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The 100% Return Goal

January 18, 2019 by  
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As we begin a new year it’s a very good time to remember the basics, specifically the basics of financial independence through which you make and keep your own fortune.  It’s so easy to forget the basics, especially when we are all caught up in the details of our daily lives, even those details that are involved with building our wealth. For example, if you have a big problem with the plumbing at a rental property or the property taxes just got bumped up, it’s easy to focus on just that, but that can get you frustrated or make you kind of space out on your overall plan.

What you should not forget is that you have to continue to look at the big picture, looking for ways to take advantage of leverage whereby you could earn as much as 100% of your money due to compounding. I’ve certainly been there and done that. Even on the very property that is giving me fits, I many times have failed to step back and realize that my equity on that very property has already exceeded a 100% return on my money and I should be motivated and reminded to keep doing that.

There is a simple example that I used in my fist book, How to Wake Up the Financial Genius Inside You, where I showed how 1 single penny a day compounded at 100% a day turns into just over $339 million on the 35th day alone. Now I know there is no way you can compound your money at 100% per day, but it is possible to compound your money at 100% per year, especially in the first few years. The key to those huge numbers is using other people’s money (your leverage). So, maybe only 10, 20 or 30% of the price you pay is with your own money and then the rest is in a loan from the bank or the seller for the balance. It’s not only possible but many people are doing just that, every day, including myself and many people that I know and have helped.

I do know that finding beat up properties these days can be a bit more difficult, depending on where your market is, but things change and prices go up and down and you and I need to always be looking for those bargains, especially those properties that need fixing up, the ones I like to call “dirt bag properties”. Then, always remember that good ole leverage formula:
If your down payment is only 10%, and you improve the property enough to increase the value by 10% you have made a 100% return on your money. That formula is a little simplistic since it doesn’t take into account your expenses, but you can keep those pretty darn low if you do most of the work yourself. Just don’t let the goal of a 100% return on your investment scare you away because it seems too difficult. If you can get even part way there, say just a 30% return on your money per year on only $10,000, that fraction of the big goal will still add up to over $1,124,000 in just 18 years.

My big point here is that we must keep the big picture in mind and remember that those potential returns are there. If you do, it becomes easier to not be deterred or discouraged by those plumbing issues, property tax increases, or other relatively minor problems.  Keep your eye and your dreams focused on the big prize, because it is all together very possible to achieve that big goal.

My Words Out Loud

January 11, 2019 by  
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I have something very special for you today. Please take a listen to this pod cast I was on recently. There are a few things I share on it that I think can be very helpful to most people. I hope you like it and, if so, please share with others. Thank you so much for taking time to listen. This kind of thing is part of what I am doing to really try to be of help to others. Maybe it’s my age but I am all about sharing and helping these days!

 

The interviewer is Michelle Brown, a fellow Salt Lake City resident who teaches Life Story writing workshops. Get a nice warm beverage and sit back for a really interesting conversation. I hope you find it helpful and motivating!

 

Reviewing and Improving on the Past Year

January 5, 2019 by  
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Wow, where did the 2018 year go?  It seemed to go faster than any other year of my life. How about you?

But what really got to me was what I wrote in my journal back on February 27, 2018:  “Now in Lihue, Kauai house … Kimbo [my nickname for my wife Kimberly] is working so hard to get the house in perfect condition as to justify the $4.5 million price we have it listed for… Now at 46 days away from age 74, I hope I’ve learned a little more about life and living.  I still need to focus on living in the great now moments of life and need to practice more of what I preach and write about … living in the present, self-talk and self-affirmations … and write them down.”

In that journal entry I made this list:

1. I am living in the now

2. I love my life now

3. I love my wife now

4. I love being semi-retired

5. I gain much of life from my writing and helping other people

In that same entry I finally came to this conclusion:

“In 6 days, we head back to Utah – in my head I keep thinking about that future event and have been counting down the days. I need to stop doing that and enjoy the great right now! I mean heavens, it’s pretty darn nice, right here and right now. Beautiful, warm, wonderful view of the great blue ocean and green mountains of Kauai … so I will now take all of that in and live in the ‘now moment’.  Ok I am doing that right now and it feels great!”

It was great to have realized what I needed then, but the realization didn’t quite turn into action. Recently, on Dec. 31, 2018, I made another, related journal entry: “I re-read some of my comments from last year and it hit me kind of hard how I said I must, and want, to live more in the present moment or the great wonderful ‘right now” and I realized I just didn’t do that very much. So, that’s now back on my new year’s resolution list for 2019. I’m going to do much better in 2019!”

I know that I’ve written and preached about keeping a journal of your life and reading my own past comments really shows me how important it is to do just that. You can coach yourself and remind yourself over and over again about what you need to work on and that, at least to me, is very important to improve and expand and make your life better and better. Yes, I know that we all have to think of the future and make plans and set goals and review our past, but after we’ve done that, we need to spend more time in the “great right now moment”.

I hope you agree and maybe what I’ve learned here will help you. I’m pretty darn sure it’s already helped me and will make me more aware of living in the now moments and how to love and enjoy 2019 more than last year, even though I fell short of my stated resolution. So, let’s all double down and make 2019 the best year EVER!