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Compounding My Thanks

July 1, 2016 by  
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Continuing with my thank you notes I started last week, I’d like to thank the man I call “Mr. Motivator”. He showed me the importance of goal setting which helps, and almost automatically pushes and pulls you, to achieve things you didn’t think you could do at first. That person was Mr. Paul J. Meyer of Waco, Texas. He started with nothing and went on to make around $500 million by motivating others and showing them how to do the same thing.

Paul started SMI, the Success Motivation Institute, which has spread worldwide, inspiring and motivating millions of people around the globe, including myself. I’ve told you a bit about him and the story of how I came to meet him, right here on this blog, so you probably know he and I became very good friends. I truly owe a huge thanks to Mr. Paul J. Meyer and, of course, also his lovely and wonderful wife, Jane.

Notes of thanks could not be sent out without acknowledging a particularly brilliant writer and marketer that came into my life. This man showed me how to successfully spread my financial message through advertising. My ‘Mr. Mass Marketer’ is otherwise known to me as Joe Karbo of Huntington Beach, California. Because of the brilliant mass advertising methods of his that I followed, I sold over 2 million copies of my first book which helped me launch a very large seminar company. That helped me spread the financial formulas and motivation techniques that Larry Rosenberg and Paul J. Meyer taught me.

What was Joe’s brilliant marketing method? Well, he ran a brilliant full page ad that I saw entitled “The Lazy Man’s Way to Riches” with the enticing subtitle, “Most people are too busy earning a living to make any money.” I saw the ad in the Times Newspaper back on March 2nd, 1979 (I still have the original copy). It took me a lot of phone calls but I finally got to meet and know Joe and we became friends. He coached me through some amazing mass marketing success.

So thanks Joe Karbo. You helped me and you helped the world more than you are your posterity will ever know. This is true for all the great human beings I’ve mentioned in the last few weeks. Where would I be without them? Where would you be without your super motivating people

The People Who Changed My Life

June 24, 2016 by  
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Last week I said that I was going to give appreciation and thanks to those people that inspired, helped and directed my life and personal development and those that lifted my financial life to great heights.

The first and probably most powerful financial mentor was Larry Rosenberg of Denver, Colorado. Before Larry came into my life I had read a few financial books that somewhat helped me start to improve my financial situation, books that taught me that the first step is to save money out of each paycheck, at least 10% but more if you can swing it.

However, what Larry Rosenberg really did to lift my financial sights to great heights was to show me what he’d done, starting basically from scratch, using financial leverage and compounding. When he sat down with me and showed me on paper what could be done with as little as $1,000 dollars, a few years’ time, and hard work, I was blown away. Thousands turned into millions and it wasn’t just a theory. He had done it! I quickly saw, and he agreed, that I could do the same thing. So I set out on my financial path and yes, it lead me to millions.

So thank you Larry. I appreciate you and I will never forget you. You not only influenced and lifted my financial world but because of you I’ve passed your directions and formulas onto literally thousands of other people. Your great influence is huge and growing and it’s so big it’s probably unmeasurable.

Larry also put me onto Bill Nickerson’s great book, How I turned $1000 into Millions in My Spare Time, in Real Estate, which gave me more details on what I should be doing and how. Later I was privileged to meet and get to know Bill very well. So a big thanks to Mr. Bill Nickerson too!

These two gentleman were a big influence but there are still more to thank. Next week, I’ll send out a few more thank you notes and show you what people have done for me and, in turn, for you!

The Risk Hurdle

May 27, 2016 by  
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Financial independence or Financial Freedom (let’s call it ‘FF’ for short) carries many connotations. Ask ten people what these terms mean to them and you will probably get ten different answers.  Many people today have dreams of becoming financially independent, however only a small percentage of the population actually achieves this envied position in life.

FF does not necessarily mean being rich or having a million-dollar bank account.  It simply means having enough money to do what you want to do, when you want to do it. It means you are free from money worries, so you can pursue the things that interest you most in life.  Having FF doesn’t necessarily mean retiring and giving up all your ambitions and goals in life to just grow old.  Actually, quite the opposite is true. It allows you the freedom to put more time and effort into your work or hobbies than ever before, but from a new perspective–that of personal fulfillment and enjoyment from doing work because you want to and not because you have to.  This is true Financial Freedom!

