Over my twenty-plus years of investing, teaching and writing in the field of real estate and discounted mortgage investment, I've come to some conclusions as to what is required for success. Countless times I have wondered why two seemingly capable individuals have totally different experiences. One is very successful and one is caught in the "paralysis of analysis." One approaches investment like a pitbull on acid and another is frozen by fear. One is enjoying prosperity and sipping on exotic wine and the other just "whines."
What is the difference? Why do some get so caught up in the education drug that they fill their garage with home study courses, but can't fill their car with gas? Over the years I've watched the "winners" and what makes them successful. I've struggled trying to please and educate the "whiners" encountering primarily frustration - until I found the key about 12 years ago.
As I've incorporated the three elements I identified into my seminar trainings, the success ratio of my students has skyrocketed. Most of the world and seminars focus on the least important element only. A few make some attempts to address the second element. You are fighting a forest fire with a squirt gun if you don't deal with the most important third element.
"If you think education is expensive, try ignorance"
Education is the first element and 10% of what is needed for success. I would never underplay education and I don't regret the 30-40 thousand I have spent in cold hard cash on education. Proper education gives you the tools and can help with confidence and creative options and solutions. Education is not enough. You can take every seminar or home study course on discounted mortgages and not make a cent.
A Team and Resources
This second element is at least twice as important as your education (20%). At first you will need a team to cover your weaknesses and inadequacies. Once you have the knowledge and experience, you need a team to multiply your efforts and use your talents to their best and most profitable abilities. When a proper team is in place, your liabilities are covered and you will not be as likely to be paralyzed by fear. (Who should be on your team and how to build it, is a topic for another article.)
"I see only the objective, the obstacle must give way"
Napoleon had an attitude of success. He had "Intention." Any great leader or business person has this essential ingredient. It goes way beyond listening to PMA (positive mental attitude) tapes and motivational seminars. No doubt, there is some value there. For many, they can also be frustrating, self-defeating and counter productive because it is only a part of what is needed.
You have to address several factors in addition to thinking more positively. Your conscious mind and attitude are only the tip of the iceberg. Try to move or steer an iceberg by grabbing a hold of the tip. Not possible, but exactly what people try to do mentally and emotionally.
Other elements are far more important. These are "limiting beliefs", "emotional blocks" and "self-defeating behaviors." Deal with these and life will change. Prosperity can flow, relationships will be abundant and you will realize your dreams.
Limiting Beliefs
"Argue your limitations and they are yours forever."
Limiting beliefs are beliefs imposed by your "un-conscious" mind. You don't have a lot of control here, they just are. Some are easier to spot like "I'm not a good singer" or "I'm no good at public speaking" or "Big dogs want to eat me... and little ones will try too." Other limiting beliefs affect all areas of your life, especially financially. Finances reflect all your beliefs about self-worth and scarcity in your life and the world. You can choose to believe in "Economic alchemy" or in "allocation of scarce resources."
You won't make a penny over what you feel you are worth or deserve. You may not be conscious of these types of beliefs but there is a way to learn what they are, where they came from and how to alter them.
Emotional Blocks
Stephen Covey made a couple statements that summarize this area well:
* All sin is outward manifestation of inner turmoil.
* Unexpressed emotions never die, they just manifest themselves in uglier and uglier ways.
* If you try to strangle an emotion, it struggles for life. If you let it live, it dies in the birth process.
The emotions, both the ones you term good as well as the ones you would consider bad that are in a sense stuck inside you influence your every action and all aspects of your life.
Self-Defeating Behaviors
Actually, self-defeating behaviors are just a manifestation of the other two factors. Becoming aware of and dealing with these behaviors can aid you in identifying beliefs and blocks that stand between you and success. You can fight the behavior or identify the root. Fighting the behavior will not in the long run make much of a difference. The roots are the simple key and easy to deal with.
Goals Can be Extremely Self-Defeating and Useless
Once you deal with the areas we just talked about, then the "iceberg" is easy to steer and success can be yours. You can learn to set goals properly. Very, very few know how to do this.
Most "goal" educators set you up to fail. There is a powerful way to look at goals and in particular "INTENTION" that makes a major difference and works. Never set a goal again that you are not absolutely certain you can and will achieve. Just don't do it. Don't set it if you aren't willing to do what it takes.
By the way, if you aren't aware of your purpose and values, it is nearly impossible to set proper goals. You are fighting an incredible battle if you set a goal in conflict with these inner beliefs that you do have.
