Tag Archives: millioniare

Motion begets motion …

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No, we are not talking about the effect of prune juice of the vital bits of our digestive system!

We are talking about beginning to wind up our Perpetual Money Machine (believe it or not, the above ‘prune bush-driven machine’ achieves both objectives!?) …

… the one that we are designing for Scott who is earning a great passive-seeming income (but, not really because it comes as royalties from various movies and inventions that Scott has created over time, not actually from cash in the bank or the equivalent).

Scott already understands this:

Have some in real estate, but not much. What is your take on the time it takes to start realizing a “substantial” income from real estate?

Longer than you think, Scott 🙂

The problem is that RE has a ‘lag’ time that is hard to estimate: you need to cover closing costs, rehab costs, tenancy costs just to ‘wind the property up’ … and, it’s possible (likely) that you will need to wait X years until inflationary forces push rents up higher than your (hopefully, fixed) mortgage costs (plus the costs of maintenance, vacancies, property taxes, etc.).

Of course, on the PLUS side you have depreciation allowances and tax benefits that can produce paper-profits, but these take very careful management to live off 😉

It’s why building a real-estate portfolio, while you can still seed it with income, is better than waiting until you can cash out (i.e. retire and cash out your 401k; sell your business; discount your annuity/royalty incomes by selling these) … you may find that you become ‘asset rich and cash poor’ for a while.

There has been many a successful business owner who has sold their business only to suddenly become ‘poor’ by putting all of their nest-egg into newly acquired RE  …

… but, that won’t be you, Scott, because you are building your Perpetual Money Machine while you still have increasing incomes.

In fact, this is the key!

You still keep ‘seeding’ your RE portfolio with the same/growing 15%++ of your income until you no longer need to cover the negative cash flows from the current ‘income capacitor’ (i.e. property/s) and have saved enough as a deposit (plus buffer for contingencies) for your next one/s.

You repeat this process until you have too many capacitors/properties to manage, in which case you trade up through a series of 1031 Exchanges until you have a manageable portfolio, and …
Final installment of this series of posts on Friday …

How to build a Perpetual Money Machine!

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Yesterday, we introduced Scott, one of the creators and stars of the success documentary, Pass It On.

Scott wanted to know if his royalty streams (he is also a prolific inventor who teaches others how to invent) meant that he was a multimillionaire.

I’ll leave you to read that post, but the answer, as you may have guessed, is “yes … but” with the ‘but’ being that he has to guarantee his future income by building his own Perpetual Money Machine!

Unlike the world of Newtonian physics, where it is impossible to build a Perpetual Motion Machine (most closely approximated by those desktop ‘toys’ with the liquids or magnets that seem to rotate and swing ALMOST ‘forever’), it is actually quite easy to build a Perpetual Money Machine:

This is ideal – and, quite necessary – for anybody who has an income stream that they want to guarantee …

… and, isn’t that everybody with a job, or in business?

Our Perpetual Money Machine needs two components:

1. An income ‘energy source’ – a source of cashflow to ‘seed’ the machine

2. An income ‘capacitor’ – a means to store/recycle the financial energy until an excess is created

This ‘money machine’ becomes ‘perpetual’ when enough cash begins to spin off to become it’s own energy source …

… but, it becomes useful when it (soon after) also begins to spin off excess cash that we can spend!

Fortunately, this is a lot easier to ‘build’ (at least, in principle) than it is to describe.

Let’s take a simple example:

Joe is working at his job; he earns a income – that’s his ‘energy source’: his weekly paycheck.

Instead of opting to spend all of his money, he decides to ‘seed’ (i.e. save 15% of his gross salary) his ‘capacitor’ (in this case his 401k) until he has amassed $2 million. This takes Joe 30 years.

Joe then retires, reinvesting his nest egg into various ‘safe’ investments (as recommended by his financial adviser) that return 10% every year (in this Utopian world, there are no variances from ‘average’) which is 5% above inflation (ditto for inflation) and Joe can safely spend 5% of a pie that keeps growing with inflation, well, pretty much forever.

