As Mark Ford says in his essay today, “Making money is addictive.” Fortunately, he’s also going to show you a very safe, yet lucrative way of building wealth. In fact, your first deal requires just ten hours.
Craig Ballantyne
“A smart man makes a mistake, learns from it, and never makes that mistake again. But a wise man finds a smart man and learns from him how to avoid the mistake altogether.” – Roy H. Williams
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Ed O’Keefe was the 12th of 13 O’Keefe kids growing up on the south side of Chicago. His Mom stayed home and made sure all 13 kids experienced a loving environment and were well taken care of, while Dad put in 12-14 hours as an electrician just to get by. While his brothers went into trade unions, Ed got a nursing degree, and eventually stumbled across an audio recording by legendary success teacher Earl Nightengale. Ed felt like Earl was talking to him directly when he said, “You live in the best country in the world, where you can be, do, and have whatever you want regardless of your education or degree.” Ed knew right then he wanted to be an entrepreneur. Going out on his own wasn’t easy, in fact, it started with 4 years of one failure after another. Ed was the typical “Reluctant Entrepreneur“, as Michael Masterson calls it, and started bartending to have enough cash just to get by, while during the day he studied marketing and copywriting.
After a year, the pieces of the puzzle started to come together and Ed’s business took off. “My big breakthrough was focusing on developing the skills of copywriting and marketing while making enough money to get by. The dream is a by-product of being plugged in and focusing daily on the skills that will get you where you want to go!” Since then, Ed has achieved his American Dream by starting multiple companies and continues to do so today, while enjoying being a husband and proud father to 5 kids (following slightly in his parents footsteps).
Discover how to achieve your American Dream and Financial Independence here
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Retirement in Ten Hours
By Mark Ford
You don’t need to be rich or even have perfect credit to take advantage of the fantastic market for rental real estate today. If you are willing to invest about ten hours of work this month, I’ll show you how you can add as much as $80,000 or more into your retirement account.
For the purpose of this blueprint, I’m going to use the example of a $100,000 three-bedroom, two-bath house.
First, find two or three neighborhoods near you that have houses for sale in your price range (for the purposes of this example, assume $100,000). Spend an hour driving through the neighborhoods. Talk to people on the streets. Ask them about the community, safety, schools, and the same questions you’d ask if you were going to move in. (Invested time: three hours.)
Second, call up a few local brokers who are listed on these properties. Tell them your plan: buy multiple houses at this price range and rent them out. Ask the brokers about the market for rentals, the prices you can expect, the occupancy rate, the quality of renters. (Invested time: one hour.)
Based on your research, select the neighborhood that has the best overall values (low cost, high rental income, quality of renters, etc.). This is going to be your financial playground. Select the broker you like best, and spend several hours looking for houses for sale that meet your criteria. (Invested time: three hours.)
Next, call up several local banks and ask them if they provide loans for real estate investors. Tell them what you intend to do, and ask them what qualifications you would need to get an investor mortgage. Determine which of the banks you talk to are most interested in your business. (Invested time: two hours.)
Since you might not have good enough credit to get a loan on your own, you might need to partner with someone who does. Start your search by calling friends and family members who have good credit. Tell them what you are doing, and ask them if they’d like to become a partner in income-producing real estate. Be prepared to show them how much cash they can expect to earn every month and how many tens of thousands of dollars they will make when the property increases in value.
If they sound interested, propose the deal: You will put in the sweat equity in buying the house, managing the financing and repairs, and securing the first tenants. They will provide their good credit. Each of you will have equity, and each of you will enjoy the income and capital appreciation. (Invested time: approximately one hour.)
Determining the percentage of equity you each get depends on how you value the contributions made. In other words, it is negotiable. But to frame your discussions, here’s how I look at it: The good credit that your partner contributes is worth 25% of the equity. All the work you do in terms of finding the house, locating the financing, managing the repairs is worth 25%. That makes you 50/50 partners so long as you each contribute half of the down payment.
If the down payment is $20,000 (20% of $100,000) and you pay it all, you should get 75% of the equity. If you each pay half of the down payment, you should be equal partners. If you don’t have any money and your partner puts up the down payment, he should get 75% of the equity.
