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A Case for Diversification

August 28, 2015 by  
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Wow! What a wild stock market we’ve had the last few days. Over a trillion dollars in lost value. Can you imagine having virtually all your asset held in stocks? I was asked the other night at a party, by a person that apparently was hurt pretty badly by this, how much money this huge sell off of stocks cost me. I answered that it had virtually no impact on my assets and or net worth. How is this possible? Well, it’s simple … I own just one small position in one publicly traded stock. Maybe in the long run the market drop will have an effect on real estate property values–that’s where I have almost all my net worth– but I very much doubt it.

Yes, I used to be a stock broker many, many years ago and would buy and sell stock for myself frequently, but I learned the hard way that even very smart people can lose money very quickly in the stock market. Even if you buy great stocks and those companies are making money and doing well, if the overall market takes a big hit like it has done the last few days, your good strong company stock usually goes down with the market. One of the big reasons I moved almost all my assets into improved, rent generating real estate is because I had a least some control over the asset that I owned. You see, with stocks, you not only don’t control the company or the people that are running the company, but you have no control over what the overall stock market is doing.

You may be thinking, “Okay, I agree with all that but putting my money in improved real estate takes a lot of work and effort.” And you would be correct. It does take work but the rewards can be so great and much of the work can be turned over to others. I’ve certainly found that to be true and the huge surprise and benefit to me was that I found people that do a better job finding, fixing and managing the properties than I do, or I should say “did”. I’m a big time delegator now.

At a minimum, I would encourage you and anyone that will listen to not put all your eggs in that one ‘stock basket’. Diversity is the smart thing to do and, yes, even though I own very little stock, I do make sure I diversify my asset by owning different kinds of real estate. I own everything from triple net lease buildings with national company tenants to development of storage units to small retail strip malls and even a bit of raw land. A bit of cash always being set aside is a good idea too.

I encourage you to take time to plan out your asset strategy. Don’t be like the majority of Americans who seem to spend a lot more time planning their vacation that they do planning the financial life!

 

 

Money vs. Love

August 21, 2015 by  
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Last weekend we had our yearly Haroldsen/Baird reunion at our home and, oh, what a feast we had! We stand and sit around telling family stories and retelling the classic and most choice stories of past get-togethers and trips. Yes, there was some great food too but when it came down to it, it really was more a feast of love and interaction. That reminded me of a very important idea that I’d like to remind all of you about too.

For years I’ve preached over and over about the basic and best formulas for going out in the world to get and keep lots of money and I think that’s very important. Succeeding in financial matters really can improve and lift your life and those loved ones around you.  But, never let that ‘money getting’ get in the way of love.

Recently I listened to an author who had just written a book about that huge mine disaster that trapped 33 miners for 69 days, back in 2010 in Chile. When those survivors finally escaped that pit of hell, what they said was very instructive for those who would listen and learn from their experience.  Did any of them think about their houses or their money while they hoped and waited to be rescued?  No, they did not.  Their minds and hearts were fixated on their loved ones … their wives, kids, parents and other people they loved. When our lives are on the line, most everyone realizes what the most important part of their existence is and money is quickly and easily pushed out of our heads by thoughts of those that we love and those that love us. But we don’t need to wait until something terrible happens to remember what really matters.

Back when I was giving seminars, I used to ask the audience, by a show of hands, how many people would like to make and have a net worth of one million dollars. Just about every hand in the audience went up.  I would follow the same line of question with higher numbers: Who would like 10 million and then 100 million dollars? About the same number of hands went shooting into the air.  Then I would ask the question with a bigger number but with a much bigger difference: How many people here would like to make and have a billion dollar net worth, but when you got to the top of that huge financial mountain you arrived there only to find out you didn’t have any friends or relatives that liked you, and certainly didn’t love you, and none of them wanted to be near where you were—you would be totally cut off? There was always a few hands that were raised, very few, but all of those that had their hands in the air were, well, teenagers.

I’m not saying that you shouldn’t set your goals high and go after your fortune and keep on building it bigger and bigger. I mean only that you should think about all the good you can do in the world with that fortune. Always, always, always remember that giving and receiving love is infinitely more important and lifts your soul and your happiness in life to a much higher level than any amount of money ever would. Then live your life giving focus to the things that really matter as well as your big financial goals.

Measuring a Country’s Greatness

August 14, 2015 by  
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The subjects of my blogs are mainly about Health and Wealth but this week I’ve just got to say something about the race for the White House.  I don’t think I’ve ever seen anyone that seems more non-presidential than the guy with the bad hair who never talks with any specifics and who acts like a child.  Have you noticed how Mr. Donald Trump loves to call people names and constantly tells people how great he is?

