

Back to the breakfast table. Instead of complaining about missing the extra quarter per hour on a four hour shift at work (which is one dollar per day if you have trouble with math) go out and find something productive to do that will make you an extra $20. buy something at a yard sale and sell it for and extra $20 on Craigslist.

In the 30 minutes or so the group at the next table spent whining about a total of maybe $1.89 they could have come up with a half a dozen ways to create extra income far in excess of the nickels and dimes they were griping about.

I shudder to think of what their server might have gotten for a tip. I didn’t stay until the end but it wouldn’t have surprised me if it was a pile of loose change.

I guess my point is, we all have the same number of hours and minutes in each day. We all get to choose whether we spend our valuable time saving nickels and dimes, or, spend it creating abundance in our lives.