Why would this person lend you money? It’s not because you’re a nice person and they want to give you a hand, although that may be part of their motivation. The important, business reason is that you are giving them a chance to profit from an asset of theirs (their credit rating) that is currently doing nothing for them.
Did you get that? If not, read it again. They should be thrilled to make this deal because you are giving them 25% of an income-producing business in exchange for their signature. (Of course, it’s more than their signature. They are guaranteeing the mortgage. But with opportunities like these, the risk is almost very low.)
After you’ve completed your first deal and the money is flowing, look for another property. Find a second, similar property in your financial playground and offer the same deal to your partner. Chances are, he will jump on it because he’s been getting those monthly checks and thinking about the big payoff when you sell the property at some distant point in the future.
If your partner can’t do it, find another friend or family member who will. Remember, the deal you are offering is more attractive than the first one since you are now a proven performer! You may very well find that you have multiple friends and family members eager to work with you. Don’t get greedy when this happens and start buying properties that don’t meet your strict financial criteria (like ample cash flow and a dollar-per-square-foot price that is competitive for the area). A potential investor won’t disappear if you explain your conservative investing philosophy and put him on a waiting list. His desire to partner with you will just get stronger.
At some point, as your real estate empire grows, you may seek out an angel investor. “Angel investor” is a term usually applied to other sorts of financial transactions, but the idea is the same. It’s someone with lots of money but not enough time to research and manage every investment he owns. Most of the wealthy guys I know are looking to invest in real estate right now. The problem we face is that we don’t have time to find the deals.
That’s where you come in. As a proven performer, you offer the angel investor a great deal of value. You come with an understanding of the market and the process of buying, renovating, financing, and managing properties. And you also come with a good deal in hand. That is worth a great deal to a wealthy person with lots of money but little time. Trust me.
You can find an angel investor in your community by asking around or even placing small ads in local newspapers. (I know three people who have done this in my community in the past two years.)
The deal you will make with your angel investor is pretty much the same deal you made with your prior partners. You may find that they want more than 25% for providing their credit and their guarantee. (They know the value of this.) Depending on the size of the deal (several houses on the same block, or perhaps an apartment building), you may agree to give them more. But I don’t think you should agree to anything more than 35% for being the signer on the note.
By the way, there is a kicker in this strategy that I haven’t mentioned. After locating the first tenant, you can charge your business for managing the property. (You should form a separate business for each acquisition.) You can fairly charge between 6% and 10% of the collected rents for each of these transactions. That could be an extra $1000-$2000 a year in income for every small property you manage.
All this may seem a little daunting to you if you’ve never bought investment real estate before. But if you add up the hours I’ve indicated above, you can see that you shouldn’t be spending more than ten hours to launch every deal. (These numbers are best guesses, based on my experience. Being a first-timer, it may take you twice as long. But even it it takes you four times as long, it’s still a ridiculously small investment of time for such a big financial benefit.)
Now let’s look at how remunerative those ten hours are going to be for you on a long-term basis. Let’s assume that your plan is to own your first property for fifteen years and then sell it. You could reasonably make $20,000 (maybe more) in management fees over that time, but we won’t count that because that’s really just income you are working for.
Let’s look only at your share of the property appreciation. Assuming that it appreciates at an average of 6% a year over that time period, the $100,000 house will then be worth $240,000. At the same time, let’s suppose the $80,000 mortgage you originally put on the property was at 6%. In that case, after fifteen years, it’s now down to about $57,000.o you also picked up $23,000 in amortization (the reduction of your loan balance). That means the total gain for your partnership is $163,000. Your 50% share comes to $81,500.
Not bad for ten (to forty) hours of work.
Last year, my brother walked away from a $300,000-a-year job to devote himself full-time to cash-flow real estate investments. He grew his holdings from thirty-two units to 101 units in just over a year. His original portfolio was of houses, duplexes, triplexes, and quadplexes.ow, he is buying 20-50-unit apartment buildings at a time.is current cash flow from these investments is more than $50,000. At the rate he’s going, he’ll have 200 units by the end of next year. His five-year goal is 1,000 units, and I would be surprised if he doesn’t achieve it. In five years, his passive income could exceed half a million dollars a year, and he could have many millions more in equity.
