Real Estate Investing: The Advantages Never Change

Yesterday I was going through a bunch of old files and I came across a large envelope that my good friend Joe Sugarman sent me. Joe is the founder of the company that introduced the Blueblocker sunglasses that sold millions, making Joe a very, very rich man. In the package was a few of my old ads that Joe had kept.  On the old yellowed paper I re-read one of my first half page ads printed in the Wall Street Journal on January 25, 1977. The headline read “How to Achieve Total Financial Freedom”.  I am totally convinced that the reason the ad sold so many copies of my first book, How to Wake Up the Financial Genius Inside You, had less to do with the semi-catchy headline than the sub-header that read, “Millionaires Are Not 100 Times Smarter Than You, They Just Know The Wealth Formula”. I’m sure that most people read that and it rang true to them. Because it is true.

In the body of the ad I went on to say, “Millionaires are not 100 or even 10 times smarter than you , but it is a fact that millionaires are making 10 to 50 or even 100 times more than you.” Additionally, I should consider that millionaires are not working 100 or even 20 times harder or longer than you either. There are not enough hours in the day to work 20 times longer than your average worker! And now, 38 years later, I can clearly see that the formula to making big money and accumulating great wealth is basically the same today as it was way back then.

I can tell you for sure that if I were just starting out now as a young man without any money to speak of, just like I was years ago, I would pursue the same path as I did back then.  The only difference would be that I might be a little more aggressive today than I was then. Today’s market is ripe for the picking!  For the most part the only push back that I have had in recent years from readers of the Financial Genius book is that buying properties at the prices given in the book are just not possible in today’s market.  And those critics are absolutely correct, but the ratios are still pretty much the same.  In other words today you can’t find “dirt bag” properties for prices like $40,000 or $50,000 in most markets. And that’s correct.  But the ratios for what you can make on your investment are still the same.

In many cases, you can gain a 33% value increase on a dirt bag property you fix up. On a $50,000 property, that would be a little more than $66,000. But today, you may have to pay $120,000 or $200,000 dollars for a beat up property but after fixing it up, you could sell the $120,000 purchase for at least $159,000 and the $200,000 investment for $266,000 or more. Yes, these numbers don’t take into account the money you spent on fixing it up, but if you leveraged the deal with a mortgage–using someone else’s money to make money–you will find that the return on your investment goes up a ton and will usually more than make up for your fix up expenses.  So bottom line here is don’t get hung up on the lower price examples in the book, invest and pay attention to the percentages you can gain.

To help with that, I have recently updated my Financial Genius book. It will be going to the printer before too long and I will let you know here when it’s ready for ordering.

The Advantage of Honest Answers

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.

Three More Buried Secrets

A secret is some bit of knowledge that is kept from someone or many someones. Last week I spotlighted those truly terrible secrets … the ones we hid from ourselves! When you are trying to accomplish something that is challenging or simply hard to stick to, you need every tool you can get your hands on. But so often, we have been given these tools and then hide them away. Why is that?

Well, if you read last week’s post, you now know (or have been reminded!) what some of the most important ‘secrets’ are to accomplishing both small and large goals. But wait … there’s more! Let’s take a look at some of the other great ‘secret’ tools you have available to you to make your dreams happen!

No. 5: Establish a routine and keep with it until your routine has truly become a hard and fast ‘habit’!

This is a big one. Form the right habits and you can change your life forever.  You know as well as I do that this is true whether the habit is a good one or a bad one.  Scientist have determined that it takes anywhere between 21 and 66 days to form a solid habit, depending on the person. You and I must stick with the routines that are leading us toward our goals long enough that they become rock solid routines.  If we do that, we’ll see that sticking to our plans and reaching our goals will become easier and easier.

No. 6:  Break down those big goals into what I like to call ‘bite-sized’ steps.  For most of us, and I know for me, if I don’t break it down into small goals or bite sized tasks, those big goals can break me down. Why? Because those big, long term goals can overwhelm the mind and shut a person down. It’s easier to do the small stuff and they eventually add up to something big!

No. 7: Set up a reward system for yourself. That is, when you hit your goal and maybe even along the way as you take those bite sized steps or reach intermediate points or milestones of success, take time to celebrate your victory. You can reward yourself with a special night out on the town or a huge getaway vacation to an exotic place. Whatever it is, make it super special and something that you will always remember.

