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Be One of the Smart Ones

November 10, 2019 by  
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So, in last week’s post I told you a bit about the lady in Paris that suddenly found out one of the paintings in her house, one that she thought was just an average painting (the one you see above), was extremely valuable and it went on to sell for $26 million dollars!  Wow, what a shock that must have been for her! But have you read that many people who all of a sudden win the lottery or suddenly come into a huge fortune blow the money in short order or are scammed out of it? The problem is that most of the time, people who haven’t earned the money over time are clueless and just don’t know how to handle it. Most of these people start spending it like crazy and or they are taken to the cleaners by scam artist.

Compare that overnight super-rich person to a person who has worked for years and saved every extra dollar they could. The smart ones don’t go out and buy a brand-new car that will immediately drop in value. The smart ones buy a used car and put whatever extra money they have into savings. Then they slowly build up enough money to buy an asset that goes up in value and, if they’re really smart, when they sell that asset at a profit, they reinvest that profit in another appreciating asset. Over the years, those small savings and investments can grow into a fortune.  And if you have made your money that way, then you most likely won’t be like those who suddenly came into big money and spent it all or got scammed out of it.

It will be very interesting to try to follow the Paris lady and see if she goes crazy with her money, following the typical lottery winners. Please, Paris lady, be cautious and wise with that $26 million. Don’t put your money with someone else who makes promises of huge returns.

Years ago, I met a guy who told me that he could give me a 10% return, per month, on my money, guaranteed! Remember the old saying, “If it sounds too good to be true, it probably is.” I had a friend who had invested about $300,000 dollars with this guy who said it was going to get a great return and guaranteed it. I was pretty darn sure it would not be even close to that. And yes, my friend lost his entire investment, and the bad guy in now serving time in prison. Not that him being in prison gives my friend any of his money back.

So, I sure hope you see the huge benefit of saving all the dollars you can and investing them wisely. Do the research carefully. It’s my advice and experience that you should invest your savings in income producing real estate. It almost always goes up in value and even if the appreciation is very slow, if you have purchased wisely, you will have tenants paying off the mortgage. That’s what the smart ones do!

 

Compound Gratitude

October 20, 2019 by  
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Receiving thanks and appreciation from people you have helped can be such a huge reward and is such a great feeling!  Last week I wrote about super successful Scott Keller who was donating 10 million dollars to a University. Scott has thanked me over the years for sharing some of what I’ve learned about financial formulas, motivation and inspiration.

When I was writing my blog about the great feeling of helping others, it brought quickly to my mind and heart the many, many times I’ve received some huge “thank you’s” and credit from Craig D. Horton of Medford, Oregon. It started many years ago, shortly after I wrote my first book and has continued over the years. So, I sent an email to Craig after thinking about him and his generous and great appreciation for the help I gave him as he pursued his fortune. Here are some of the words he wrote back to me.

“Thanks Mark for this continuous journey of excellence as well as persistence. Your mentorship to myself and my wife Jane means a lot personally to our family.” He went on to say, “In my early investing days, I was partners with someone who subscribed to ‘The Financial Freedom Report’, which was an investor magazine for real estate people that Mark O. Haroldsen published … I read each monthly issue and devoured the content, especially the Subscriber Success Story. I subsequently read the following Mark O. Haroldsen books: How to Wake Up the Financial Genius Inside You; Goals, Guts, and Greatness; The Best Real Estate Deal I Ever Did. All are excellent books that every real estate investor should read.”

Wow, those words of thanks to me were worth more than money!  After reading that, I realized that I needed to send him my latest book, How to Ignite Your Passion for Living too!

He went on to say, “The major influence on my life of the written work and seminar experiences from Mark O. Haroldsen has been the concept of compound persistence. That principle simply says if you think long term with good goals, good support, and a good plan you will succeed as long as you always stay persistent. This has been my experience from the teachings of Mark and his team in over 40 plus years of investing. I have seen this principle also work with other investors as well.”