Sunday, June 21, 2009
There’s More to Building Wealth than Clipping Coupons
We talked recently about the wealth formula: Spend less than you earn and save the difference. Initially, you may have to cut back to “find” the money to save. Start there if you must. The next step is to learn how to invest your money powerfully. Recently, I took my stepdaughter to the bank to open her first savings account. We agreed that every week; for so long as she was living under our roof, she would take 50% of her pay check and deposit it into a savings account. Then I explained the power of compound interest to her and how her principle would grow each and every month.
Have you seen interest rates, lately? It’s sad. The bank was offering 1% interest on her savings. Of course, at that rate, no one is going to get wealthy. What kind of rates of return do you get on your investments? Mutual funds pay about 5%. A little better, but not very impressive. The stock market yields about 12% over time. That’s a little better. But there are much faster ways to grow your wealth than that.
Tax liens, for example yield 16% - 24% and are fully secured by the U.S. Government. Active trading can return 30%-50% - so can real estate investing. I’ve done pre-construction deals that brought 50%-100% rates of return. And of course, if you leverage yourself by using OPM (other people’s money) your rates of return go through the roof. You’ve got to start learning about what’s available “outside the box” in terms of investments. High returns don’t have to mean high risk. Like most things in life, a little bit of prudence greatly increases the safety factor. There is no way to build wealth that is 100% risk –free. But you can learn to effectively manage your risks and keep them to an acceptable level.
Have you seen interest rates, lately? It’s sad. The bank was offering 1% interest on her savings. Of course, at that rate, no one is going to get wealthy. What kind of rates of return do you get on your investments? Mutual funds pay about 5%. A little better, but not very impressive. The stock market yields about 12% over time. That’s a little better. But there are much faster ways to grow your wealth than that.
Tax liens, for example yield 16% - 24% and are fully secured by the U.S. Government. Active trading can return 30%-50% - so can real estate investing. I’ve done pre-construction deals that brought 50%-100% rates of return. And of course, if you leverage yourself by using OPM (other people’s money) your rates of return go through the roof. You’ve got to start learning about what’s available “outside the box” in terms of investments. High returns don’t have to mean high risk. Like most things in life, a little bit of prudence greatly increases the safety factor. There is no way to build wealth that is 100% risk –free. But you can learn to effectively manage your risks and keep them to an acceptable level.
The Very Last Resort: Bankruptcy
Over the last ten years, consumer debt has doubled in the United States prompting 1.6 million Americans to file for bankruptcy in 2004 (USA Today). President George W. Bush has signed the biggest rewrite of US bankruptcy law in a quarter of a century, making it harder for debt-ridden Americans to wipe out their obligations. Bankruptcy is at an all-time high right now because people see it as an easy way out. I know first-hand the appeal of this "easy way out." In Rich Dad’s Prophecy, I explain how in 1979, I was thirty-two years old and struggling to keep my business above water. My rich dad taught me a valuable lesson about taking responsibility for my actions and fulfilling my obligations.
My rich dad said, "Take responsibility for your actions. Avoid bankruptcy at all costs." My nylon and Velcro surfer wallet business had taken off faster than expected. In only a few years, we were a big company with a sales force of over 380 independent sales reps in the United States alone. The problem was that we had a world-wide product, but we were a small-time company with a young, incompetent management team. When success and incompetence meet, disaster is not far away. I was up to my ears in mistakes, buried by my own personal incompetence.
I had always thought of myself as a good, honest person... yet under pressure, the character that emerged was the person who betrayed those that trusted me. I was about to default on paying my employees and their payroll taxes. I was using my employees’ money to keep the company afloat. My rich dad had been my teacher since I was nine years old. He was a very loving and caring man, but when he was angry... he was not a polite man...
"Why don’t you face the truth? You and the three clowns you call partners have mismanaged your business... you don’t know what you’re doing... you’re incompetent... and worst of all, you don’t have the guts to admit any of this. You guys are pretending to look like businesspeople... but when I look at your financials, you boys are either crooks or clowns. I hope you’re clowns... but if you don’t make some changes, you clowns will become crooks."
"There is nothing wrong with admitting you’re incompetent. But there is plenty wrong with lying and pretending you know what you’re doing. Lying and pretending you know what you are doing is a bad habit. If you want to be rich and successful, you need to learn to tell the truth quicker, ask for help quicker, and be more humble. The world is filled with arrogant poor people, educated and uneducated… people who cannot admit they do not know something. The world is filled with people who go through life pretending they are smart… and that makes them stupid. If you want to learn quickly, the first step is to admit quickly you do not know something."