Of course, Joe had to work for 30 years to achieve this result and we had to suspend the laws of ‘financial physics’ to make it work, so let’s build Scott a ‘real’ Perpetual Money Machine:

Scott has a current income from his royalties: this is his ‘energy source’ and we can trust Scott to continue to build this energy source even further, but he realizes that all energy sources eventually dissipate.

So, instead of spending all of it, Scott puts at least 15% of his income from his inventions/movies/etc. towards his first capacitor (where he temporarily stores it is of little consequence; a bank is ideal).

Why 15%?

Well, we assume that until now, Scott has been spending all of his income in the belief that he already had a ‘perpetual money machine’ … if not, then maybe Scott can begin with even more than 15% 🙂

As Scott increases his income, now realizing that it is not ‘perpetual’, he also diverts at least 50% of the additional income towards building his Perpetual Money Machine … he sacrifices a little bit of ‘current increased lifestyle’ for ‘guaranteed future lifestyle’.

When Scott has ‘enough’ (and, that is up to Scott to determine) he ‘seeds his income capacitor’ by purchasing an investment property: if Scott wants a series of ‘small capacitors’ he buys residential (houses, condos, up to quadraplexes); if he wants a ‘large capacitor’ he buys commercial (multi-unit apartment complexes, offices, strip shops, etc.).

My recommendation is that Scott uses the largest ‘capacitor’ that he can afford right now … he can always trade up later, if he wants to consolidate into fewer capacitors/properties.

Now, does it have to be real-estate?

Of course not, it just needs to be anything that you can buy/hold that produces an income: it can be divided-producing stocks; Berkshire Hathaway shares (no dividends, but we’ll deal with that later); etc. … but RE is ideal because it can be well-leveraged, eventually produces a mostly-reliable income, but is stable over a long holding period: very handy attributes for a ‘financial capacitor’.

Scott repeats the above process until a  magical point in time … when the Perpetual Money Machine starts to wind itself up!

To be continued … 😉

If it's not Passive, it's Active …

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I received a great question/comment from an unusual source: Scott who is a prolific inventor, known actor (ever see Beethoven 2 and 3?), and movie industry ‘mover/shaker’:

I generate income through intellectual properties… Inventions, movie royalties and so on. I receive royalties every quarter (or so) from many sources, the total of which far exceeds the return on one million dollars in the bank. This is passive (royalty) money.

Irrespective of one’s actual money in the bank, is it safe to say that if one is realizing the income (passively) as if having the millions in the bank, that they are living the life of a millionaire?

Is it safe to assume that if someone were doing this for a living they’d be living as if having the million(s) in the bank?

Even though Scott seems comfortable in the continuity of the income streams (he has “many on the retail shelf and on T.V. with many more coming. It’s just what I do.”), I am not quite as comfortable.

As I said to Scott:

You need to look at the certainty and longevity of those royalties and incomes … unlike cash in the bank, your ‘Life of Riley’ lasts only as long as the income keeps coming in.

You see what Scott has is NOT passive income; it’s BUSINESS INCOME and business income is most assuredly not ‘passive’ … it’s ACTIVE.

‘Active’ implies risk …

Even though Scott can create a product, put a team around it, and set it free to generate ‘passive income’ via royalties, etc. it is not enough to say that Scott is as rich as, say, somebody with enough cash just sitting in the bank on CD’s generating the same income, merely from interest, as Scott earns from the fruits of his creativity.

The money in the bank will keep generating interest for ever … the capital NEVER changes (let’s forget inflation for now, which is the real risk for this ‘money in the bank’ strategy).

You see, each ‘product’ (be it a movie, an exercise bike, a kitchen gadget, or whatever) has a ‘life cycle’ – it will either make money from the get-go or flop … if it is a winner (and, it seems like Scott has the Midas Touch, here) it will sell for a period of weeks, months, years until eventually another product will take over and product sales will die … along with Scott’s royalties.