A rather fatalistic poet once wrote, “Life to many is but a constant struggle for a mere existence, with the assurance of losing it at the last.” This is a sobering thought when you consider the United States to be probably the wealthiest country and one of the most productive in the world.

FF does not come easy. Achieving it does require some sacrifices and an element of risk.  It’s human nature to avoid taking risks and who likes to make sacrifices? After all it’s easier to spend your earnings or maybe put some money away in a safe and insured account where your hard earned money is guaranteed a fixed, albeit a very low but stable return. This then, is the great paradox in achieving FF in today’s world.

It is virtually impossible to avoid all risks at one given time, because no matter what course is taken with investment dollars, there will always be a certain degree of risk involved. The real estate investor has to be prepared to take calculated risks and be willing to enter into the unknown, if they truly want to achieve FF.

To state the problem without at least suggesting an answer is unfair. Next week we’ll talk a bit more about this, about why we are averse to taking risks even when FF is our highest desire. Understanding why can be key to recognizing where your hesitation comes from and gives you a chance to conquer it!

Green Up Yourself and Grow Faster

May 20, 2016 by  
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I don’t know about where you live but here in Utah Spring has finally sprung!!  How wonderful it is to see everything turning green and growing.  For me, I find that Spring stimulates me to grow more green stuff. I am actually talking about growing more money but more than that, I want to grow myself in many parts of my life.

As I see more and more people out and about, running, jogging, working on their lawns and gardens or fixing their houses, it pushes me to set more goals for myself.  So my theme for this week is: Let’s get out there and make our lives blossom not only financially but in how we live our lives.

Let’s use this spring time to increase our activities and grow.  We can start by simply getting out there and making this happen.  Like driving through more neighborhoods looking for properties that need a face lift. Look for beat up properties, especially the ones that might have a for sale sign posted by owner or realtor. It might mean that a house just needs the front painted or a beat up lawn needs to be re-seeded and have a few great looking trees or flowers planted with a nice little white picket fence to surround it.

If the house is beat up and shabby plus it looks vacant, take the time to find out who the owner is because it’s quite likely that the owner is a motivated seller. I’m not saying that you should not use the internet to search for properties, because that is a very fast and efficient way to find properties, but sometimes it can be so super refreshing to get out of the office or house and drive around neighborhoods. You may find things you would not have found online as well.

Also, don’t forget to do a ton of asking around … you know, that thing called networking.  Do it in every circumstance you can think of. At parties or over lunch or at work, be sure to ask people if they know of any properties in their area that are for sale, especially houses or apartment buildings that look like they are in disrepair or have sellers that are anxious to dump the property.  You can leverage yourself, big time, by tapping into other people’s brains and connections.

And while you are at this ‘greening up your springtime’, be sure to set some personal goals for yourself, whether it be for better personal health or to be a better parent, friend or spouse.  Let’s all make this springtime thing a growing and greening of ourselves and those around us!!

Truly Smart Money

April 15, 2016 by  
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One of the smartest people in the entire world said this about money: “The most powerful principle I ever discovered was compound interest”.  Who said that? Can you believe it was none other than Albert Einstein?

I had forgotten that wonderful quote until the other day when I came across a booklet titled “Being Smart with your Money” written by my very dear friend and my money mentor of years ago, Paul J. Meyer.  Paul was a man who truly went from rags to riches.  As a young man, he was making a few bucks by picking fruit in California, but by using his brain and wisely using his little bit of money with leverage and compounding, he eventually amassed close to a half a billion-dollar fortune.  He was considered the pioneer of the self-improvement industry and also made tens of millions in real estate. I must give him credit for much of my own fortune.

My other mentor was Larry Rosenberg from Denver, Colorado. Both Paul and Larry basically gave me the same advice when it came to making millions with Einstein’s powerful discovery figuring into the equation as well, big time!  I was taught that, to begin with, a person who wants great wealth needs to pay himself first.  That is, no matter how much or how little money you make, set 5%, 10% or more aside and then (and this is critically important!) never, never, never spend it!  This money is not for buying nice things, it is for investing!