I was over a million dollars in debt. I had two choices. My rich dad often said to me that inside each of us is a cast of characters. Inside each of us is a kind person, a mean person, a greedy person, a rich person, a poor person, a coward, a crook, a hero, a liar, a cheapskate, a loser, and more. He constantly reminded me that growing up was a process of choosing which person we wanted to become... which person we wanted to draw out of all the cast of characters available. To Rich Dad, a person’s choice of character was far more important than a person’s choice of profession.
"When it comes to money, the world is filled with cowards. Money has a way of bringing out the coward... more than the hero... and that may be why there are so few truly rich people. Money also has a way of bringing out the cheat and the crook in some people... and that is why our jails keep filling up. Money also has a way of bringing out the betrayer... the person who will steal from those that love and thrust them... and when you 'borrowed' from your employees, that is the character you were choosing to become. Crooks and cowards are one thing... but becoming a person who betrays those that trust you is one of the most despicable of all characters available to all of us."
Truth and honesty are not always pleasant and this dose of truth and honesty was very unpleasant... yet necessary. I realized that in my desperation to save my company, I had chosen to betray those that trusted me. This was a deeply painful lesson, a lesson I would always remember. I had two choices. I could continue to be a coward, crook, and betrayer and eventually file bankruptcy, or I could step up to my responsibilities and obligations. I shut the business down and liquidated the remaining assets. I paid all the money I owed to our suppliers, our investors, the government and our employees. It wasn’t easy.
My rich dad later told me, "Although painful, because of the way you chose to handle this business failure, this painful short period of time will someday become the basis of your long-term financial wealth. If you had run and lied, your financial future would probably be a coward’s future... because if you had run, you would have been letting the coward in you determine your future."
My rich dad was right.
If you have gotten yourself into debt...
Take Responsibility
If you have gotten yourself into debt, you need to take responsibility to get yourself out of debt. Get the counseling you need, look at ways to reduce your debt and increase your revenue to be able to pay off the debt that you incurred. Simply put, it’s an act of responsibility.
Determine How You Got There
Take a long look at where you are and how you got there. Be willing and humble enough to learn from your mistakes. Each failure will show you what you don’t know and what you need to learn... and that learning experience will lead to your next success.
Bounce Back
It took you a while to get where you are (in debt/ in deep debt), and it will take you a while to bounce back. Remember that the painful short-term will someday become the basis of your long-term financial wealth.
My rich dad said, "Take responsibility for your actions. Avoid bankruptcy at all costs." My nylon and Velcro surfer wallet business had taken off faster than expected. In only a few years, we were a big company with a sales force of over 380 independent sales reps in the United States alone. The problem was that we had a world-wide product, but we were a small-time company with a young, incompetent management team. When success and incompetence meet, disaster is not far away. I was up to my ears in mistakes, buried by my own personal incompetence.
I had always thought of myself as a good, honest person... yet under pressure, the character that emerged was the person who betrayed those that trusted me. I was about to default on paying my employees and their payroll taxes. I was using my employees’ money to keep the company afloat. My rich dad had been my teacher since I was nine years old. He was a very loving and caring man, but when he was angry... he was not a polite man...
"Why don’t you face the truth? You and the three clowns you call partners have mismanaged your business... you don’t know what you’re doing... you’re incompetent... and worst of all, you don’t have the guts to admit any of this. You guys are pretending to look like businesspeople... but when I look at your financials, you boys are either crooks or clowns. I hope you’re clowns... but if you don’t make some changes, you clowns will become crooks."
"There is nothing wrong with admitting you’re incompetent. But there is plenty wrong with lying and pretending you know what you’re doing. Lying and pretending you know what you are doing is a bad habit. If you want to be rich and successful, you need to learn to tell the truth quicker, ask for help quicker, and be more humble. The world is filled with arrogant poor people, educated and uneducated… people who cannot admit they do not know something. The world is filled with people who go through life pretending they are smart… and that makes them stupid. If you want to learn quickly, the first step is to admit quickly you do not know something."
I was over a million dollars in debt. I had two choices. My rich dad often said to me that inside each of us is a cast of characters. Inside each of us is a kind person, a mean person, a greedy person, a rich person, a poor person, a coward, a crook, a hero, a liar, a cheapskate, a loser, and more. He constantly reminded me that growing up was a process of choosing which person we wanted to become... which person we wanted to draw out of all the cast of characters available. To Rich Dad, a person’s choice of character was far more important than a person’s choice of profession.