He and his wife Jane own a property management company, Medford Better Housing Association. Craig also told me how many rental houses he owns as well as a nice size apartment building. And then he closes the email with, “Your ‘Financial Freedom Report’, Compound Persistence Principle Guy … Craig D. Horton.”

I’ll close this blog by saying this: THANK YOU, THANK YOU, AND DOUBLE THANKS, TO YOU CRAIG D. HORTON FOR LIFTING MY SPIRITS, MY BRAIN, AND MY LIFE!

The Thank You High

October 13, 2019 by  
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It never ceases to amaze me the super, wonderful, and fulfilling feeling I get from helping others. I’m sure you know what I’m talking about and, no doubt, you have received that great brain stimulation and wonderful high when someone gives you sincere thanks and compliments for helping them. I also get lots of little kicks every time I give kids a lucky – as I call them – $2 dollar bill. When their little faces light up, you’d think I gave them a thousand-dollar bill. Most of the time the parents don’t even need to tell them to give thanks to the old guy that gave them the $2 dollar bill.

A few days ago, I was shocked to read that Utah’s Scott and Karen Keller had donated 10 million dollars to Utah Valley University for a new business building which will be named after Scott Keller. I was super impressed because I knew Scott years ago and coached him on financial matters. And here is the Big Brain Booster (let’s call it the BBB) – he has always given me tons of credit for his huge financial success.

Here’s what he wrote me in an email: “Mark, I was able to make this contribution [due to] the things you helped [me with] to launch my career. Thank you very much again, and again, and again” I immediately thanked him for giving me so much credit and he wrote right back saying, “Dear Mark, I make no apology for those that have helped or inspired me along the way. I always want to give credit where credit is due. It’s the team, the ‘we’ NOT the ‘I’.” Then that clever little guy Scott made me laugh when he added, “Now hang on cowboy, just don’t be asking for a cut. 🙂 Thank you very much.   All the Best, Scott C. Keller.

Like I said, to me there’s nothing like the great satisfaction of helping others and their great gratitude and feedback gives me a high that is so much greater than money. Hey, I’m not saying that making tons of money isn’t satisfying but the thanks and sincere appreciation are so wonderful and last forever.

Ok, I know it’s kind of selfish, giving and helping others since we get such great feelings and satisfaction from it, but hey, isn’t that kind of a good selfishness?  I have received so much positive feedback and thanks-you’s I just want to give more and more.

There is a great guy from Oregon who has sent me many, many thanks over the years as well. I must tell you a bit more about good ole Craig D. Horton in my next post.

 

Money and Meditation

August 8, 2019 by  
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If you have been reading my blog for years, then you know that I started out mainly writing about money, money, money. I wrote about how to make it and how to invest it for the best returns. Over time, I have expanded my subjects to include physical and mental health because, as we all know, without good health, tons of money may not help you at all, or at least not much.

Our brains control our physical bodies much more than most people realize. Years ago, I found an explanation of why the brain can control so much of our lives in Time magazine. A professor at the University of Wisconsin, Richard Davidson, who Time magazine had honored as one of the “100 People Who Shape Our World”, was actually asked by the Dalai Lama to study the connection between the meditative state of mind of his Buddhist monks and their emotional and mental health.

Davidson first hooked 128 electrodes to the head of a French-born monk, Mathieu Ricard, and recorded an immediate increase in the gamma activity when the monk began to meditate. Later studies with a control group of students only lightly trained in meditation showed the monks produced gamma waves that were 30 times stronger than a control group. Wow, that is HUGE!

But what does all this mean? Simply put, this and other research unveils the real possibility that the brain, like the rest of the body, can be altered intentionally. Just as we build muscle through exercise, we can also build our mental capacities that can lead to better brain function and an increase in essential cognitive functions, including memory and perception. This all creates a more positive mental state–and that’s what in turn creates more productive gamma brain waves.

This discovery tells me that as I do more meditation, I will gain a better functioning brain which could help me be a much better investor. I do believe that by pumping my brain up through meditation, I can make better real estate deals and manage my money much better. How about you? Go ahead and try some meditation and see what it does to your brain.