In case you’re thinking, “This is not for me,” I want to say this: there is nothing about this kind of real estate investing that is difficult. You don’t need to take any classes to understand it. I learned the business entirely on my own, just using common sense. The main thing is to do your first deal. Invest those ten hours and see what happens.
Once you do your first deal, I won’t have to give you any further motivation. You will become addicted to it. (Making serious money is addictive.) After the first deal, you’ll be eager to do a second one. And after the second one, you’ll become a monster at this very lucrative and very safe way of building wealth.
[Ed. Note: If you're not happy with your financial situation, you're in the perfect position to change it for the better – right now. I've just recorded a special video from my office that covers five profit plays you can use to start growing your wealth. To watch this short video, click here.]
This article appears courtesy of Early To Rise, a free newsletter dedicated to creating wealth and success through inspiration and practical, proven advice. For a complimentary subscription, visit http://www.earlytorise.com.
Carpe Diem
You know that thing you’re scared of doing…are you going to let it stop you today too? No. Make this the day that you finally overcome the obstacles in your way. You’ve got nothing to lose but your excuses.
The time to take action is now.
Craig Ballantyne
“Don’t wait. The time will never be just right”. – Napoleon Hill
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A New American Dream
James Malinchuk grew up in a small Pennsylvania steel-mill town near Pittsburgh as the son of a steelworker and a housewife. Now, he is one of the most requested and highest paid motivational and business speakers and business marketing coaches in America. James has delivered over 2,200 presentations for business organizations, corporations, colleges, and universities, for audiences ranging up to 10,000 people. He as twice named “College Speaker of the Year” by Campus Activities magazine & APCA.
He was also named one of the “Top 40 Business People Under the Age of 40 in Las Vegas”, and was recently featured in ABC’s Secret Millionaire TV show. One of his biggest passions is Philanthropy; James gave away over $100,000 of his own money on Secret Millionaire and has donated and raised over $350,000 for children’s charities in the past six months alone. James lives the new American Dream in a passionate and real way every day of his life.
Discover how to achieve your American Dream and Financial Independence here
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Are You An Existentialist?
By Alex Green
I recently received a letter from an Atlanta Falcons player who told me he quit the NFL not long after reading my book The Secret of Shelter Island.
“I realized I was living someone else’s dream, not mine,” he said. “The truth is I haven’t enjoyed football since high school.”
Some might be surprised that anyone would walk away from all that money and celebrity. But perhaps he’s an existentialist. They recognize the dangers of living an inauthentic life.
Who, exactly, are the existentialists and what do they know? Existentialism is a philosophical movement that came about in the late 19th century. It is not some abstract set of theoretical truths. Rather it is a no-nonsense philosophy that encourages you to take a hard look at your life and ask two essential questions: Who am I and how shall I live?
Its goal is to awaken us from our slumber, have us grab life by the lapels and start living authentically. Unfortunately, there is no particular school that offers a systematic account of existentialism. Its founders were fierce individualists who avoided labels, detested “isms,” and refused to be lumped into any group.
So there is no grand philosophical system here. Essentially, existentialism exists at the intersection of the essays of Friedrich Nietzsche and Jean-Paul Sartre, the novels of Albert Camus and Fyodor Dostoevsky, the religious writings of Soren Kierkegaard and Paul Tillich, and the plays of Harold Pinter and even William Shakespeare (particularly Hamlet and King Lear). Clearly, existentialism is older than the term itself. The philosophy is based on six general themes:
1. Acceptance of the Absurd. Each of us drops unexpectedly into this world, in a universe where time – at least as we know it – has no beginning, space no end, and life no pre-set meaning. It is an inexplicable mystery. This realization is hardly new, of course. Ecclesiastes kicks off with the words “Vanity, vanity, all is vanity. What does man gain from all his labor and toil here under the sun?” (Ecclesiastes 1:2-3). Existentialists believe that it’s only when you confront the fundamental absurdity of life that you begin to live honestly.
2. Personal Freedom. Life itself may be meaningless, but you give it meaning when you begin making important choices. These, in turn, reveal who you are. With freedom of choice, however, comes responsibility. Taking ownership of your decisions means not blaming your parents, your spouse, your teachers, or anyone else for the shape of your life. More responsibility brings greater freedom. And with it: hope.