"When it comes to money, the world is filled with cowards. Money has a way of bringing out the coward... more than the hero... and that may be why there are so few truly rich people. Money also has a way of bringing out the cheat and the crook in some people... and that is why our jails keep filling up. Money also has a way of bringing out the betrayer... the person who will steal from those that love and thrust them... and when you 'borrowed' from your employees, that is the character you were choosing to become. Crooks and cowards are one thing... but becoming a person who betrays those that trust you is one of the most despicable of all characters available to all of us."
Truth and honesty are not always pleasant and this dose of truth and honesty was very unpleasant... yet necessary. I realized that in my desperation to save my company, I had chosen to betray those that trusted me. This was a deeply painful lesson, a lesson I would always remember. I had two choices. I could continue to be a coward, crook, and betrayer and eventually file bankruptcy, or I could step up to my responsibilities and obligations. I shut the business down and liquidated the remaining assets. I paid all the money I owed to our suppliers, our investors, the government and our employees. It wasn’t easy.
My rich dad later told me, "Although painful, because of the way you chose to handle this business failure, this painful short period of time will someday become the basis of your long-term financial wealth. If you had run and lied, your financial future would probably be a coward’s future... because if you had run, you would have been letting the coward in you determine your future."
My rich dad was right.
If you have gotten yourself into debt...
Take Responsibility
If you have gotten yourself into debt, you need to take responsibility to get yourself out of debt. Get the counseling you need, look at ways to reduce your debt and increase your revenue to be able to pay off the debt that you incurred. Simply put, it’s an act of responsibility.
Determine How You Got There
Take a long look at where you are and how you got there. Be willing and humble enough to learn from your mistakes. Each failure will show you what you don’t know and what you need to learn... and that learning experience will lead to your next success.
Bounce Back
It took you a while to get where you are (in debt/ in deep debt), and it will take you a while to bounce back. Remember that the painful short-term will someday become the basis of your long-term financial wealth.
The Salesman Who Doesn't Believe in His Product
Many years ago I worked for one of those large national real estate brokerage firms selling real estate. This was not my introduction to the real estate business, since I had been investing in buildings and property since 1984. My trainer was an older but highly successful real estate agent. One of the things he shared with me and the other trainee was the fact he had consistently earned over $10,000 per month for the past ten years. He drove a Corvette, was divorced, and owned one property--his residence. If my math is correct, he grossed somewhere in the area of $1,200,000 in ten years. That is right, somewhere in the area of one to one and a half million dollars had gone through his business hands in those working years.
While this individual was a talented agent who had built a nice customer following, I had to ask myself--Why hadn't he ever invested in the great product of real estate? It certainly could not have been an income problem. Even if that excuse were used, we all know 90-100% of a deal can be leveraged. I didn't know for sure, but this skilled agent gave me the impression he didn't have much money. He had income, but very little capital. It could have been that his divorce cleaned him out, financially speaking. Divorce is a major estate and wealth destroyer. (It is worth noting, the author of the book, The Millionaire's Mind, shows most millionaires have been married only once.)
With all of the benefits that accrue to real estate ownership, I am surprised by folks involved in the buying and selling of property on a daily basis who own no real estate. It is an enigma. Let's count some of the benefits:
1. Discounts andinstant equity earned when buying
2. Principle pay down on mortgage, monthly
3. Appreciation--unknown upside potential
4. Rehab and fix-up profits in terms of new equities
5. Forced savings plan (can't sell or tap equity as easy as more liquid investments)
6. Special capital gains and write-off advantages
7. Ability to pyramid gains with 1031 tax free exchanges
8. INCOME: RENTS
9. Ability to grow net worth with no tax unless you sell
10. Easy to purchase with leverage
I recently got an email from a company selling some real estate course. The main selling feature seemed to be his rant against being a landlord. It was almost like landlords are dumb because there are much smarter ways to make money. Again, this seems odd to me. Real estate is one of the greatest investments in the world. Why wouldn't I want to actually OWN it?
Buying and selling definitely has its place. But owning real estate is where you grow equity for the future. Contrary to all of the myths out there--owning real estate is where large estates are created. I am not ashamed to own property. Ownership, i.e., rental income is where freedom comes into being. It won't happen overnight, but give it 5-10 years with hard work, and you will launch yourself into a newfound freedom. I know it's hard for impetuous North Americans to think long term.