One last comment. Or, I should say that I’m going to do a little bragging.  I’ve always been impressed by the Dalai Lama and many years ago I had the great privilege of escorting the Dalai Lama from his hotel room to a huge ball room and then I introduced him to the audience. I will never forget the great feeling and gratitude I received from doing that introduction and getting to know him even just a little bit.

Always Living Large

June 28, 2019 by  
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So, I’ve been having a bit of a stressful but exciting week as I work on a big real estate deal. Yes, sometimes, even though I’ve been doing this for decades, making deals can be a little taxing but as Mitt Romney, former GOP candidate for President once said to the graduating students at Utah Valley University about experiencing a fulfilling and purposeful life,  “One thing you’re going to have to do is live a ‘large life’”. What great advice. That is something all of us need to pay attention to. We need to go out and do it and do it our entire lives.  I wrote about this some 4 years ago, but I think it’s worth a rerun. So, here’s basically what I wrote in May of 2015:

So many times, we hesitate to “live large”. Why? Because most of the time we fear that we will fail. “Failures don’t have to define who you are,” Romney had gone on to say in that Utah Valley University speech. “Through all my occupations, I have experienced successes and failures. I am asked what it felt like to lose to President Obama. Well, not as good as winning. Failures aren’t fun, but they are inevitable.”

How about you?  Have you racked up a lot of failures or just a few?  It seems to me, from my experience, that the number of failures I’ve had is in direct proportion to how large I’ve tried to live.  So, yes, I’ve had a ton of failures but some of those have led to some huge successes. And the reason for those successes was that I learned so much from my failures.

I remember one huge loss that I learned a valuable lesson from which lead me to some very, very large successes.  What happened was I decided to lend a large amount of money with a restaurant as collateral.  Big mistake on my part! Why? Because I don’t know much about that kind of business so if it failed, I certainly wouldn’t know how to run it. And guess what? It did fail and I lost almost all of what I had loaned.

What did I learn?  Well first I found out that restaurants have a very high rate of failure and second, I learned that I shouldn’t stray from what I know best.  Not that I shouldn’t ever loan money but if I do, I should loan it on assets that I understand as well as being on improved real estate which, ideally, would also be income producing.

I forged ahead and made many millions of dollars’ worth of loans that were backed up by real estate and was very successful.  Later I discovered that I could do even better by owning the right kind of income producing properties. I also, very successfully ventured into the development of condos and warehouses, where the profits were even bigger although they did come with increased risks but in that case, those were risks I was willing to take.  And much, if not most of that success, came from lessons learned from my failures and my trying to “live large”.

Romney’s words are not just for graduating students. They are wise words for us at any age!

Daring to Dream Big

April 12, 2019 by  
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Years ago, I dreamed of being wealthy. I studied the lives of the rich, especially the ones who started from scratch. I mean, I really studied them and analyzed everything they did and how they did it. I discovered that millionaires are not a hundred times, or even ten times, smarter than you and me. And they aren’t working ten times longer or harder. How could they? There are only 168 hours in a week — no one gets any more than that. The difference was an honest to goodness and simple wealth formula that, if followed, works.

Before I discovered this wealthy formula, I lived in Denver, Colorado in a cramped and tumbled down house at 2545 S. High Street, near the University of Denver. I felt desperate and forced into a corner. I had to borrow a $150 from my father and another $150 from my father in law just to buy groceries and help pay the rent. If that wasn’t enough, I was several thousand dollars in debt, but I still kept studying the lives of the rich and dreaming of being a millionaire.

Then it happened. I met Larry Rosenberg, a man who became my mentor and showed me the simple formula that had made millions for him. He convinced me that I could do the same thing.

I began to apply the formula I had been shown. The results were amazing! I couldn’t believe how simple it was. In fact, it seemed too simple. (Please note, I said simple, not easy!) It did take work but oh, how that work was so very worth it!