3. Individualism. Existentialists are keenly aware that society continually pulls us toward conformity. There are immense social pressures to go along, get along, and live pretty much like everyone else. Existentialists challenge you to buck conventional wisdom, express your true nature, and follow your dream, whatever that may be.
4. Authenticity. Most people are so consumed by desire, guilt, fear, or anxiety about what other people think that they find it almost impossible to follow their true calling. However, it’s only when you begin to do what you want – and not what others expect – that you begin to live authentically. But expect resistance. Institutions want to mold you. Other people want you to go on their trip. It’s far easier to live unthinkingly as part of the crowd. Yet authentic individuals are in control of their own lives.
5. Passion. Being passionate and engaged is crucial. This doesn’t mean acting crazy or hysterical. Quite the opposite, in fact. Existentialists believe you should devote yourself to a cause, one that you’re willing to organize your life around, perhaps even die for. For Kierkegaard, that passion was the pursuit of truth. For others, it may be artistic expression, healing the sick, or building a business that employs hundreds and serves thousands. In all walks of life, you’ll find that passionate men and women are more purposeful.
6. Acceptance of Death. Life is finite. Yet existentialists don’t see this as a reason for pessimism. Facing death is what forces you to take life seriously, use your time wisely, and make meaningful choices. It should invigorate your life. As the character Andy puts it in The Shawshank Redemption: “Get busy living or get busy dying.”
Nietzsche, the philosopher most closely associated with existentialism, refers to it as the noble ideal. Your life, he argues, is an unwritten book that only you can write. Or, he says, visualize your life as a kind of artistic project, except that you are both the sculptor and the clay. This concept runs throughout existentialist works.
Martin Heidegger counsels us to learn to “dwell poetically.” Kierkegaard says “to exist is an art.” All existentialists agree that life has the meaning you choose to give it. Sartre even declared that man is “nothing else but what he makes of himself.” This view is fairly widespread in the West today. But it was once considered revolutionary.
The Catholic Church, for instance, decided that Sartre’s ideas were so dangerous that it placed his entire works on the Vatican Index of Prohibited Books – including those he hadn’t yet written! Ideas can be dynamite. And the proclamation that you should live your life on your own terms rather than according to the dictates of an institution was explosive. Perhaps that’s why existentialism is called the philosophy of freedom.
No matter how things stand in your life, you choose how to interpret your situation. You choose how to respond to it. Even if you do nothing, you still have made a choice. There is no escaping the consequences of your actions – or your inaction. This makes some people profoundly uncomfortable, of course. They don’t like facing up to the world as it is. They don’t want responsibility. It’s easier to blame others, circumstances, or “the breaks.”
Existentialism, however, is known as “the no-excuses philosophy.” You may be old. You may be broke. You may be sick. But existentialists say you start from where you are and move forward.
How? By accepting responsibility and making choices.
This isn’t always easy. Pursuing authenticity requires relentless self-examination. It exposes you to things about yourself that you may not want to know. It may cause discomfort or friction with others. But inauthentic lives, by comparison, are shallow, trivial, and unsatisfying. They are often marked by the dogged pursuit of material goods, social status, or the approval of others.
In many ways existentialism is a return to the roots of philosophy, a return to the ancients’ concern with truth, virtue, and the art of living well. Existentialism offers a guide to the perplexed. It shows us not just how to live, but how to flourish, how to create meaning in a senseless world. Those who reject this philosophy often do so not because they don’t understand it but because they can’t face it. And that’s unfortunate.
Existentialism provides a practical way of thinking about the world. It offers personal freedom and empowerment. It is a path to dignity and nobility. An existentialist doesn’t live as though he has forever, frittering away his time and putting off until “someday” the things he really wants to do. He or she recognizes that each day, each moment, is precious and irreplaceable.
Are you an existentialist? Only you can say, of course. But perhaps you should be. Carpe diem.
[Ed. Note: Alex Green, Investment Director of The Oxford Club, has over 20 years of experience as a research analyst, investment advisor, financial writer, and portfolio manager. He is the author of The Secret of Shelter Island: Money and What Matters, as well as the editor of "Spiritual Wealth," a free e-letter about the pursuit of the good life.]
This article appears courtesy of Early To Rise, a free newsletter dedicated to creating wealth and success through inspiration and practical, proven advice. For a complimentary subscription, visit http://www.earlytorise.com.