That is a long list of ‘secrets’ you can use to help you reach your goals. But one last thought–If you don’t hit your goal or you miss a deadline, don’t be too hard on yourself.  Remember, some of the most successful people on the planet had many, many failures as they pursued their big goals.  It really is okay to fail–almost everybody does at some point or another. The thing is, failure can lead to even greater successes, so if you fail and fall down be sure to get right back up, reload and reset and keep going!

 

Big Buried Secrets

Ok … so do you want some sure-fire ways to help you set big goals (and/or small goals) and be able to stick with them until you succeed? Well, they are out there just waiting for you. I’m going call these methods ‘secrets’ although as you read some of these you may say ‘Hey, I already know that one!’ so for you it’s really not a secret.  Right?  Well, you may be right and it may not be something new to you but if you are not doing it, then maybe it really should be labelled a ‘secret’. A secret you are keeping from yourself.

For example, you probably have heard the first two secrets I have for you. But do you do them?

No. 1: You must write your goal down! There is a kind of magic that happens in our brains when we make a printed record of specifically what we want to accomplish. It makes it more real to us and we feel obliged to follow through. Just because they’re written down.

No. 2: Be sure to put a deadline or time limit on your goal and write that down too.  Without a deadline, you can put off forever the tasks that will move you forward and then you’ll never get close to that goal. Knowing you have a deadline gives you a kind of mini-goal and something to aim for.

Does that sound familiar? Sound like great advice? Yes? Well … do you always employ them?

How about ‘secrets’ that some people might be aware of but don’t spend enough time doing?

No. 3: Take time to carefully visualize your goal with as much detail as you can imagine.  That visualization should also include an image in your mind of actually accomplishing your goal. Think about how you are going to feel when you arrive at your journey’s end. Run it though your brain numerous times until it feels real.

No. 4: Tell other people about what you have set out to do.  Ideally tell people who care about you and understand and appreciate what you’re aiming for. Ask these people to remind you, encourage you and cheer you on as you make progress towards your goals.

This fourth step can be a huge help.  Even if they don’t ask how you are doing or give words of encouragement every time they see you, your seeing them will often remind you that they know what you are shooting for and you certainly don’t want to disappoint them, not to mention failing yourself, of course.

So I am guessing that, for a lot of you, these tips aren’t new ideas but if you aren’t doing them, they might as well be deeply buried secrets. They are all simple to do, take very little effort, and can increase your ability to persevere and reach those goals, both big and small! So dig these back up and use them! It’s your own little gold mine you can use to pave your way to all kinds of success.

There is even more good news … those are not the only ‘secrets’ out there. Next week, I will talk about more tried and true secrets to making your goals a reality. Get yourself a head start by writing down, setting a deadline for, visualizing and telling others about your goal. Because the biggest secret is that you can’t get what you want without going for it!

 

 

The Power of Unchangeable Deadlines

Here I am sitting in the Los Angeles on the way to Kauai. I know poor us, right? But what a day! Got up early to bury a rattle snake, fix a broken sprinkler pipe, negotiate the multi-million dollar sale of a property that I’ve been wanting to sell off, pick up the paperwork, write emails to the office and others, do a last check on the swimming pool motor, double check to make sure we have enough gas to make it to the airport, get packed for our trip, etcetera, etcetera, etcetera.  It was quite a morning but so much better than the day before with all the stress and worry about the tight schedule we had today.  But why had I been so stressed?

Well, it’s simple. Before we have a big day planned, whether it’s a trip, a big event or a similar massive change from what we usually do, most of us are filled with stress over the great unknown outcome of all we have to do. When we get going on all the tasks that need to be done, then the stress starts to go away because we are so involved with the ‘doing’.  What’s so amazing to me is that most of us humans can and do get so focused and determined to get these time sensitive and necessary jobs done that we can and do manage to get tons more done than on a normal day. We can amaze ourselves at the efficiency and effectiveness with which we get things done.

I am pretty sure you have, in the past, experienced the same thing as I did these last two days.  I’m so impressed how efficient I can become if I have absolute deadlines that I have to meet. You know, like an airline departure time that won’t wait for me.

I guess we can say that one of the great powers of goal setting is in its time limits. In this case, it’s time limits that are set by others, time frames that can’t and won’t be changed for us.  And that’s probably a good thing.  The problem we have when we set goals for ourselves, whether they are physical, family, health or wealth goals, is that we can cop out and change those goals along the way.  If we can somehow set those goals in real, immovable ways, kind of like an airline flight

Think about that and see if you can come up with a plan or a method that might create for you a deadline that you won’t think about changing or that really is absolutely unchangeable so you can’t even begin to think about not hitting your goal! What would do that for you?