For the next 3 ½ years, I worked very hard to refine and improve the formula that I’d been shown so it would be easier to get quicker results. As I did this, my assets and income multiplied very rapidly to the point that I didn’t have to work at my regular job. I quit!

The simple formula that I had been shown was to leverage income producing real estate —-as in small houses and apartment buildings. The key to building my fortune was to find run down properties that I loved to call “dirt bag properties”. These were properties that I could fix up and improve the value by 10 or 20 percent and then I could turn that 10% or 20% increase in value to 100% return on my investment, because of that great thing called “leverage”.

And as I’m sure you know a 100% return on your money can and will increase your net worth quite quickly! In my experience leverage income producing properties is the most reliable, fastest, and safest method of making big time money. Most people have a little bit of that “leveraged real estate” in the home they bought. But if you have to go a step further and but some dirt-bag or rental properties and fix them up and make those huge 100% percent returns. If you buy right, it will work wonders for you.

 

The Shotgun Investment Strategy

March 8, 2019 by  
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In my opinion, and from my experience, the best type of asset that lends itself to forced improved value is good ol’ real estate, and specifically properties that need a face lift. These are beat up houses, duplexes, apartment buildings or what I have often refer to as dirt bag properties.

The key is to just do a face lift, not perform bone surgery, so you would need to find properties that are run down mainly on a cosmetic level. You really don’t want a property that needs to be fully rewired, have plumbing pulled, or the foundation replaced. I look for properties that haven’t been painted for 25 years or the front lawn is dead and the fence is falling apart. It may just need new carpet and window coverings to turn it around. Those kinds of properties can make you a fortune and can do so in a few short years.

I do want to add that when I was introduced to leverage, I was a stock broker. I began trying to use leverage with stocks and bonds, but I found out very quickly that the real problem was I really couldn’t fix up a stock and I didn’t have any control over the company whose stock I was buying or the stock market itself. I did, however, have some control over a little beat up house that I would buy, even though that is where the real work began.

Once you have found the dirt bag property, the next big chunk of work is actually doing the fix up to greatly improve its value and give you those big fat returns on your invested dollar. So how do you find those fixer uppers and exactly what kind of work does it take?

There are several ways this can be done. You could drive through the right neighborhoods that are a bit run down and in your price range, but that is the hard way to do it and it takes a ton of time. Since time is one of those things that none of us seems to have enough of, I recommend what I call the shotgun method. The concept of a shotgun is that when a hunter shoots at a bird the shotgun blasts hundreds of BBs that spread out as they speed toward the target. Most of those BBs miss the mark but it only takes one or two BBs to bring down the target. Likewise, my shotgun method of finding the right properties is very efficient and a real time saver and it only takes one or two hits to score your target.

All you do is use the internet to observe all the for-sale properties that even roughly fit your specs and then make low ball offers which would be around 20% to 25% lower than the asking price. You do this without even driving by the property. The real key here is to be sure you have a “subject to” clause in your offer, which basically says that this offer is good only if certain conditions are met. Those conditions can be acceptable financing or even something simple like “subject to my spouse or partners approval.”

So now when you shoot your shotgun at many dozens of properties each week or each month, you only get in your car and drive by and/or do an inspection after you get a counter offer or, sometimes, an actual acceptance on your super low-ball price! It does happen once in a while!

Using the shotgun method works if you make enough offers. Eventually, you’ll score a property and then the physical work begins. It’s not easy but it’s simple and, most importantly, increasing its value is within your control.

When You’re Not Brave

March 1, 2019 by  
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This week I want to continue on this big thing we all know and have experienced called fear. Let me start by asking, what do we know about these fears?

Well, first remember that fear is a natural emotion, one that must be understood, confronted, and controlled. So maybe when you have great fears for whatever reasons, this would be an appropriate time and place to “fake it till you make it”. Some people who know me are surprised to learn that I have been very fearful many times but have gone ahead and done the “fake it” thing.  Maybe we ought to whistle a happy tune and no one will suspect you and I are afraid. If we pretend to be brave, acting the way a brave person would act, the results can be amazing.