This may happen quickly or slowly, but it will happen!

Since Scott is great at what he does – and loves doing it – this isn’t a problem for Scott: he just goes ahead and creates the next product.

Financially, though, this means that Scott is like any other professional in private practice: once he does stop creating, either by choice or because of disaster, sooner or later the income will stop coming.

Now can you see the difference between the ‘passive income’ generated by a few million in the bank and a similar level of ‘active income’ generated by Scott’s creativity?

Great! So, what can Scott do?

Well, the same thing as anybody earning an income either through their own sweat/blood/tears or through a business:

Scott could try and estimate the future cash flows of each of his product streams and see how long they will take to die down/ disappear as if he never created another product as of today and basically tie his current life-style to the present value (smoothed) of that future income stream.

If disaster doesn’t strike, Scott can review each year and adjust his ‘smoothed’ income stream, accordingly … but, this doesn’t solve the fundamental problem, so Scott should also:

Build a Perpetual Money Machine …

To Be Continued … 😉

Name one investment that is as secure paying off your mortgage

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I wrote a highly controversial post a while ago about how dumb it really is to pay off your mortgage – especially if you have a goal of getting wealthy (which is the whole point of this blog).

Others, like Ric Edelman and a whole bunch of other ‘Dave Ramsey / Suze Orman Busters’ agree … in fact, when Todd Ballenger’s team saw my posts on this subject they sent me a copy of his new book, Borrow Smart Retire Rich, to review (I am reading it as I write this).

He makes the point very clearly, articulately and forcefully: sometime is Ok t pay off your mortgage, but ot if you want to accelerate your wealth.

However, not everybody agrees; Wealthy Reader wrote a whole post refuting my own post. The arguments basically boil down to these:

Real estate has appreciated at about 3.8% a year historically (excluding the bubble). This is also about the rate of inflation. So unless you are in a hot real estate market, there is no upside.

According to Todd Ballenger in Borrow Smart Rich “since 1945, the median house price in the United States has risen by an average 6.23% per year”. I used 6% in my post comparing R/E to your 401k.

But, would you settle for just average appreciation potential when buying an investment property (remember, we are talking about buying an investment instead of ‘investing’ that money into your own mortgage by paying it down early).

If the average appreciation is truly 6.23%, I could do better than that with my eyes shut … I would just tell a Realtor to buy me anything near the water or in a yuppie area in any major US city – as long as I was prepared to hold it for long enough.

[AJC: Yes, any discussion of RE today says: “well Florida boomed, now look what’s happening!” … yet if you look at quality Florida real-estate over a 20 or 30 year period, you’ll achieve average growth far in excess of the nation’s average … they simply don’t make any more ocean-front land … even my 13 y.o. son knows that. He tells me that land on the lakes in Wisconsin sell for many times higher prices than the land even one block in: one has a rare commodity – access to put your boat in/out of the water – and the other doesn’t!]

If that’s too risky, I would just avoid buying anything in the dust bowls of the US countryside, or in any of the run down ghettos in most major cities – these properties are also included in the average growth rates.

[AJC: Yes, people will say: “But look at Harlem … it was a ghetto, now it’s booming”; this is true of SOME of the dust bowls and run-down ghettos some of the time … if you want to have a better-than-average chance of finding the next ghetto-turned-to-gold find the area/s where the artist colony is … invest there and wait 10 years. You’ll be sitting on gold!  Again, do you think the returns might beat the 6.23% average?]

The bottom line: you should have no fear of meeting or beating 6%+ returns in well-chosen real-estate over a 10 – 20 year period.

The interest is compounding so you don’t just pay 8%. That’s why you pay so much interest over the life of the loan. That 8% is compounding each month (at .6%) on the entire balance. So again there is no convincing argument.

Well, hang on a minute, by paying down your 6% – 8% mortgage to avoid the compounding nature of loans, aren’t you simply avoiding putting your money into another form of investment where the increase will also compound?

