Is NOW a good time to buy real estate?


… it’s pretty much ALWAYS a good time to real-estate estate.

But there are two BEST times to buy real estate:

1. When REAL ESTATE is on sale

This means that prices are weak, or you can buy the property at a real discount (I don’t mean when the developer listed the property at an inflated price then ‘discounted’ it later!), or you can buy it and ‘tweak’ it (renovate it, change its use, or add value some other way).

2. When MONEY is on sale

Historical interest rates hover around 8% (they have been much lower for the past few years … but, remember when they hit 15%?!), but when they drop below 6% money is ON SALE! This means that you can afford a much larger mortgage payment, and rents can even be higher than your mortgage payment.

Usually, property prices and interest rates work in opposite directions:

When money is cheap real estate prices go sky high (remember what happened to property prices in the last few years?).

When money is expensive real estate is usually cheap (at 15% interest rates, who can afford to buy?).

Soon … or, even right now for some real estate in some areas, for perhaps the first time in living memory, BOTH real estate and money is ON SALE!

This is the big double whammy that you can’t afford to miss out on. How to you take advantage of this?

BUY real estate …. but, do your research: some areas are still dropping … look for areas that have bottomed out (or look for emerging markets)  or you feel are close to it.

Now, here’s the secret …

If real-estate still drops a little, it doesn’t matter! Why?

Because, you will:

1. Buy and hold for the long run

2. You will make rental income (that will increase over time, while your mortgage payments stay flat, assuming you fix the rates)

3. You will lock in your finance for AS LONG AS THE BANK WILL LET YOU … because MONEY IS ON SALE and you want to keep buying it at that price for ever if you can!

There will be plenty of opportunity here to make mistakes … but, the combination of cheaper property prices, incredibly low interest rates (compared to historical averages) and holding for the long term will correct any small errors in judgment made now.

Open your eyes to the bargains that should start appearing soon (if they haven’t already) and …. buy!




It’s NEVER going to be enough!

Pick a number: $1 million, $10 million, $50 million.

It’s NEVER going to be enough …

You see, when you get to whatever number you pick in advance as being THE NUMBER you will find that your expenses magically jump up to meet it … or worse, beat it …


Before you make the number, you are thinking like a [plug in your favorite means to scrape enough money to subsist on: employee, small business owner, plumber/electrician/doctor/lawyer/accountant].

This means that you are dragging in your [plug in your subsistence salary here: $30,000, $50,000, $100,000, $200,000] …

… which just happens to be barely enough to pay your current [plug in your vices here: food, mortgage, car payments, plasma TV payments].

So, getting to [plug in your “I’m really rich’ number in here: $1 million, $10 million, $50 million] really would make a difference … in your mind!

You see, your current lifestyle isn’t your ‘dream lifestyle’, as soon as you improve your Net Worth your dreams also go up!

That means that your $120,000 apartment suddenly becomes $350,000 when you have $1,000,000, then it becomes $1,500,000 when you have $5,000,000 and so on …

Your $5,000 chevy at Just Over Broke becomes a $35,000 Cadillac CTS at $1,000,000, and a $120,000 Maserati Gransport Spyder (oh, yeah!) at $5,000,000.

A better way is to work backwards: decide how much you need to earn each year to finance the life of your dreams (more on this in a later post) and multiply by 20 and that is The Number for you.

The answer will probably scare you into action (it’s the reaction I’m hoping for!) or to death (bummer), but, always keep that Number in mind when deciding what ‘rich’ means to you …




What about the children?

My son is 13 and seems to be learning valuable lessons about finance – mostly self taught – almost every day of the week.

Here’s what we do: we pay our kids their age in pocket money every month (common wisdom is to pay up to twice their age … if my kids read this post, I’m toast). Our kids then have to split their monthly pocket money into two equal piles: Savings and Spendings.

 Savings is for retirement … period. That should be before age 40 or so, if they follow ‘The Plan’ that starts now …

Spendings is for anything we don’t buy them, including: charity donations (over and above what we give as a family), toys (over and above what they get through the normal course of holidays, birthdays, etc.), and cars.