When you’ve built up enough from those savings, go out and invest it wisely.  Most of the time that wise investment is going to be in good ol’ real estate.  The big-time, huge key to this investment, however, is to keep at it, reinvesting the money you make on the first deal in another deal and then another deal after that and so on and so on. That is what compounding is all about.

Paul says this about what a $1,000 investment can grow into: “If that $1,000 were in an investment that brought 10% interest per year, in 73 years, I would have over a million dollars from my original $1,000 investment!  If you put another $1,000 dollars into the pot each year, it would take only 47 years to hit the million-dollar mark.” Keep in mind, that’s compounding at only 10%. As my previous blogs have demonstrated, you can do much better than that. I, and many others, have compounded money at 25%, 50%, and even 100% which turns $1,000 into many multi-millions.

Paul Meyer also gives this excellent advice in his “Being Smart with your Money” booklet: “Only when you develop confidence in a principle will you exert the effort required to change your behavior and put this principle into practice.” That means, you won’t be able to put these ideas to work for you until you take the time to look carefully at them and come to understand just how well you can do with this plan. That understanding should motivate you into acting on these principles. Paul has these great bits of super money advice to get you going as well:  “Set goals, live within your means, get on a budget and stay there, pay yourself first, put your money to work …” and, I would add, use lots of leverage and reinvest for that wonderful compounding effect.

Although Paul’s booklet is no longer in print, I do have a number of copies that I would be so happy to share. Simply write me here with your mailing address and I will send it to you. Paul’s wise words are too good to keep to myself! (Free offer for booklet is limited and will be given to those that respond first while supplies last)

Build Your Wealth with the Help of Inflation

April 1, 2016 by  
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If you’ve been reading the last couple posts, you may be asking, can I get more specifics on this 15% rate of return morphing into a huge 60% return? Well, let’s go over some specific examples.

First of all, let’s have a quick review of what I call natural inflation vs forced inflation. Natural inflation is what our general economy goes through over time. It lifts the price of everything especially assets that are in limited supply, like land and houses. Because of this natural inflation many people, if not most, find that owning their own home has increased their net worth by a huge amount without much effort on their part. The average price of an existing home in America increased in value by $56,200 dollars from 2012 to February 2016 or from a price of $154,600 to $210,800 on average. So, without much effort on the part of the home owner, homes increased in value by 36% over those 4 years or 8% per year compounded. Not a bad investment with so little effort made.

Now let’s take an example to demonstrate what so called ‘forced inflation’ can do even if you don’t count on natural inflation. Let’s say you bought that $154,600 house back in 2012, or even last week for that matter, and put 20 % down or $30,920 and then spent another $7,730 or 5% to fix it up. If you found a house that needed a good bit of fixing up plus you did the kind of improvements that really lifted the curb appeal and the overall value, you most likely would have lifted the value by 15% percent which would raise its market price to $177,900.

If you sell it at that price, you would pull $23,300 out of it plus your personal investment of $38,630 (for down payment and fix ups) as well. That 23,300 is 60% of your personal investment. Where else can you get that kind of return? And remember, if you keep up that kind of investment and return over 20 years you could turn less than $40k into a whopping $459 million! I’m pretty sure that’s well worth your efforts.

If you feel uncertain about what improvements will really increase your investment return, take a look around and see what houses in the area are bringing in top dollar and figure out what they have that the slow and low selling houses don’t Also, pick the brains of those people that are good at seeing what brings in high prices. Do your research to find where your efforts will be most heavily rewarded.

You should also research the home prices in your area before you buy. You can go online and search your city or state and see what the average or median price is for existing homes. Many sites will even tell you what the natural inflation has been in the past. If you get the right deal, that natural inflation might well add on another 8% to the 15% you added to the value of your investment. And let me tell you, those kinds of returns over the years will blow your mind even more!

 

SUPER MONEY MIRACLE

March 25, 2016 by  
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Ever wonder why many smart, hard working people end up making only $40,000, $50,000 or $60,000 a year while others who don’t seem to be any smarter or work any harder, make millions and even billions?  Years ago when I was advertising my first book, How to Wake Up the Financial Genius Inside You, I used as a tag line, “Millionaires are not 100 times smarter than you, they just know the wealth formula.” So, if you are making $50,000 dollars a year, that very rich person, who is no smarter and is not working any harder than you, could be making $5 million.