Back when I was fresh out of high school, I helped a friend and his family move. They had been renters all of their life. In fact, I estimate they had been renting for at least 25-years when I helped them move from one rental house to the next. The thing I remember is the totality of their life was in that moving truck that day. You see they didn't own any property; other than some worn out furniture and clothing--they had no equity. The sad thing was being long-term renters guaranteed them a life of virtual poverty. The bottom line: When you don't OWN real estate, it is extremely difficult to accumulate any net worth.
I will conclude with this. Years ago at our family business, there was a salesman who worked for one of our suppliers. He serviced our account (sold us Gibson appliances wholesale). He was one of the most honorable and decent guys you could ever meet. He was about 60-years old--about the same age as the real estate salesman mentioned above. He dressed very modestly, drove an average (boring) car. He looked like a regular, middle-class guy. His regular life was being a farmer. He did the sales job just for some spending money and to keep busy. As I got to know him, he disclosed that he owned 48 acres of farmland in a very up and coming area about 30 minutes from our business. THE POINT: The guy is a multi-millionaire--about 2 million. WHY? BECAUSE HE OWNED REAL ESTATE OVER A LONG TERM OF TIME! Real estate salesman who looks rich and who doesn't own his product, or a "poor" farmer? I'll take the farmer.
While this individual was a talented agent who had built a nice customer following, I had to ask myself--Why hadn't he ever invested in the great product of real estate? It certainly could not have been an income problem. Even if that excuse were used, we all know 90-100% of a deal can be leveraged. I didn't know for sure, but this skilled agent gave me the impression he didn't have much money. He had income, but very little capital. It could have been that his divorce cleaned him out, financially speaking. Divorce is a major estate and wealth destroyer. (It is worth noting, the author of the book, The Millionaire's Mind, shows most millionaires have been married only once.)
With all of the benefits that accrue to real estate ownership, I am surprised by folks involved in the buying and selling of property on a daily basis who own no real estate. It is an enigma. Let's count some of the benefits:
1. Discounts andinstant equity earned when buying
2. Principle pay down on mortgage, monthly
3. Appreciation--unknown upside potential
4. Rehab and fix-up profits in terms of new equities
5. Forced savings plan (can't sell or tap equity as easy as more liquid investments)
6. Special capital gains and write-off advantages
7. Ability to pyramid gains with 1031 tax free exchanges
8. INCOME: RENTS
9. Ability to grow net worth with no tax unless you sell
10. Easy to purchase with leverage
I recently got an email from a company selling some real estate course. The main selling feature seemed to be his rant against being a landlord. It was almost like landlords are dumb because there are much smarter ways to make money. Again, this seems odd to me. Real estate is one of the greatest investments in the world. Why wouldn't I want to actually OWN it?
Buying and selling definitely has its place. But owning real estate is where you grow equity for the future. Contrary to all of the myths out there--owning real estate is where large estates are created. I am not ashamed to own property. Ownership, i.e., rental income is where freedom comes into being. It won't happen overnight, but give it 5-10 years with hard work, and you will launch yourself into a newfound freedom. I know it's hard for impetuous North Americans to think long term.
Back when I was fresh out of high school, I helped a friend and his family move. They had been renters all of their life. In fact, I estimate they had been renting for at least 25-years when I helped them move from one rental house to the next. The thing I remember is the totality of their life was in that moving truck that day. You see they didn't own any property; other than some worn out furniture and clothing--they had no equity. The sad thing was being long-term renters guaranteed them a life of virtual poverty. The bottom line: When you don't OWN real estate, it is extremely difficult to accumulate any net worth.
I will conclude with this. Years ago at our family business, there was a salesman who worked for one of our suppliers. He serviced our account (sold us Gibson appliances wholesale). He was one of the most honorable and decent guys you could ever meet. He was about 60-years old--about the same age as the real estate salesman mentioned above. He dressed very modestly, drove an average (boring) car. He looked like a regular, middle-class guy. His regular life was being a farmer. He did the sales job just for some spending money and to keep busy. As I got to know him, he disclosed that he owned 48 acres of farmland in a very up and coming area about 30 minutes from our business. THE POINT: The guy is a multi-millionaire--about 2 million. WHY? BECAUSE HE OWNED REAL ESTATE OVER A LONG TERM OF TIME! Real estate salesman who looks rich and who doesn't own his product, or a "poor" farmer? I'll take the farmer.
The Power Of Appreciation
As we enter this holiday season, and this time of giving Thanks, we are reminded of the “power of appreciation”. If you truly want to bring into your life everything that you desire, then start with appreciating all that you have now. Here’s how it works – you bring into your life whatever it is that you focus your thoughts upon. So, if you focus on all the lack in your life, you get more lack. But if you focus appreciation on all that you have, you get more of what you want.
