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).

Living Healthier in the Now

Most of us have some health related goal or area of improvement that we are working on or hope to work on very soon. Keeping yourself mentally and physically aware while exercising and eating by using the “living in the now” concept I’ve been talking about in the last couple blogs, can get you through a strenuous workout as well as help you eat right all while increasing your enjoyment of these activities.

For most of us, getting through an exercise routine is a struggle. But if you are completely attentive to your movements instead of thinking about how you’ve never yet been able to keep up an exercise routine or letting your mind wander to how much nicer it would feel to be lounging on the couch, you aren’t as likely to quit in the middle of it. Just keep focused on the feeling of your muscles moving and listen to your breath as you control your inhaling and exhaling (a primary concept behind yoga and its distressing effects, by the way) and soon enough you will have completed your routine or finished that 30 minute run and are feeling great.

When it comes to food, it’s all about being mindful of what you eat, how much, and how you eat. When you reach in the fridge for something, consciously decide what will contribute to your well balanced intake for the day and choose your best options. Stop eating directly out of the box or bag and lay out a small portion on a plate that you can then take to a table or out onto the porch to enjoy. Choose a place with no TV or computer or anything else to distract you. Taste your food, becoming aware of every flavor and texture, and chew completely. You will find that eating “in the now” is much more enjoyable. It will also slow down your eating so you fill up on less food and will help your digestion by having food well broken down before it hits your stomach.

“Living in the now” will help you by not only increasing your appreciation of the sensations of exercising and eating well but will also help you attain your goals for a better, healthier life. You’ll feel great because of your accomplishments along with gaining the long lasting and compounding effects of the bliss that comes with being consistently happy in the moment.

Living in the Now while Planning for the Future

As I mentioned last week, you can strive to make your life better but you also need to appreciate what you have and what you accomplish today. This is the concept of living in the now. No matter what your circumstances are at the moment, you should strive to enjoy the life you are living today. This can be a difficult concept to put into practice, especially if you focus so much of your energy on the future and reaching your goals. So, how do you live in the now while working towards a better future?

The answer is to balance your thoughts between enjoying what you have now and looking forward to what you will have in the future.

Chances are if you are reading this blog you are a goal setter, or are trying to become one, so you probably spend a lot of time thinking about your future. And you should regularly take time to think about how your life will be when you reach your goals as it will help keep you focused on what you are after and motivate you to keep going. However, while chasing your goals, you should also be striving to live as fully and as passionately as you can, today.

For instance, don’t go to a cheap diner and spend the entire meal thinking about how you’ll be able to eat at high-end, ritzy places when you are successful and rich. There’s nothing wrong with letting that thought in—for a moment. But then sit back and enjoy your meal and don’t let your mind wander back to what you aren’t able to do, right now. Because right now, being frugal is probably necessary for you to eventually reach your goals as well as take care of today’s responsibilities. And besides, no ritzy place is going to have that sweet old waitress who calls you ‘hon’ and always has a colorful joke to get you laughing at the end of a long hard day.

So become a keen observer of your own mind, being conscious that you spend the majority of your time focused on taking in the experiences and sensations of the moment you are living in. Because what is the point of working through today just hoping to enjoy tomorrow? You should be enjoying today as well!

Enjoy the Journey

Recently I had a young man come to me in a near state of depression. I was surprised at how down he was as he usually very upbeat and positive. When I asked what was going on he said he was frustrated and felt like a failure. He had huge goals which he’d been continually working on but he felt he wasn’t progressing fast enough. He wanted his future to happen now.

I have found this to be a very common state of mind these days. Our advanced technologies have led us to habitually expect that we can access our wishes immediately. Super fast internet, instant downloads, DVRs, and multi-functional cell phones give us the ability to have some level of access to whatever or whomever we want whenever we want. But life, in general, doesn’t work that way. As a result, we are experiencing more and more frustration and impatience which ultimately leads to depression or anger.

Reaching a goal is a series of small, necessary steps but even when you are making steady progress, it may feel like it is taking forever to attain it because of all you must go through to get there. The key to a truly successful goal, however, is not only reaching it but also enjoying and celebrating life while you work towards it. In other words, you need to learn to appreciate the journey, not just the destination.