On last week’s blog, I just touched on the basics of this formula. So if you read it, you may remember that I told you if you go out and buy a property that needs fixing up with a 20% down payment, putting another 5% into the fix up, you could improve the value of that property by 15%. That 15% would equal a 60% return on your actual invested dollars. But just how does that happen?

The million-dollar miracle part of that simple example, which I and others have done may times over, is a matter of leverage. You see, you leveraged your 25% (your 20% down plus that 5% to fix the place up) which allowed you to borrow 75% of the money so you could acquire the property. But your return is on the total value of the house. In other words the 15% increase in value of the property would equal a 60% return on your down plus fix up cost. Then by doing basically the same thing again on another property, you would be doing what is known as ‘compounding your return’.

Now here is the shocking and exciting part of this thing called compounding. Are you sitting down? If you keep getting a leveraged return of 60% on your investments, you can start with just $4,000 and build that into $48 million dollars in just 20 years! Now that’s what I believe is a super money miracle.

It really is that simple. Mind you, I didn’t say easy, I said “simple”. You really have to work your buns off to first find the deals and then fix them up to a point that increases their value. I’ve made a 60% return on many, many properties. I have also received thousands of letters, emails and phone calls from people who have told me that by following what I have been doing for years, they have seen, not just 60% returns, but even 100%, 200% and more.

However, you will no doubt find, as I did, that it usually is easier to get those fat returns on smaller properties.  As you move into larger and larger properties it does become more difficult but it is not impossible to get high returns on your dollar there either. I had one $2 million deal that made me more than a 100% return and even a new $27 million deal that returned more that 60% on my invested dollar.

I hope that this kind of huge potential will motivate you to keep working on deals, even the small ones you’ll have in the beginning. Remember those baby steps are necessary and very important. They show you what you can do. Those huge numbers I spoke of don’t happen overnight and that can be discouraging. Just focus on your success and build on it as you go and just like compounded money, your compounded efforts will also build into huge returns for you!

Control Your Wealth

March 18, 2016 by  
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Last week I ended my blog by talking about the huge importance of saving a minimum of 10% of your income as the first step to achieving total financial freedom and making that savings plan an absolute habit so you do it automatically every time.

But now what to do with that money? Where do you invest it for the best possible return with a reasonable low risk?

One rule that I’ve kept for life in investing is to never turn over total control of my money to someone else. As a stockbroker many years ago, I played in the market and usually lost money or just broke even. Part of the reason was that not only did I have no say or control over the company I bought into but I also had absolutely no control over the stock market and the direction it went.

But then I met a guy who became my wonderful and brilliant coach, Larry Rosenberg. He convinced me that improved rental real estate was the safest and most consistent way to build a fortune. Why? Because if you buy right and buy a property that needs improvement, you can reap huge returns and much of what happens with your investment is in your control.

First of all, you have the power of leverage you can apply when you have the right assets. In other words, if you fix up a property and raise its value by, say, 15% then that 15% improvement in value can turn your investment into a fat 60% on your money! That huge return is based on your choices. In this case, you would put a 20% down payment on it and keep fix up costs at about 5%. These are your decisions to make and therefore you have some control over how well you make out on the investment.

Even today, after 40 years of experience, I still say the best investment that allows you the most control, especially in today’s market with these very low interest rates, is real estate. I started with a small house on the wrong side of town and after I fixed if it didn’t sell right away I usually could rent it out so I had a tenant whose rent I was able to set so that it was paying off the mortgage, usually with a little left over for me. Then I moved on to larger and larger properties which I was able to work pretty much the same way and I still use this strategy today.

The other thing I do to keep control besides investing in the right property and making smart decisions to keep money flowing in, is to be careful with how I set up any partnerships. When I do deals and have a partner or two they always have their name on the deed showing the percentage interest they have in the property with everything spelled out clearly. If all investors insisted on doing it this way, it certainly would cut down dramatically on all the scams and Ponzi schemes. But it also means all the partners know what to expect and there are no out of control surprises later on.

So if you are smart and want to make those big bucks you’ll get out there, take and keep control of your investments, and keep focused on the great power of compounding and leveraging. Next week we’ll go into those subjects a bit more to keep you focused on your goal!