I mean, we aren’t planning to spend all that extra money that we could be putting into our mortgages into drinking more beer and eating pizza (yet)!

A simple example would be to put that money into a low-cost Index Fund; don’t they appreciate at over 11% annually – and, at no less than 8% (break-even) – over a 30 year period. And, didn’t I write a whole post showing that investing in real-estate could do even better?

The majority of tax payers either can’t or choose not to itemize.   According to the Urban Institute, only 35% itemized in 2004. Also, there are limitations on deductions.  So the famed mortgage interest tax deduction is mostly irrelevant here.

One Wealthy Reader reader (!), Jeff, jumped on this one saying:

Although trivialized by this blog, the mortgage interest tax deduction is a substantial benefit received by millions of Americans each year. You appear to argue since only 35% of Americans itemized their deduction, that this tax benefit should be completely discounted. This statistic, however, is not persuasive and it provides no insight into the number of homeowners that have mortgages that cannot or do not take advantage of this tax break.

But, if you truly feel that there is no tax-advantage to the 8% claimed benefit of either keeping or paying down the mortgage, what about the 25% – 35% tax-advantage that you would get by ‘investing’ that money instead into a tax-advantaged account such as a 401k?

Or, what about using it instead to fund a fully tax-deductible loan on an investment property (preferably one with depreciation benefits and/or good rental returns as well)?

Finally, Wealthy Reader throws in his ‘trump card’:

There is no investment that is as secure as a paid off mortgage and that also returns 8-12%.

How the hell is a paid off mortgage secure?

Is it because your money is now invested in your house? If so, how is it any less secure if some of it is in your house and some more of it is in the house next door and the one next door to that one?

Is it because the bank can’t touch you once it is all paid off?

Well, if that takes you 15 years to accomplish that (instead of the usual 30 years), what will the bank do if you lose your job and can’t keep up with the house payments in Year 12?

Guess what, they will still foreclose on you whether your equity is 20% or 40% or 60% or even 80%.

Surely the only thing that matters here is investment risk and investment return, after tax?

Like everything else, just run the numbers through a spreadsheet, it doesn’t take a rocket scientist to see that an 8% return is not as good as a 12% return (both must be on the same pre-/post-tax basis) …

… and, if you really can’t find an investment that will safely return 12% over 30 years, I agree: go ahead and pay off your mortgage, because you sure ain’t no investor 😉

Man plans, God laughs …

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Recently, I wrote a post agreeing with Ric Edelman who says that the three most typical financial goals (buying a house, saving for college, and retirement) are a fait accompli [already certain] so why bother?

This opened up a whole plethora of comments relating to goal-setting; for example, Moneymonk says:

I do not think it’s a goal, it become one when you say ” I want to put a down payment of x,xxx on a house, I want xx,xxx in my son’s college account by 18. I want to have x,xxx,xxx by the age 65 in my fund. It when you put a specific amount on it, then it becomes your personal goal.

And, if that’s what you want to do, Caprica conveniently points us to Tim Ferris’ goal-setting process:

I think Tim Ferris has covered this topic in his 4 hour work week book best.

There are doing, being and having goals. Having 7 million dollars is a reasonable “having” goal. It is a good definite goal.

While having a few “having” goals is all well and good, Tim advises to look beyond “having” goals and look more at those things you wished you had time for. These are your “doing” goals (i.e. what do you want to do that you wish you could always do? e.g. play the piano, learn to sky dive, paint, build, etc) and your “being” goals (i.e. what kind of role do you wish you could fulfill with your family (e.g. a good dad), friends (e.g. a helping hand) or become a pillar of the community (e.g. charity worker)).

