Measuring a Country’s Greatness

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

After 37 years the same FINANCIAL FORMULA STILL WORKS

I was going through a bunch of old documents, notes, and papers the other day and came across the very first article ever written about me in the local newspaper.  The headline read “So Here’s How to Go About Making that First Million”. That was in the Salt Lake Tribune clear back on January 18, 1978

They quoted me as saying “…the best way to get rich with someone else’s money is through loans–mortgage and real estate loans.”

Now we fast forward 37 years and guess what?, That old method of getting rich, for most people, is still the best and most reliable way to make your first or second or fifth million. I did however get a big kick out of reading my example and some of the numbers of how you make a 100% return on a simple investment, such as a small house.  It was the small numbers that made me smile.  I had been quoted as saying:

“If you have $5,000 to put down on a $50,000 house and you borrow the other $45,000 to purchase the house, you can compound your investment by 100% if that house increases in value by $5,000 over one year”.

Most casual readers would quickly say or think, “Wait a minute, where can you find a house that you can buy for 50k?  They don’t exist anymore.” If you say that, of course you are right about finding a 50k house but that doesn’t mean the same formula used back then won’t work today.

That financial formula for great wealth is still the same today, but you do need to add something–simply a zero to each of the dollar numbers.  It’s the ratios that give you the 100% return on your money.  You are right if you are thinking that 10% increase in value won’t just happen by itself though. That is unless you are really lucky and we have 10% inflation in one year. But don’t count on that. However, you might be able to buy a house at a real bargain price then make cosmetic improvements which costs money and or your time and efforts but that may well increase the value by 10%.  Of course with the additional money you put to fix it, it may reduce your overall return to 50% or 75%.  But still, those kinds of returns will almost certainly make you a million or multi-millions over time.

Go ahead and google “compound table calculator” and see how quickly 50% or 75% returns increases $5,000 dollars into a million dollars! You may be shocked; especially what it turns into in 15 or 20 years.

 

 

 

 

Push Yourself in 2012

As we come upon the end of another year, I’ve been thinking about what I’ve done this past year and what I want to do this next year. And in the process my thoughts turn to what I’m going to be writing to you all. And I find myself hoping that many, if not most of you will go out in 2012 and take big risks, chase your dreams, and really put your all into getting what you want out of life.

You are probably many times more capable, talented, and resourceful than you give yourself credit for. These last few years have been hard with the economy repressed as it is and we’ve seen so many people– friends, family … even ourselves—feeling it in our businesses, the loss of jobs, the difficulty in finding work. But you know, you can make the present and your future what you want it to be regardless of all that. The route to your goals may not always be so fast and direct, but there is always a way.

This year, promise yourself you will take chances, push yourself, and find a way to make significant progress towards, if not attain, the goals you have. You’ll be amazed by what you can do and will feel energized and more alive just for making that great effort and even more so when you see what you can accomplish!

I hope you and yours have the most wonderful and bright New Year.

The Real Costs of Your Investments

How often do investors think about what is involved in their investments besides money? If you’re handing your money over to a stock broker, the time it takes to invest is small but you also take on significant risk. In real estate investing, there’s both money and time involved in getting it into shape to sell or rent. In a small business investment, the common approach is to put in as little money as possible but all your free time. So considering everything, what investment makes the most sense?

The answer lies primarily in the risk level of the investment and how much your time is worth. For instance, investing through a broker takes little time but the pay back is either very uncertain or very small. Small businesses often take years to turn a profit and your time investment, which may seem cheap or free initially, can be very expensive if you consider how much you could have made working more hours or a second job. Just think, if you could have gotten $25/hour working a second job, then that 20 hours a week you spent over 6 months getting the business up and running cost you $12,500 in lost income! How long will it take you to recover that investment through your business?

In real estate, you invest both a significant amount of time and, sometimes, money (see last week’s post and page 184 in my book “How to Ignite Your Passion for Living” on how to get others to fund your investments) but the outcome is far less risky. The added bonus is that real estate will not continue to suck your time the way a small business often does, and the returns will inevitably be greater and more secure than stocks. This is why I really encourage you to look at real estate if financial freedom is a primary goal of yours.

I’m not saying you shouldn’t open that storefront you’ve been dreaming about or support your favorite budding green business with a capital investment—there are many factors beyond time and money to consider when deciding what investment is right for you—but just don’t pour your all your time and money into something that is not going to help you reach your financial goals in the near future. Keep an eye on the big picture. Because after you make your first million in real estate, you can pay someone to do all the hard work to get that business off the ground or invest in whatever you like. That’s the beauty of financial freedom.

Getting into the Real Estate Game with the “Hansen Model”

Last week I talked about the 10% method for building the capital you need to get into what is today’s top investment opportunity—real estate. The only issue with the 10% method is that it will take some time to pull enough from your paycheck to have the seed money for your first real estate investment. So how can you take advantage of the great opportunities out there right now?