If my kids are smart (they are), they will save much of their spendings for their first car (they know that we will only contribute a maximum of 50% for their first car, they will need to come up with the rest).

It won’t be for college … we will pay for their education (first degree only) and student loans (that they can pay back) can supplement any shortfall.

More on this later … for now, you can imagine the discussions that we are having with our son about his desire to upgrade his perfectly servicable laptop to a Mac.

 He is have to learn how to make fairly sophisticated financial trade-off decisions at a fairly young age, as well as learning how to use equally sophisticated financial logic to argue back …

 … for example, he has already shown us that just 2 hours of work each night stacking shelves at the local Walgreen’s on minimum wage of $6.50 an hour will buy him an excellent car in just 12 months … now, can I have my Mac, please?

The stock market pessimist

I braved the market storm and bought some stocks on Friday (about $700k in Citibank, Coach, Blackberry); for some reason I got bounced out of  Blackberry (RIMM) this morning … I can’t tell, but maybe I accidentally set my trailing stop at 1% instead of 8%?

I must admit, I’m just playing at the moment (see my earlier post: ).

Generally, I admit that I am stock market pessimist … always have been … but not any more … maybe!

This is the point in the post where you say: “hang on … when the market was going UP you were a ‘stock market pessimist’ and now that it’s crashing DOWN you’re suddenly a ‘stock market optimist’? Whattup????!!!!”

Let me explain …

Everybody has ways of making (or losing) money that they are most comfortable with … mine happen to include: businesses, property (residential and commercial, buy and hold), and some other stuff that I will tell you about in upcoming posts.

Fortunately, these happen to be the preferred assets of the Very Rich … just dumb luck and good genes on my part … I suspected but didn’t know for certain that they were the preferred asset classes of the very rich (neither did anybody else) until the book that I told you about in a recent post came out (follow the link just under the chart  and read the book exerpt: ).

So, I was nervous about stocks in general,  until I came across Phil Town’s excellent book on stock market investing called Rule # 1 ( ). Get it and read it!

The book told me how guys like Warren Buffet find undervalued stocks … I just followed the methodology to find my own favorite stocks (I’ll write a post specifically on this) and played a bit in the market with them.

I only invested $1 mill into 4 or 5 stocks … promptly losing $100k … but, I had the opportunity to learn Phil’s process and put in my ‘tweaks’ (Note to self: delete ‘tweaks’ … sometimes it’s best to just follow the formula).

Some of this was learning, some of this was not following the system exactly, some of this (a lot) was bad timing … subprime just as I was fiddling.

This is not a post that says that you should be in the market now … but SOON (where ‘soon = 1 month => 1 year, see: ) … until YOU are sure, there’s nothing wrong with staying in cash (see Phil’s excellent post on this subject ).

As Phil says: “Now, go play!” …

Should you rent or buy?

Should you own or rent? I have seen a lot of rubbish written on this subject … stuff like “renting is just dead money” or “a house is a liability” … so let me set you straight:

 If you are just starting out, up to your eyeballs in debt, unemployed, or you just can’t afford a house right now, it’s simple: you just rent.

If you already own a house, don’t sweat it, keep owning.

 And, if you are ready, willing and able to buy your first house, or you are thinking of trading up (or, down) …. here’s my advice:

Put aside the emotional decisions and just consider the financial impact, and that is: your house is the ONLY way that most people will ever get off the launching pad to financial success …

Why? Because, you are building up equity over time (even a flat or falling real estate market eventually climbs back up again) …

… but – and here is the key – ONLY if you are prepared to put the equity in your house to work for you … that means, borrowing against the equity in your house to INVEST.

Now, if you are buying a house with 10% – 20% down, this won’t be until you pay it down a little and the market picks up a little.

But, when you do build up enough equity in your house to borrow against, you’d better be prepared to do it! If not, then you are FAR better off just renting and investing the money you save on mortgage payments every month …

… if you’re not prepared to even do that, stop reading this blog … you will never be much better off than broke.

When to bail out of the market

What to make of this?

The stock market went up and up – then CRASHED – then went up – then CRASHED … where to next?