 

The Risk and Reward of Living Large

Mitt Romney, former GOP candidate for President recently made some powerful comments to graduating students at Utah Valley University. He advised the students “to experience a fulfilling, 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.  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, and of course we all have had failures.  He further stated, “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, the reader?  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’.

Next week, I want to address something else Mitt Romney said at Utah Valley: “Your life will be larger if you value and nourish friendships.”  Those are also some very poignant words.

How to Live to be 142!

You no doubt have heard the rumor that all of us humans will die someday. Of course, I don’t believe every rumor I hear and this one sucks. I just don’t want to believe it! So maybe I’ll call for a huge boycott. You know, get a bunch of us older people together with big signs saying “We are boycotting death!” or “We refuse to die!” or “Death sucks and we won’t participate!” Well, it’s a nice thought but it probably won’t work. Oh yes, if we did it in front of a TV station they might put us on the news so everyone could get a big laugh out of it, but I don’t think that will help us avoid death or even prolong our lives by much.

However, there are things we can do to postpone the inevitable and live longer, stronger and in great health. In fact, there are some researchers that are “inching toward the seemingly impossible: a cure for aging,” according to the February 23, 2015 Time Magazine article. Maybe you saw that issue. On the cover was a picture of a cute baby with the headline “This Baby could Live to be 142 Years Old”. That headline certainly grabbed my attention and yes, I read every word of the several stories covering what the researchers have discovered and what we can do right now to postpone our own demise.

The main story was about “Mouse UT2598″ and the discovery of a compound called Rapamycin which seems to dramatically slow aging, at least in certain cells. If this compound works for humans it could increase lifespan to around 142 years. The research going on at the Jackson Laboratory and the University of Texas Health Science Center in San Antonio, is in its early stages and researchers don’t recommend that humans start popping Rapamycin pills just yet says David Harrison because there are some down sides they have discovered at this point in their research. But the good news for me at age 71 is that they have seen that, “Rapamycin is also neat because it works even when you start quite late in life”.

So if this compound isn’t for humans just yet what can we do about it now? The obvious answer, at least to me, is to do everything in my power to stay healthy, in hopes that science figures out how humans can safely take Rapamycin. And the most effective and proven ways to do that is by eating the best foods which, according to the researchers in the Time magazine article include fish, fruits, veggies and extra virgin olive oil as well as calorie restriction, periodic fasting and consistent exercise with maybe a bit of yoga and meditation.

Do all that and you will have a significantly better chance to live longer and maybe hang in there until they perfect Rapamycin for humans. If doing all those things that you can do and should do sounds like a tough challenge, then listen to the words of William James. What he said many years ago has helped me to better my life when I could see that I needed to make changes and knew that it was going to be a big challenge. “If you change your mind, you can change your life”. I have that burned into my brain and hope you do the same.

 

 

 

The Discipline Hurdle

If you truly want to be wealthy then it’s virtually a must for us average humans to do it through wise investing. But you might say, “Hey, what about the person who doesn’t have any money to invest, even in the smallest property?”  So the question becomes, how can you begin without a dime to your name?  Well, you build a nest egg. Of course, that begs the question, how do you get that beginning nest egg to start your investment program?

Most of us know that the traditional way to build a nest egg is through savings.  For many people that’s a big fat “ouch!” When you take a close look at the average American family, you see that the rate of savings has been in a steady downtrend the last few years.  When someone is asked why they don’t have any savings they usually respond with something like “I can’t afford to put any money aside. I barely break even. By the end of the month, nothing is left over.”

The people that say this are usually the same ones that, even after they get a raise, nothing changes. They are forever stuck at breaking even at the end of the month or, worse, going into debt.

So what’s the real problem here?  In a word it’s usually discipline, or more accurately, the lack of discipline.  When you are saying to yourself, “I just had to buy that new coat (or dress, suit, latest and greatest cell phone, computer, new car, etc.)”, or “We’ve been scrimping so long we deserve to treat ourselves to a very nice night out on the town or a vacation,” you are also saying that you’ll never be wealthy and are likely to be a ‘wage slave’ your entire life.

In order to be able to start an investment program, you must be tough on yourself and fully realize there is a huge difference in what you ‘need’ verses what you ‘want’. Once you have arrived at the point of understanding that, then you may well be on your way to great riches and maybe even wealth beyond your wildest dreams. That is what happened to me.  Unfortunately I can’t remember who or what book taught me the big difference between need and want, but once I learned that lesson and applied the needed discipline, I was able to save thousands of dollars in one year and that launched my investment program.