Tim Ferris, in his interesting book called the “Four Hour Workweek” – although, I can’t figure why anybody would want to work that much 😉 – introduces an interesting exercise called ‘Dreamlining’; he says:

Create two timelines–6 months and 12 months—and list up to 5 things you dream of having (including, but not limited to, material wants: house, car, clothing, etc.), being (be a great cook, be fluent in Chinese, etc.), and doing (visiting Thailand, tracing your roots overseas, racing ostriches, etc.) in that order. If you have difficulty identifying what you want in some categories, as most will, consider what you hate or fear in each and write down the opposite. Do not limit yourself, and do not concern yourself with how these things will be accomplished…This is an exercise in reversing repression.

Now, Tim’s worksheets are great, but when you write your Rear Deck Speech properly (from my 7 Millionaires … In Training! ‘grand experiment’), you will find that it encapsulates the true ‘being goals’ that Tim talks about, and it does it in a really powerful way: by ‘forcing’ you to look back on your life after it is (almost) done.

If you really think deeply about this, the most important aspects of your life are all about ‘being’, not ‘having’, a least not in a purely materialistic sense …

As to the ‘having’ goals, they are important too, and this process and worksheet should help you to think through this.

Here is the way that I think about it:

To start any journey, you need a Destination and then you need to decide when you intend to get there and choose your mode of transport accordingly. You also need to ensure that you have enough money to buy the gas or tickets.

Financially speaking, your ‘destination’ – or the only one that really counts – is your Life’s Purpose … it’s your final stop, after all!

But, the real purpose of this exercise, from a financial perspective, is that it helps you to find you Number (the ‘fuel’ that you need to get there), your Date ( the ‘when’ you want to be ‘financially free’), and the method that you will use to get there (saving, business, investing – real estate, stocks, options, etc.).

Now, some people then like to sit down with a map and travel guide and plan every stop and way-point along the road (a.k.a. ‘intermediate goal-setting’) … for others just traveling the road and taking whatever stops that seem interesting/necessary along the way is good enough.

So, if you then want to do some serious goal-setting of the MoneyMonk kind, don’t let me stop you … it’s probably a very good thing to do!

… but, whenever I try that, I am always painfully aware of how difficult life is to plan.

Who was it who first said: “When Man plans, God laughs?”

But, I need more!

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I’m still receiving questions and comments regarding this post: Will you ever put a penny in your 401k again?

Jeff said:

I can see how some people couldn’t stomach the additional risk of Real Estate investing…and thus the decision to get a company match in a 401K is an easy (near automatic) choice. For me, I want to determine a return that is reasonable for each option, and then compare it to the associated risk before I make a choice.

There are two wrong ways to look at this whole question, and one right way.

First the wrong ways:

1. Shouldn’t I invest in the 401k to get the tax benefits and the employer match?

2. What do I do if the choice between the 401k and the other choices that I’ve been looking at seem close?

You see, the first question aims at maximizing company benefit, and the second aims at maximizing investment returns. These are not the same thing … and neither are they the thing!

The one and only question that you need to answer is:

3. What do I need to do in order to get to my Number?

If you don’t know your destination, any road will do …

… but, once you do have your destination clearly in mind, typically only one road (and, you may have to look hard to find it) will usually jump right out at you!

For one person it may be that the save-and-forget 401k option is right, but for another only a more active form of investment will get their to their Number.

The rule of thumb: the longer the time frame that you have available, and the smaller your Number (say $2 million in 20 years) the more likely it is that the 401k + own-your-own home + remain-dent-free strategies will work for you.

But if your Number is larger/soon (say, $5 million in 10 years) then you have to do something more or you simply won’t make it …

Ideal Budget Allocation?

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___________________________________________________________

Special Announcement: Who did I select as my 7 Millionaires … In Training!?

Click here to find out!

___________________________________________________________

Recently, I pointed you to some typical personal budget allocations at varying income levels i.e. $100,000 p.a.; $250,000 p.a.; and $550,000 p.a. (before tax).

So, I was very interested when I happened upon this chart from Crown Financial Ministries, a Christian organization that helps people with their personal budgets and debt reduction strategies. This chart illustrates their concept of an ‘ideal’ personal budget allocation.