Consider the many times you have lain in bed thinking about some tough assignment, something that you are slightly or very fearful of doing. If you’ve never done it before, quite naturally you are reluctant and anxious. For example, if you are giving a speech for the first time to some very important people, or asking a banker for a huge loan, or presenting an offer to buy a particular property for a ridiculously low price. Or it may be visiting a new state, city, or country, or being a master of ceremonies. If you are normal you become very fearful with these new situations.

Whatever you have to do on that particular day as you lie in bed, if you have a few fears of doing it, they will only intensify the longer you lie there and think about it. What will overcome those frightening thoughts and imaginings is action. Even if it is incorrect action, get up, get going, and get the blood running and the brain thinking. Take a shower, get on the phone, write a few text messages and emails, go see people, or set up a lunch appointment. Make things happen!

Action overcomes fear because most fears are in your mind and action lets the physical part of you dominate for a while. The physical side of you needs to dominate because the mental side of you, in many cases, has become too introspective and too analytical. We tend to analyze so many things to death. We have all heard of “analysis paralysis,” which is more than two cute rhyming words.

Sometimes we think too much. In today’s educated, deep thinking and analyzing world, it sure seems that we have a lot more planners and thinkers and analyzers than we do action people. Obviously, we do need some kind of plan, but the greatest plan in the world is worthless without action. I would much rather have a mediocre plan and some real action people to carry it out than the most phenomenal plan in the world with a bunch of inactive and do-nothing people.

Action really is the critical key to huge success and accomplishment. I have never met a person in my life who has total confidence in themselves and doesn’t experience fear from time to time. There is not one of us human beings on this planet who won’t have some serious questions about their own ability to succeed in every new venture they start. We all need to remember that and as the great title of Susan Jeffers book says, “Feel the Fear and Do It Anyway”!

Smart Money Hedges Bets In Tough Times

February 15, 2019 by  
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We’ve had quite a few very good years, economically speaking, and we may very well have a few more to come. There are, however, some warning signs that things are starting to change but it’s a slow change. Here are few things the so-called experts are predicting that, in my opinion, are very likely to happen:

  1. European expansion will slow down.
  2. Japan’s recovery will remain weak.
  3. China’s economy will keep decelerating.
  4. The rate of inflation will stay around 3%.
  5. The Feds will raise interest rates 3 times in 2019.

The experts, however, are predicting that changes will take maybe 2 or 3 more years, and will no doubt happen slowly. Regardless, many of us investors are thinking about hedging our financials that’s right now. You might ask why wouldn’t anybody or everybody hedge their bets if they knew tough times were coming? Of course, many people would, but the average person doesn’t know that tough times are ahead.

Smart money –money that is invested by people with expert knowledge – does not always do well either, but there are indications that give the smart money people a head start on everyone else. No, they are not always right, but they are more often than not.

A very important part of the formula is to be an independent thinker. The overall economy is like a gigantic river. Sure, you can swim upstream, but it is very difficult. What smart money does is watch the general direction of the flow of that giant stream. Smart money people know that the flow doesn’t suddenly turn around and run the over way.

So even though some of the experts are saying our markets and economy is ready to turn around and go down, it most likely will not happen fast. So, these days, I am advising people to do two things to hedge their money and investment bets:

#1 – Save cash. Build up a cash reserve to be invested after the economic pull back.

#2 – Even though you are building your cash reserves, keep making low ball offers to highly motivated sellers. Granted, there are not a lot of motivated sellers right now because the economy has been in an uptrend for quite a while and many people think it will continue. Still, there are always some motivated sellers out there that need to sell for various reason and some of these people need to do it now at under market prices.

Finding those motivated sellers and making those lowball offers is still smart money, especially if you can do so while building up your cash reserve. So, you might as well keep throwing you net out there and see what you can find. That kind of smart investing and saving is the kind of thing that will get you through the tough times, whenever it is they get here.

 

 

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.

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