Of course, once you’ve built up that “nest egg” you must be wise and put it to work with great care.  When I began my investments, I was in a big hurry so I used a lot of OPM (Other People’s Money) as well as sweat equity which propelled my return on investment by leaps and bounds. I’ll talk more about just what worked for me in next week’s blog but in the meantime, consider the fact that your biggest hurdle to the wealth and financial security you are craving is one less vacation a year, one less shopping spree a month, one less night eating out each week and one less fancy coffee each day. When you think about it, that really isn’t too much to ask of yourself. Not for the chance to make a fortune.

The One ‘Dead’ Thing That Makes You LIVE More LIFE!

Most of us when we hear the word “dead” we automatically think it’s something real bad, and many if not most of the time it is just that. But there is one use of the word “dead” when applied to your life that can and does add much more ‘life to living’; that is when it’s linked with the word ‘line’, as in the word ‘deadline’.

The origin of the word deadline is very interesting. It came about during the civil war when prisoners were surrounded by barriers or sometimes just simple lines drawn in the dirt. If a prisoner crossed over these, the guards we under orders to shoot them dead! These boundaries were called deadlines.

Now deadlines are used to make the world a more organized and efficient place. They force us to push ourselves a little bit harder to do more and be more. Think about this: If none of us ever died then we probably  would not even have a clue why anyone would want to set time limits or deadlines on themselves, since time would not be much of a consideration or may not even seem to exist, at least when wanting to get things done.  Why? Because we’d never run out of it.

But, of course we all have a limited amount of this thing we call time (remember, the average person lives less than 30,000 days or 720,000 hours) so it’s important to use it wisely and efficiently. Deadlines help us do just that.

Think what the world would be without deadlines. What if we didn’t have deadlines for any or all of the following?

1. Time to start or finish work.
2. Time for school to start or end.
3. Response time on business deals or real estate offers to sell, buy or close a deal.
4. Court deadlines for filing document.
5. Departure or arrival times for airlines, trains or buses.
6. Times or dates by which we want to accomplish goals that we’ve set for ourselves.

So my message for this week, and really a message for a productive and more satisfying life, is this—Always set goals for yourself and be sure to set those deadlines as well so as to push yourself to use your time wisely and more efficiently.   But don’t shoot yourself if you step over the ‘deadline’ a bit. Just re-boot and try again.

 

 

 

The Principles of Stick-To-It

As mentioned in the last two posts, the comments made by Jeff Rahill in this little “book report” he sent me has really had me thinking about what I wrote in How to Ignite Your Passion for Living. Even the author can use a little reminder here and there! Here are two more sections he pulled out and comments he made about them that highlight two areas particularly important to keep you on task:

In regards to the chapter “Clone Yourself with the Amazing “L” Factor”, Jeff noted that he uses lists himself and has for a while. He wrote, “Yes, I’ve been a prodigious list maker for decades. I switched from the little scraps of paper to my Day-Timer in 1972. ‘The strongest memory is weaker than the palest ink.’ (Write it down!) I update my to-do list every morning (if not the night before).”

And that is the way to do it. Keep creating lists and you will stay on task and succeed.

In regards to the chapter “The Greatest Lesson in Life. Get Going”, Jeff said, “The journey begins with the first step. Nothing happens until you take action. You mentioned the story of Alive, the plane crash survivors in the Andes. What an incredible story. I have seen that movie and still think about it. Nando Parrado took action and his incredible journey saved his friends. ‘When the morning light comes streamin’ in, I’ll get up and do it again.’ (Jackson Brown) Amen.”

This “get going” advice is something that we need to remember and do at every age and stage of our lives. No matter what you want to do, whether it’s goals you have set for your business, family, or personal health, the bottom line is, you just have to GET GOING!

If you’ve follow my blogs for very long you know that I am also a big time fan of counter acting aging by “keeping moving”.  I am 71 in less than two weeks and my “keeping moving” philosophy—as in work outs, tennis and walking—make me feel like I’m 50. (My Fit Bit measured me taking 22,707 steps yesterday–btw that’s 10.54 miles). Bottom line here is we all need to “get going” and keep going which will improve every part of our lives without question! That attitude and well-kept lists will help you Stick-To-It until those goals and dreams are yours.

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