We’re often asked: "But how can I appreciate not having something?" Our response is that your desires are the life-blood running through your veins. You always have new desires. You’ll never fulfill them all, because no sooner is one fulfilled that ten more are born. It’s what keeps you alive. Can you imagine living each day with the thought that you have already fulfilled every desire? That there is nothing else to achieve? Of course not. There would be no purpose to life. So desires are not the lack of something; they are the promise of what is yet to come. How exciting! All that you want - you’ll have.
Knowing that there is no lack – only desires yet to be fulfilled, you can relax, appreciate, and enjoy all that is already in your life. If you want to be happier, and fulfill your desires even quicker, try this exercise: take a few moments several times a every day to notice and appreciate some of the things in your life that you would miss if they were no longer in your experience. For instance, you might appreciate the home in which you live, the electricity which powers your house, the softness of your bed, the laugh of your loved ones, the sounds around you, the multitude of colors, the smell of Thanksgiving and Christmas dinner cooking, the PC on which you’re working. When you realize the importance these experiences play in your life, and the void their absence would make, it is easy to feel appreciative of all that you have.
Don’t mistake that we’re saying settle for what you have. To the contrary, we’re saying enjoy what you have, while fully anticipating the fulfillment of all you desire. The point is to fully appreciate everything you have, which will lead to experiencing everything you want.
We’re often asked: "But how can I appreciate not having something?" Our response is that your desires are the life-blood running through your veins. You always have new desires. You’ll never fulfill them all, because no sooner is one fulfilled that ten more are born. It’s what keeps you alive. Can you imagine living each day with the thought that you have already fulfilled every desire? That there is nothing else to achieve? Of course not. There would be no purpose to life. So desires are not the lack of something; they are the promise of what is yet to come. How exciting! All that you want - you’ll have.
Knowing that there is no lack – only desires yet to be fulfilled, you can relax, appreciate, and enjoy all that is already in your life. If you want to be happier, and fulfill your desires even quicker, try this exercise: take a few moments several times a every day to notice and appreciate some of the things in your life that you would miss if they were no longer in your experience. For instance, you might appreciate the home in which you live, the electricity which powers your house, the softness of your bed, the laugh of your loved ones, the sounds around you, the multitude of colors, the smell of Thanksgiving and Christmas dinner cooking, the PC on which you’re working. When you realize the importance these experiences play in your life, and the void their absence would make, it is easy to feel appreciative of all that you have.
Don’t mistake that we’re saying settle for what you have. To the contrary, we’re saying enjoy what you have, while fully anticipating the fulfillment of all you desire. The point is to fully appreciate everything you have, which will lead to experiencing everything you want.
Sunday, June 14, 2009
The Power Of Appreciation
As we enter this holiday season, and this time of giving Thanks, we are reminded of the “power of appreciation”. If you truly want to bring into your life everything that you desire, then start with appreciating all that you have now. Here’s how it works – you bring into your life whatever it is that you focus your thoughts upon. So, if you focus on all the lack in your life, you get more lack. But if you focus appreciation on all that you have, you get more of what you want.
We’re often asked: "But how can I appreciate not having something?" Our response is that your desires are the life-blood running through your veins. You always have new desires. You’ll never fulfill them all, because no sooner is one fulfilled that ten more are born. It’s what keeps you alive. Can you imagine living each day with the thought that you have already fulfilled every desire? That there is nothing else to achieve? Of course not. There would be no purpose to life. So desires are not the lack of something; they are the promise of what is yet to come. How exciting! All that you want - you’ll have.
Knowing that there is no lack – only desires yet to be fulfilled, you can relax, appreciate, and enjoy all that is already in your life. If you want to be happier, and fulfill your desires even quicker, try this exercise: take a few moments several times a every day to notice and appreciate some of the things in your life that you would miss if they were no longer in your experience. For instance, you might appreciate the home in which you live, the electricity which powers your house, the softness of your bed, the laugh of your loved ones, the sounds around you, the multitude of colors, the smell of Thanksgiving and Christmas dinner cooking, the PC on which you’re working. When you realize the importance these experiences play in your life, and the void their absence would make, it is easy to feel appreciative of all that you have.
Don’t mistake that we’re saying settle for what you have. To the contrary, we’re saying enjoy what you have, while fully anticipating the fulfillment of all you desire. The point is to fully appreciate everything you have, which will lead to experiencing everything you want.