Over the next few weeks, I will talk more about what is often referred to as “living in the now”. Much of what I want to talk about is based on principles outlined in my book, How to Ignite Your Passion for Living. It’s hard to be passionate when you are frustrated and impatient but it’s not hard to be passionate about anything if you are passionate about living and enjoying the moment. That is really the ultimate goal.

You Never Have to ‘Lose’

Last month I had the chance to play a very special doubles tennis match with Governor Gary Herbert of Utah. I had my partner, Judge Andrew Valdez, and the governor had Jeff Robbins of the Utah Sports Commission (who also played the pro tour for a while!). It was very close but, in the end, the governor and Robbins beat us. Still, there were no losers that day. First of all, the match itself had been a dream of mine. Not only that but the wager was that if the governor won, I would donate $5000 to the Granite Education Foundation, an organization that supports Utah schools and Utah kids. So when the last volley ended, I was as elated as anyone because the kids were the big winners and I could celebrate for them.

I wish that we could all look at the events in our lives and think about the wins not the losses. In the tennis match, the governor won the game, the kids supported by the foundation won additional funding, I achieved a dream, and players and spectators alike were uplifted by the exciting event and the philanthropic theme of the day. We didn’t win the game but there was no way I could look at the day and say we lost.

This positive outlook is something I call a “God’s Eye View.” It’s a way of seeing things from the perspective of humanity as a whole. It means believing that someone, somewhere, is getting joy and/or some kind of enhancement in his or her life even when you are not, and you can be happy and rejoice in the moment for them. Living this way, never being concerned about what you didn’t win, what you did not personally get, makes you a happier person. And that in itself is quite a win.

I talk about this “God’s Eye View,” at length in Chapter Twelve of my book, “How to Ignite Your Passion for Living.” It is intertwined with thoughts on the many benefits of giving which is also part of the “God’s Eye View” and something I try to do on a regular basis. In fact, the flip side of that tennis wager was that if I won, the foundation would get only $4900. Because if I had won the game and the kids lost the donation, my dream to play with the governor would have been a rather empty achievement. The best goals are ones that not only fulfill your dreams, but allow you to give back in some way as well. What they want. And there is no reason why you can’t be one of them.

Get your FREE copy (you pay shipping and handling only) of the book,  “How to Ignite your Passion for Living.”

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Coasting Through Life or Living It?

“Lucky are those who have passion for life. But blessed are those who have passion all their life.”

That’s one of my favorite quotes. My heroes are people who have been leaders. Their personality creates an atmosphere. They set mind stimulating goals rather than take the easy way and think “I’ll just coast.”

One problem is we rarely have good examples of people who live with passion their entire life. In the movies people who are successful and happy reach a certain destination. They reach some pinnacle of success and the movie fades out with them sitting around the pool. If you truly want passion all of your life, you can’t lounge around. You have to start creating it yourself. You must continue to challenge yourself to accomplish goals that are meaningful to you.

Instead we might be tempted to think, is this all there is? Happiness comes from the process of setting and reaching goals. We as humans feel so good when we’re totally involved in something. You’ve felt this when you’ve gotten lost in a novel, playing sports, or at work. You lose yourself, you are living in the now. You’re in the moment. That is living!

Great Ideas Live Forever

The great books of the world, unlike the great people, never die. Take the book: Think and Grow Rich. The message hasn’t aged at all. It is still spot-on today.

So far, in the month since it was released, my book seems to reach people of all ages. We’re at our home in Hawaii and as I talk about the year and look to the next, I’m seeing whales spouting off our back porch. One of our house guests here told me they gave a copy to their mother who is in her 70s. We also heard about a retired surgeon who is very excited about the book. I’ve also heard from someone in his 30s, who is already quite successful, and how he just loved it.

Right now my book is available on this site free of charge (get your free copy of How to Ignite your Passion for Living). I ask people to pay for multiple copies because they’re not for people to sell on eBay, but to spread ideas. It is my gift to you, in the spirit of giving.

