I was brainstorming to find money to get my current project off the ground. Where do you find money that isn't being utilized and invested to it's highest and best use? Here are a few ideas that I thought of this morning:
1. savings accounts
2. money market accounts
3. certificate of deposits (cd)
4. stock market accounts/portfolios
5. bonds
6. mutual funds
7. home equity lines of credit (heloc)
8. whole life insurance policies
9. retirement accounts (401k, roth, sep, self-directed ira, etc.)
10. seasoned llc's (lines of credit)
11. commercial lines of credit
12. bridge loans
13. home-improvement loans
14. "hard" money
15. venture capitalists and angels
16. non-profit organizations (assets=collateral)
The next questions is how to get access to these sources of money. Who has the access?
1. friends
2. neighbors
3. past clients
4. previous/current investors
5. current investment owners
6. business owners (of successful businesses)
7. referrals
8. employees/employer/coworkers
And what do they need to feel secure enough to lend that money?
1. promissory note
2. trust deed
3. great deal (low risk)
4. personal guarantee
5. sufficient return on investment
6. reasonable time-frame (short)
7. control/ownership
8. confidence in your ability to perform
Tuesday, October 14, 2008
Friday, October 10, 2008
IRAs Not Safe in the Stock Market! 2 Trillion Lost in Last 15 Months!
Trillions of dollars have been lost in the stock market over the past few months! It seems that trusting someone else with your hard earned retirement money is not the best move, although there was a boom just a few years ago. This recent story shows what has happened over the past year to most peoples retirement accounts:
So how do you protect your nest egg, how do you guarantee that it will still be there when it's time to retire? The answer is to take resposibility for it and put it where you're sure it will grow. I've been introduced to a copmany that allows a true self-directed IRA account. This company is Entrust Arizona. They allow you to move your current IRAs into their IRA plans. By doing that you gain 100% control and 100% responsibility for your retirement funds.
Once you're in control you have unlimited options for investing. You can invest in real estate, provide personal lending, private lending, promissory notes, gold & silver, etc. My personal favorite in income producing properties! Not only does your account benefit from the positive cash-flow but your purchased asset will be paid for by the tenants, your property will appreciate in value and it all grows tax-deferred without worry or need of the 1031 tax deferred exchange! This is an amazing and powerful opportunity to take control of your retirement and guarantee that it will continue to grow!
Thursday, October 2, 2008
Carry On
It's easy to fight when everything's right,
When you're mad with the thrill and glory.
It's easy to cheer when victory is near
And wallow in fields that are gory.
It's a different song when everything's wrong,
When you're feeling infernally mortal.
When it's ten against one and hope there is none,
Buck up little soldier and chortle,
Carry on, carry on! There isn't much punch in your blow
You're glaring and staring and hitting out blind,
You're muddy and bloody but never you mind,
Carry on, Carry on. You haven't the ghost of a show.
It's looking like death, but while you've a breath,
Carry on, my son, carry on.
(Robert W. Service quoted by Brian Tracy, "Success is a Journey", p.103-4)
I have been feeling a bit frustrated with the people I've been talking to lately about investing in my projects. Life would be easy if we were in the lending frenzy of 2 years ago but things are not like that now. So putting money together for a project has become the most challenging part of the task. Right now I have a project that shows an estimated profit of about $100,000. I need about $50,000 for the initial investment (and cost to change), property's current value is $380,000 and the future value is $540,000. The worst case scenario is that we hold this property long-term with a positive cash-flow. But everyone is so scared of the market that they are not thinking clearly anymore.
I have additional projects that could move forward if the financing was there but this is one of those moments when things look bleak (feeling infernally mortal). But I'll keep pushing forward. There are level headed investors who'll recognize a good deal when they see it and I'll still make these projects work.
Wednesday, October 1, 2008
Embarking on a New Endeavor
"Whenever you embark on any new endeavor, you will be beset by countless little problems, details, unexpected irritations, difficult and dishonest people of all kinds. They go with the territory. They are an unavoidable part of the price you have to pay to accomplish anything new or worthwhile." (Brian Tracy, "Success is a Journey", p.84)
It seems to me that whenever you start a new project or begin a new idea there is a learning curve, a discovery of things you never knew you never knew. The little problems and details come up because, at the start, you are unprepared for the situation. But life teaches you what you need to know, if you are willing to learn from the experiences. Most of the people I have dealt with so far, are unwilling to learn and falsely believe that everything should just work for them (maybe because they are somehow special). But once you learn that thing you are prepared to work through or deal with those issues.
Dishonesty is just something you have to deal with and be prepared for. I believe that most people are honest, or trying to be so. There are, however, enough people who allow themselves to be dishonest that you have to be prepared for the situation. When we are preparing for a project we get at least 3 bids. The lowest and the highest bids are often filled with problems. The lowest bid provides a number, better than the rest, but then you find all the hidden charges on the back-end. The highest number just builds those back-end cost up front. So the middle bid is usually the most honest bid.
In spite of the problems of starting something new or worthwhile, it is still worth it. We don't abandon ship just because there is a storm or something unpleasant. We learn how to deal with the problem or learn how to avoid the problem in the future. But we must learn to press on and make our visions of the future a reality.
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