We’re often asked: "But how can I appreciate not having something?" Our response is that your desires are the life-blood running through your veins. You always have new desires. You’ll never fulfill them all, because no sooner is one fulfilled that ten more are born. It’s what keeps you alive. Can you imagine living each day with the thought that you have already fulfilled every desire? That there is nothing else to achieve? Of course not. There would be no purpose to life. So desires are not the lack of something; they are the promise of what is yet to come. How exciting! All that you want - you’ll have.
Knowing that there is no lack – only desires yet to be fulfilled, you can relax, appreciate, and enjoy all that is already in your life. If you want to be happier, and fulfill your desires even quicker, try this exercise: take a few moments several times a every day to notice and appreciate some of the things in your life that you would miss if they were no longer in your experience. For instance, you might appreciate the home in which you live, the electricity which powers your house, the softness of your bed, the laugh of your loved ones, the sounds around you, the multitude of colors, the smell of Thanksgiving and Christmas dinner cooking, the PC on which you’re working. When you realize the importance these experiences play in your life, and the void their absence would make, it is easy to feel appreciative of all that you have.
Don’t mistake that we’re saying settle for what you have. To the contrary, we’re saying enjoy what you have, while fully anticipating the fulfillment of all you desire. The point is to fully appreciate everything you have, which will lead to experiencing everything you want.
The Only Three Reasons To Be In Real Estate
There are only three reasons to be in Real Estate. If any one tells you any differently, then they don’t understand real estate investing.
The three reasons to be in real estate are Cash Now, Cash Monthly and Cash Later. Let’s take a closer look at each one of them.
Cash Now. Let’s face it, we need money to live and pay the bills. With out this cash we would have to go back and work for “the man”. If you’re not a full time investor, this is a reason why a lot of people are afraid to quit their job and work for themselves.
Cash now is the money that you get from “Flipping” properties. Whether it be from Wholesaling, Rehabbing, Subject To, Lease Option or Pre-Foreclosures we need the cash from each of these investing models to put food on our tables and clothes on ours (and our children’s) backs.
Cash Now is good. Having rehabbed over 450 properties in just a seven year period, (I use each of the above methods to acquire my properties) I’m used to those big checks coming in. But then I realized that if I didn’t continue to get Cash Now through flipping properties, then I would not have any cash coming in at all. Which meant I was not as free as I thought I was.
So I changed my strategy. While those big rehab checks were coming in, I put some of money in my account so that I could live, and then I started to put the rest of the money in Apartment Houses.
Owning smaller Apartment Houses is virtually the same as investing in single family houses. If you’re doing your marketing, you run across Apartment Houses all the time. If you are like most investors, you probably just ignore them and continue to search for the next single family deal.
Apartment houses will give you greater Cash Monthly. In just a short time, you can build yourself a substantial passive monthly income just from your apartment houses. That’s how Robert Kyosaki does it in Rich Dad/Poor Dad.
Cash monthly will give you freedom. Freedoms to do what ever you want when you want. I’m not telling you to stop buying and flipping single family houses, that’s Cash Now. I’m saying to get Cash Monthly (apartment houses), use some of your Cash Now (single family flips) and buy yourself some freedom!
Pretty soon you will be building an empire. You’ll have enough Cash Monthly to be able to take a month off in the summer or what ever else your freedom desires! If you were only flipping single family houses and you took a month off in the summer, you wouldn’t have any income coming in.
Do You See How Cash Monthly Will Give You Freedom?
You can get some Cash Monthly from owning single family houses long term but not as much and not as fast as owning smaller apartment houses. And it’s a lot riskier to have all of your money in single family houses.
What happens if you lose your tenant in your single family house? You loose all of your income. You’re going to have to dip into your own savings to pay the mortgage until you get a new tenant. That hurts!
If you loose a tenant in a three family house, you’ve only lost one third of your income. The other two floors will cover your mortgage until you get another tenant. That’s just one of many reasons that owning small apartment houses is smarter that owning single family houses, but that’s another article all together.
Now that you have Cash Now and Cash Monthly, Cash Later takes care of itself. It comes when you sell, exchange or refinance those apartment houses somewhere in the future.
You see, with apartment houses you have an appreciating asset. No only is it appreciating every month but your tenants are paying off your mortgage. So between the appreciation and the mortgage pay down, your equity just gets bigger and bigger!
You can sell your property and get a boat load of cash. If it’s creating a lot of Cash Monthly, you may want to keep those checks coming in. If so then you will want refinance to get you cash out.