I’d like nothing more for my books to leave a legacy that will continue to reach people who want to live passionately long after I’m gone.

Start Small but Get Started

A challenge that faces us when under extreme stress is to keep focused on goals. You might be depressed or feel overwhelmed and the effect is you don’t want to do anything. This is precisely what you must do – act! You might not feel like getting out of your house – but do it anyway. Just getting started usually helps.

Focus on what you can do. Put deadlines with each step and keep focused on doing rather than perfection or worrying.

For example, you can set goals to:

• Eat right – which will help your energy levels and you’ll feel better.
• Exercise – challenge yourself to go on a walk, a bike ride, or anything. Start with a small goal, like 5 mins. or 15.

Small success leads to bigger success, especially as you continue over time. Leave a comment and tell me about some of your goals. How have you have broken them down into small pieces?

Finding Mentors – A Billionaire’s Secret

“I was lucky to have the right heroes. Tell me who your heroes are and I’ll tell you how you’ll turn out to be. The qualities of the one you admire are the traits that you, with a little practice, can make your own, and that, if practiced, will become habit-forming.”
– Warren Buffett

Warren Buffett’s 7 Secrets for Living a Happy and Simple Life
Part of success is mindset – and those who are successful at overcoming challenges or excelling make great mentors. They understand the power of your mindset. A mentor can be someone you know personally (or seek out and become friends with), people you read about, or those no longer living.

I like meeting people I admire – most of them are completely within reach. It’s surprising how easy it is to meet people if you are persistent – it’s something I’ve done all of my life.

I’ve met the Dalai Lama and the president of the United States, plus many people you may not know about who’ve done great things and overcome huge obstacles.

Where can I find great mentors?
One way to find mentors is through organizations. I’ve belonged to real estate associations, political associations, and other groups. Some are a waste of your time, but others like one I’m involved in is the Granite Education Foundation. This organization have been very helpful and extremely rewarding for me. Find organizations that are doing good work in your community and you’ll likely find mentors who you can learn from.

One way I find people to follow is I read newspapers, magazines (like Fortune, Forbes, Time Magazine, Newsweek) and see who is being talked about. Then I seek those people out. It’s not hard to get to know people. One way that can work – is to keep asking for an audience until you get a response.

Once I decided I wanted to meet the Ray Kroc, the founder of McDonalds and I did it through sheer persistence. Ray didn’t make his fortune until he was 55 years old. He started by studying the success of a small burger joint in Southern California and later bought it and franchised it around the world. He made several billion dollars.

He started out flipping hamburgers and 40 years later he was the CEO of the company. How did he do it? I wanted to talk to him, find out more. So I devised a method and I persisted. I called his office asking to meet him until one day he gave in. He gave me 20 mins. but when we got talking I was there for two hours. We became friends and he gave me great advice that helped in a huge way to build my own fortune.

Another one of my heroes was the billionaire Aristotle Onasis. The story goes that he wanted to meet a famous Argentinian businessman. He only made 25 cents an hour and had little hope of ever meeting the man.

His plan was to stand by the man’s gate every day, not saying a word. After standing in the same place for several weeks, this important man that he wanted to meet finally couldn’t stand the suspense any longer. He confronted Aristotle and said who are you and what do you want? And from that initial meeting, Aristotle learned a great deal that helped his success.

Another person I want to meet now is Nando Parrado. I am planning to travel to South America to meet him. He was one of the few survivors of a deadly plane crash in the Andes mountains. He spent 72 days in freezing temperatures then climbed over 17,000 foot ice capped mountains and led a rescue party to the other survivors. It just about killed him but he lived and wrote the book about his experiences in, “Miracle in the Andes.”

I always have a list of people I want to meet. What do I want to learn from these men and others like them? I want to know their thoughts – what’s inside of their heads. How they survived and thrived through difficulties. Some disclose it in their books but not all do. I want to know how their experiences affect their lives now. How it affects their thinking.

So one of my secrets to passion in life is to make a list of who you want to meet and why you want to meet them.

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