Yes, we all did that when we were kids, but that’s what kids do and most of us grow up and stop doing those kind of juvenile things. He reminds me of Vladimir Putin who also just can’t seem to get over himself and how wonderful he thinks he is. Most of us, as we age, realize that we are not near as important as we once thought we were.

And how about Trump’s big slogan for his campaign: I’m going to make American great again”. I would love to ask Trump a few questions if he would agree to give me a yes or no answer.  The first question would be, “Mr. Trump, do you think America is a good country?” The next question would be, “Do you think America is a VERY good country?” And lastly, “Don’t you think America is a great country?”

Personally, I don’t think America ever stopped being “great”.  In fact, it seems to me that our country gets better every year.  I’ve been to 84 countries in my life and lived a couple years in the Middle East in Ankara and Turkey and a couple years in England and Wales, and from my distant and far observations, it has always been a pretty great country.

Are we perfect? Of course not. Are we the best country in the world?  That is a pretty broad question. Admittedly, we are not the best in everything but we do excel in quite a number of important areas—our firms are at or near the forefront in technological advances, especially in computers and in medical, aerospace, and military equipment.*But just like a normal human being, we need to keep working at it to make us and our country better.

Some people would disagree with me when I say our country gets better every year and might point out the many terrible things they see every day and night on the news.  My response to that is pretty simple.  The news, especially the cable news that runs 24 hours a day, is in the business of making money and they need to fill up those 24 hours and they know they get a much higher viewership when their news stories are sensational.  Watching the news gives us the impression that things are much worse than they really are.

Since 1980, our murder rate has dropped by more than half and our gross domestic product, a primary indicator of economic health, is 6 times what it was. The US is recognized as having the largest and most technologically powerful economy in the world and we are second in the world only to Switzerland in quality of life indexes.* So I say to my readers and to Mr. Donald Trump, “America is already great and I am proud to be an American!”

*Statistics and quotes from Nation Master/www.nationmaster.com

The Advantage of Honest Answers

August 7, 2015 by  
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There are certain questions that most of us hear nearly everyday. They go something like:

  • How are you doing?
  • How are you feeling?
  • How’s everything in your life these days?

And what is our usual response?

  • I’m doing fine.
  • Oh, I feel pretty good.
  • Things are moving along.

The answers that you normally don’t hear are:

  • Not too good today.
  • Oh man, I am feeling very depressed.
  • Things are not going well in my life right now.

In our polite society we usually don’t dump our problems on others, not even our relatives or close friends. In most situations, that’s a good and considerate thing.  But sometimes it might be a good for you and me to open up and tell the full truth, voice the negative or tough things that are going on in our lives and in our minds. Why? Because many times friends and relatives can be a big help.

It’s kind of strange that it’s perfectly acceptable in our society to tell someone that you have a cold but it’s a no-no to tell a friend you’re feeling down or depressed. Both conditions are real and there are treatments for both.

Recently, I met a longtime friend who said in the usual manner, “Hey Mark, how are you doing?”  Suddenly, and to my surprise, I found myself telling him the truth, saying “Man oh man … I’ve really been depressed lately.”

Next thing I knew I was quickly apologizing for dumping my personal problems on him. But to my surprise he was not taken aback by my honesty but rather told me in turn that he too gets down and depressed.  I was surprised to hear him say that because he always seems to be on top of the world and so very happy.

He then gave me some very good advice on things I could do to pull myself out of my slump and in a very short order I began to feel better.  The advice he gave me were things I already knew but had slowly stopped doing. Things like eating foods that improve your mood and taking supplements like 5HTP and Saint John’s Wort. And just as important as all the rest … pushing myself to stay busy and keep connected to friends and relatives.

I think because I am a healthy and very wealthy person, people look at me and think I am always upbeat and positive and never get depressed.  But, many times the problem is my advantages in life also make it difficult to feel motivated–I don’t have to work and I don’t have to do anything if I don’t want to. Even though that might seem to be a very good thing, it can be such a bad thing and can almost drive you crazy.

We all need to keep busy. We need to stay engaged and connected to friends and relatives. We also need challenges which mean constantly setting goals for ourselves and staying on track as we pursue those goals.  Yes, I am preaching an old subject to you but I am very definitely preaching to myself! Because we all need a little reminder now and then. And to get that, sometimes all it takes is giving a friendly question an honest answer.