 

Recognizing Reality

February 26, 2016 by  
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Did you get to read the post from last week when we started talking about common sense? Well while that was about using common sense when getting help and advice from the professionals that support your business, this week, let’s talk about common sense when deciding what financial deals to get in on. Here is just a little more from my old publication, The Financial Freedom Report.

One definition of common sense is “what is sound and prudent but often unsophisticated”. I’ve seen many very sophisticated business decisions that have lost millions of dollars. To avoid financial traps, you need a huge dose of common sense, especially when those all around you are playing sophisticated and getting wrapped up with what is hot or in vogue. Common sense will keep you from being trapped or pushed or bullied or shocked into doing a deal that you don’t want to do.

There are many high powered, complex formulas for success and financial independence, most of which are so mind boggling it would take a PhD to understand them. Many of these formulas were written by people who never actually made big money themselves but sat back and watched others do it. From a spectator’s position they think they know the answers and then they make things so complex and involved that the average person cannot understand them. Take it from me, making a lot of money in a short period of time can be done with a simple game plan. I said simple not easy, since it takes tons of work. You are probably already working very hard but maybe not with the right game plan.

When I studied the lives and fortunes of two dozen millionaires and multi-millionaires, I was looking for a common denominator, something they all did that accounted for their success. I finally noticed factors that were present in almost every fortune. I slowly eliminated those factors that didn’t show up in every case. What I ended up with was basic and somewhat obvious, although it escapes 96 percent of those who look for it.

There are four essential ingredients, and I put them into a formula I call “PSIC”, which simply translates into P=Plan, S=Save, I=Invest, C=Compound. And I will add now in order to compound at high rates you need to use leverage.  

An insistent, fast-talking, and even somewhat logical person many times can persuade somebody to do something he doesn’t really want to do. If somebody asked you if you would like to get in on this super-hot deal that will pay you a 250 percent return without any risk and without a lot of your effort, what does your common sense tell you? Common sense should tell you that if a deal were really that good, the guy trying to sell you the deal and or the promoters behind him would probably not have trouble getting the needed money as a loan from a bank.

The simple fact is, those kinds of returns don’t exist. Yes, it is possible for you to get 100 and 200 and even higher percent returns, but not without a lot of work on your part and certainly not without any risk.  Deals like that don’t come all packaged neat and simple, especially without risk and without great effort on your part. Believe me it won’t happen! If I had a deal with a return like that (and I have had those kind of deals) you’d better believe that I would be able to borrow a whole lot of money, which I have done many times, even if I had to pay 2 or 3 times the going rate of interest. Common sense is recognizing reality and then acting accordingly.

Supporting Roles in Your Success

February 19, 2016 by  
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Last week, I shared with you some great advice from an old publication of mine, The Financial Freedom Report. I quoted from an article published in the Summer of 1995 entitled “Ask Your Barber How to Cut Hair, Not How to Make Money” which was simply saying that people who aren’t a super success as making money are not the people you want to talk to. However, there are some people you will need on the sidelines, but like knowing who to go to for advice on money, know who to go for advice on the other things you’ll need along the way, and when to bring them in.

Generally speaking, I find from experience, attorneys are deal breakers, not deal makers. Knowing that, I usually structure the whole deal before I have an attorney get involved at all. Yes, I want him or her involved. When? Just before I sign the papers. I want the attorney to read the contract to a make sure that everything is legal.

Problems can arise when the attorney steps into a management role. When going to an attorney for legal advice, you should always be sure that you ask very precise questions and not let the attorney overstep his bounds. He will if you let him. He has to play the devil’s advocate, and that is good. The same applies to your CPA, your business managers, and your bankers.

A man by the name of Owen Feltham said, “The greatest results in life are usually attained by simple means and the exercise of ordinary qualities. These may for the most part be summed up in these two words “common sense.”

So what is the bottom line from these words written so long ago? Use common sense when choosing who to go to for advice as well as what advice you take from people, even if they are “professionals” because if the advice doesn’t have anything to do with their profession, your common sense meter should be telling you to set that advice aside and have a word or two with someone that really knows what they are talking about in those matters.

Next week, just a bit more from my old publication but this time we’ll talk about common sense deals and how to avoid getting taken by fast talkers and their so-called ‘advice’.

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