Simple. You have other people put the money in for you.

The best “super leverage” method I’ve seen is what I call the “Hansen model” after a particularly ingenious investor by the name of Dell Loy Hansen. You can read about Dell and his method in detail starting on page 184 of my book How to Ignite Your Passion for Living, but I’ll give you the gist of it here.

To start, you need a few people looking to invest in a safe, reliable project that will give them a regular and consistent return. Get them to collectively fund a down payment of 20% or more on the property you want to purchase and promise a reasonable return–say a 10% APR, an amount that is presently 500% higher than the best CD can offer. If you can put in some of your own money as well, it makes the investors feel much more secure as you’re backing your confidence in the investment’s potential by also putting your money at risk.

Then when you flip that house or rent those office spaces, get the best return possible and get the money back to your investors with a higher than expected rate of return. When they see that you not only lived up to but exceeded their return expectations, you will have created a enthusiastic group of investors for future projects as well as getting wonderful word of mouth that could bring even more money flocking to you.

There are plenty of people out there right now who have cash to invest but don’t want to bank on the unpredictable stock market and aren’t getting anywhere with the meager CD returns. So start working on cultivating those investor relationships and get access to the “leverage” you need to gain financial freedom sooner than you thought possible.

Starting Your Wise Investment Journey

The recession is still being felt in many parts of the country and the depressing talk about how bad things are continues. Real estate prices are still depressed, interest rates are still uncommonly low, and jobs are still on the scarce side, but those indicators aren’t actually signs of doom and gloom, they are shining signs of opportunity. It is unlikely that you will see better deals on real estate or find lower interest rates on loans in your lifetime and if you are stuck in a job you aren’t happy with because you can’t find a new one, start your journey to financial freedom by investing now and investing wisely.

Of course, the first question you are asking yourself is, where do I find the money to invest? The common belief is that you need to be making big bucks in order to have extra money to invest. But the fact is, it doesn’t matter how much you make. All you need is a plan and a little discipline.

If you have ever had a big jump in salary you may have been amazed 6 months into getting those fat paychecks that you were not able to save any more money than before. That’s because we tend to spend at our income level or beyond it so if you make more, you feel like you can, or even should, spend more. Nicer dinners, more expensive clothes, a few more nights out, a pricier car or vacation and the “extra” money you are making is gone. So how do you get around this tendency?

You can do this by putting away 10% of every paycheck—automatically, without exception, every pay day–then pay yourself (i.e. pay your bills as well as earmarking money for essentials like groceries and gas) before spending on any non-essentials. This will keep you within budget and on track to gathering a sizeable sum that you can then invest and start making even more money from. In today’s economy, real estate is an accessible and wise investment opportunity that you should really be taking advantage of. And starting with this smart savings tactic will get you there far sooner than you think.

You can read more about the potential of real estate investments on pg 191 of How to Ignite Your Passion for Living as well as on page 31 of Waking Up The Financial Genius Inside You (write me directly to order this book for just the cost of shipping).

Mark O. Haroldsen on Fox 13 Utah

Mark O. Haroldsen appeared on Fox 13 television station this week (click the link to view now) to talk about Ignite My Life Now – his new book. The interviewers asked him how to avoid getting discouraged over the economy. The first thing he said was “stop listening to the news.” I had to laugh.

You’ll see from the video that you really need to read his book – not just watch his appearance! And thanks for plugging the web site where anyone can get a free copy.

Of course Mark talks about goals and his BRAM formula which is to look over the – Benefits, Reasons and Motivations for a goal. Write down the benefits of your goal and the reasons you have it. Read those notes again when you’re weak and it helps you keep your focus.

Taking A Long Term View in Tough Economic Times

“It is hard to maintain vitality when you are always hungry”.
– Aristotle Onassis

A question that people ask is how to follow passion for living when you are barely making a living. When things are difficult and you’re hanging on just to survive. Now the economy around the world is in turmoil. You could argue that it’s just about impossible to find passion in life, especially if you were already struggling. It’s true that it’s much more difficult to live in the present or have passion for life if you’re worried about basic human needs.

One way I approach difficulties is through mindset. I look at situations relatively. There are families in our country who are in tough situations right now. For example: a husband and wife with two kids, no savings, who are behind on their rent payments. Then the husband loses his job and they wonder how they will make it.
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The Sky is Not Falling – Mark O. Haroldsen on the Economy

“You need to stand back from the masses because the masses almost always get it wrong.”

Some might wonder if because of my lifestyle I’m somehow immune to feeling the effects of a slow  economy. I’m not saying I haven’t been hurt by it, I have. I’m not immune to it. But my take is that we’re not at the bottom yet – but we’re near.

I talked to people on my trip about it. World markets are being creamed. Many are worried. Some blame the U.S. for problems with the economy, though they have made some of the same mistakes. There is no question that a person living hand to mouth is in a bad situation and this economic downturn. It scares them — and it should scare them.
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