Not 100% of your cash, which will only get you in trouble. You should take out about 75% of your cash leaving 25% equity in the building, that way if there is a down turn in the market, your protected. Not only that, at 75%, you should still have a decent positive cash flow. Did you know that you do not pay tax on any of the money that you take out during a refinance?
Now take that money and go buy some more apartment houses and get some more Cash Monthly! In doing so, these apartment houses will start appreciating and the tenants will begin to pay down your mortgage for you. You’ve just increased your net worth because you have increasing equity in one or two more buildings instead of the building that you started with.
Can you see how your empire is being created? Can you see how it can be created in a short time? Holding single family houses will make you money. Holding apartment houses will make filthy stinking rich! Which do you prefer?
The three reasons to be in real estate are Cash Now, Cash Monthly and Cash Later. Let’s take a closer look at each one of them.
Cash Now. Let’s face it, we need money to live and pay the bills. With out this cash we would have to go back and work for “the man”. If you’re not a full time investor, this is a reason why a lot of people are afraid to quit their job and work for themselves.
Cash now is the money that you get from “Flipping” properties. Whether it be from Wholesaling, Rehabbing, Subject To, Lease Option or Pre-Foreclosures we need the cash from each of these investing models to put food on our tables and clothes on ours (and our children’s) backs.
Cash Now is good. Having rehabbed over 450 properties in just a seven year period, (I use each of the above methods to acquire my properties) I’m used to those big checks coming in. But then I realized that if I didn’t continue to get Cash Now through flipping properties, then I would not have any cash coming in at all. Which meant I was not as free as I thought I was.
So I changed my strategy. While those big rehab checks were coming in, I put some of money in my account so that I could live, and then I started to put the rest of the money in Apartment Houses.
Owning smaller Apartment Houses is virtually the same as investing in single family houses. If you’re doing your marketing, you run across Apartment Houses all the time. If you are like most investors, you probably just ignore them and continue to search for the next single family deal.
Apartment houses will give you greater Cash Monthly. In just a short time, you can build yourself a substantial passive monthly income just from your apartment houses. That’s how Robert Kyosaki does it in Rich Dad/Poor Dad.
Cash monthly will give you freedom. Freedoms to do what ever you want when you want. I’m not telling you to stop buying and flipping single family houses, that’s Cash Now. I’m saying to get Cash Monthly (apartment houses), use some of your Cash Now (single family flips) and buy yourself some freedom!
Pretty soon you will be building an empire. You’ll have enough Cash Monthly to be able to take a month off in the summer or what ever else your freedom desires! If you were only flipping single family houses and you took a month off in the summer, you wouldn’t have any income coming in.
Do You See How Cash Monthly Will Give You Freedom?
You can get some Cash Monthly from owning single family houses long term but not as much and not as fast as owning smaller apartment houses. And it’s a lot riskier to have all of your money in single family houses.
What happens if you lose your tenant in your single family house? You loose all of your income. You’re going to have to dip into your own savings to pay the mortgage until you get a new tenant. That hurts!
If you loose a tenant in a three family house, you’ve only lost one third of your income. The other two floors will cover your mortgage until you get another tenant. That’s just one of many reasons that owning small apartment houses is smarter that owning single family houses, but that’s another article all together.
Now that you have Cash Now and Cash Monthly, Cash Later takes care of itself. It comes when you sell, exchange or refinance those apartment houses somewhere in the future.
You see, with apartment houses you have an appreciating asset. No only is it appreciating every month but your tenants are paying off your mortgage. So between the appreciation and the mortgage pay down, your equity just gets bigger and bigger!
You can sell your property and get a boat load of cash. If it’s creating a lot of Cash Monthly, you may want to keep those checks coming in. If so then you will want refinance to get you cash out.
Not 100% of your cash, which will only get you in trouble. You should take out about 75% of your cash leaving 25% equity in the building, that way if there is a down turn in the market, your protected. Not only that, at 75%, you should still have a decent positive cash flow. Did you know that you do not pay tax on any of the money that you take out during a refinance?
Now take that money and go buy some more apartment houses and get some more Cash Monthly! In doing so, these apartment houses will start appreciating and the tenants will begin to pay down your mortgage for you. You’ve just increased your net worth because you have increasing equity in one or two more buildings instead of the building that you started with.
Can you see how your empire is being created? Can you see how it can be created in a short time? Holding single family houses will make you money. Holding apartment houses will make filthy stinking rich! Which do you prefer?
Subscribe to:
Posts (Atom)