Back up? Down more? Big Recession / Big Crash … hmmm, I don’t know … but, neither does anybody else.

Here’s what I do know:

Smart shoppers wait for the Thanksgiving Day sales to buy up the bargains … dumb shoppers buy with the crowds just before Christmas when the prices are marked up sky high.

Same with the stock market … we were leading up to a Stock Market Christmas and prices were sky high … they eventually had to drop, so I stayed in cash and waited …

 THAT was the time to bail out of the market … NOW, it’s Thanksgiving Day Sale time on the Stock Market ….  hurry, hurry, hurry … prices marked down 15% – 20% … even better bargains in finance stocks (remember the sub-prime write-offs?).

So, I am dipping my toes in again … maybe the market will go down again, maybe it will go up … I’m banking on it doing a bit of both with just a little of my money, to see what happens … when I am sure the recession is over (Hint: that will be BEFORE the newspapers publish the official reports, which can be months out of date!), I will be buying up those discounted, quality stocks like nobody’s business!

Want to know how to find ‘good quality’ stocks? Try this excellent book: )

Not convinced? Hear it from a professional at Friday’s post on the Wealth Tycoon Report blog (I don’t necessarily agree with everything these guys say, mainly because they are stock and trading experts, and I’m not, but this is a GREAT post):

 So, will I be dancing in the streets or crying? Well, I hate to cry, so I’ll only invest now what I can afford to lose (I’ll absolutely hate just dipping my toes in: if the market goes up, I’ll kick myself for investing so little … if it goes down, I’ll kick myself for investing anything at all … but, $$$-wise it won’t help or hurt greatly either way).

 Then, when I am SURE (maybe 1 month, maybe 6 months, maybe 2 years), I’ll grit my teeth and wheel in the big buckets of cash … by then, I’ll be educated, real-world tested (for better or worse!), and prepared!

 You should do the same …

Look, Learn, Do, Win!

I mentioned the Spectrum research into how the Rich got rich (and, stay rich) in a recent post ( ).

 I found some interesting data from their web-site that may encourage you to keep doing what you are doing right now (look/learn/do/win!).

First, take a look at this chart lifted right from their site ( ):The Beginner's Mind 

While you expect that Rich people know a lot about finance and investing, isn’t it interesting that at least HALF still say that they have a lot to learn. This is called having a Beginner’s Mind … the most successful people in every avenue of life (especially those who have become Rich) have it.

Now take a look at Spectrum’s next chart:

 The Rich Read Blogs

… it seems that the Rich do look at blogs! Even better, the Richer they are the more they read (or, is it the more they read, the Richer they get?).

Now, take a look at this chart from the same site:

The Rich Get Educated

It seems that as well as looking  at Blogs (and, other sources of financial advice) they are willing to keep learn‘ing … you would think that once you get to $1M – $100M you would feel like you know it all … apparently, not so.

I’ve always had a fascination for learning (I read a LOT more ‘how to’ books than I do fiction), and it seems that I am not alone amongst the Rich. But, I had this habit BEFORE I became Rich … I am sure that this was a major factor in my financial success. What about yours? 

In the end, though, it’s the hard work … the do‘ing … that you put in that counts (see the chart above). Doing means taking risks … and, accepting a measure of good/bad luck along the way …

But, in the end, if you look/learn/do, you just have to Win!

How much does it take to be rich?

My 10 y.o. daughter asked me exactly that question the other night … actually, she simply asked “are we rich”? I’ll tell you how I answered in a minute, because it is important that you understand how YOU would answer this question.

In the meantime, and by coincidence, I came across this blog just yesterday:

It’s written by Spectrum who did some research on what it takes to be rich …

How Rich is Rich?

The problem is that they asked people who were already Rich!

 So, most said $5 million (what? net worth? in the bank? under the mattress?), but some said as much as $25 million. I would guess that this was related to how much money they made … the more they have, the more they spend, so the more they believe it takes to be ‘rich’.

Only 1 in 5 said $1 million, which is what many people just starting on the road to wealth would believe means ‘rich’ … when you get to $1M tell me if you’re ready to retire (I’ll bet the answer is NO!). 

I think the number is somewhere between $100 million and $1 billion …

… as one Billionaire said recently, after his company stocks grew five-fold in less than 12 months moving him from $1 Billion to $5 Billion net worth: “once you get past the first Billion the rest doesn’t matter.

So, how did I answer my daughter?

I said: “we are not ‘rich’ we are wealthy, because we can afford to live the same way that we are living now for the rest of our lives”. 

Now, we aren’t slouches (nice house in a great suburb, the ‘right’ cars, schools, vacations, etc.) but we have no helicopters or Lear Jets …

So, to determine when you are ‘rich’ you first need to determine your Number … that is the amount of money that you need to have ‘in the bank’ (actually in Passive Investments : bank accounts, investment properties, stock market … anything that makes YOU money even while you are asleep) to produce enough income for you to live your current (or desired) lifestyle for the rest of your life (which means, the amount has to be indexed for inflation).

I’ll show you how I worked through this in a future post!




My First Post

If you read my little bio, you will see that I have made a lot of money (really!), but I made it BECAUSE of my passion to learn about money and teach others. I read a lot, experimented a lot, tried lots of conventional (and unconventional) wisdom.

 The result: I made 7 million in 7 years™ … and, I started out broke (actually, worse, with a failed business and owing $30,000!).

 It’s unfortunate, but I have to brag a little in order to get my message across:

Which is, I made 7 million in 7 years following a system – a roadmap is an even better term – that you can follow, too. If you do, you have every bit as good a chance to beat my record … and, I will give you all of the rules that I found that will help speed you along the way …

 I had to find these rules by research, then trial and (lots of $$$ and time-wasting) error; you won’t have to … you will have a true Roadmap to Riches

 … even if you don’t become rich, you will become FAR better off than those around you, because you will have the rules and they won’t. And, even if they did, they won’t follow them, but you will, won’t you ??? 

So, my passion is money. Making it, but more importantly, helping other people to make it as well. I made a ton, and this is blog (and, then my book) will be my way of giving back (of course, I donate to charities, as well).

There will be no ‘get rich’ quick schemes …. but, no ‘get rich slow’ schemes, either. Hell, who wants to save their way to $1,000,000 if it’s going to take them 30 or 40 years?! [Hint: I will teach you what and how to save as well … but, that’s only the first step, like taking off in a plane …. there’s still a loooot of blue skies ahead …).

 So I’lll just be sharing the lessons that took me from broke to 7 million dollars (in the bank!) in just 7 years.

If I am the real deal (I am) why would I bother writing this blog?

It’s a good question that actually has an easy answer: in 1998, I was broke running a struggling business (it was losing $5k – $10k a month; luckily I had another business making $5k – $10k a month to keep me Just On Broke) and my wife was the breadwinner for me and our two babies.

Then I read some books … and, the ideas I picked up helped me to get back on my feet. I started making money, but had no idea how to hang on to it and make it grow even faster.

I found that there were no books that would LAY OUT THE ROADMAP to take me to the next level … getting rich, and more importantly, staying rich!

So, I started to do my own research and experiment on myself, and I got lucky (I made money … lots of it) …

… what kept me going through the hard times was the the idea that I would then help others do the same.

By writing this blog now, I’m giving back … and, if I don’t have a blast doing it, then I’ll stop … because I can.

What next?

Well, books like Rich Dad, Poor Dad and The Richest Man in Babylon were breakthroughs in their time, but very basic … they are like Making Money 101™.

So, I am taking all the lessons that I have learned, together with the lessons from others to write a better book – you can call it Making Money 202™ (I’ll let you know the real title later) – and, sharing them with you through this blog, as I research and write it.

The book will be about how to get ready to make money, how to make money (and, lot’s of it!), then how to keep it (something that many lottery winners, celebrities, and atheletes, don’t seem to know how to do) …

… it will be the first book to lay out a real Roadmap to Riches … not just my way, but in any way that feeds your passion.

Let me know what you think as we go along … not only the good, but the bad as well … who knows, you might just come up with something that should be included in the book …

… but, what I’m really banking on [pun intended] is that you will also make 7 million in 7 years … for real!

Stick with me … OK?