I should point out:

1. This ‘budget’ is after-tax (assume 35% tax rate)

2. Being a religious organization, it (naturally) also assumes tithing (I presume it’s 10% of gross)

3. You can be sure that it represents low-to-average salary levels – given its target audience – so you may want to combine this with other estimates (such as the ones above) for higher income levels.

For most personal finance bloggers this is a way to assess your current budget so that you can make sure that you reign in your spending and save every last dollar.

While this is wise and honorable, I provide these numbers for a totally different purpose: so that you can assess your future budget. This is the budget that you would like to have when you retire.

Use these resources to try and put together the lifestyle that you want to live when you retire – as though you were living it today.

Once you have your Required Annual Expenditure firmly in mind, you will need to account for the inflation that will occur between now and when you do stop work …

… for example, if you think that inflation will only be 4% and you intend to retire in 20 years, you will need to double the income that you anticipated (for 10 years add 50%, and so on).

How will you fund that if you have retired?

By having at least 20 times that saved up on or before the day that you stop work, is how!

401k v Real-estate. A close call, then?

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Special Announcement: After 4 months of ‘try outs’, the Final 7 Millionaires … In Training! will be announced this Thursday on my Live Show this Thursday @ 8pm CST (9pm EST / 6pm PST) at http://ajcfeed.com ….

__________________________

I wrote a series of posts about a hypothetical ‘battle’ between the Mighty 401k and Humble Real-Estate. For those with a sharp eye, I posed the original post as a question, not a recommendation.

However, it is my contention that, for many people, the 401k will lose when compared to many other forms of active investment – including, but not just real-estate!

For those of you who read this highly contentious post – and, the follow-up posts (which you can find by following the ‘track-back’ links listed at the bottom of the original post) – you will, hopefully, realize by now that my point was simply this:

Don’t blindly follow the pack by simply plonking your money into your 401k to get the ‘free money’ employer match and tax-benefits!

Do your homework first … there may be better investment options out there, for you.

The example that I used was comparing the 401k to investing in 4 or 5 single-family homes as rentals; Pinyo said that he ran the numbers and the 401k ‘won’ (but, he didn’t provide any further details) and Jeff says that he ran the numbers are found it to be a close call – you always know that you’re in trouble when somebody begins with “I appreciate your attempt …” 😉

Anyhow, here’s Jeff’s comments:

I appreciate your attempt at explaining why Real Estate investing should at least be considered over equity investing in an employer-matched 401K. I ran the numbers using your assumptions (adding in tax consequences–property and income–and cost of property insurance) and, although the annualized return was much closer, your Real Estate investing scenerios came out slightly ahead. I expected this result as investment property investing usually carries increased risk (and hand holding) and thus should provide increased reward.

In going through the process of comparing investment options, I was suprised by a few things. 1) the Real Estate investment option, according to your scernio, suffered from 8-15 years of undiscussed or accounted for negative cash flows after costs, such as property tax, insurance, mortgage payments, and your 25% unrealized income either due to maintenance or unoccupancy, and 2), more importantly, the overall outcome (equity v. real estate) varied drastically based on 2 assumptions: estimated appreciation of real estate over 30 years and estimated return in the equities market over 30 years. Even a 1% point swing in either of these assumptions made a huge difference in projected outcome, i.e., which investment option was better.

I looked through your blog (not exhaustively) for a post discussing your reasoning behind these 2 estimates, but failed to find one. Since it seems that the accuracy of these estimates (best and worst cases scenerios over 30 years) is essential in determining if either investment option has a clear advantage, I was hoping you could either point me to a post of yours discussing them, or let me know of any books, articles, etc, that led you to your estimates.

As I said to Jeff, the mere fact that it is at least a close call means that it is no longer sensible to just automatically plonk your money into a 401k just to get the employer match.

Surely, your goal isn’t to gain ‘free money’ and/or tax benefits …

… it’s to end up with a sh*tload of money, right?!

You can only do that if you investigate all the options available to you. By that, I mean all the options that interest you!

For me, that’s stocks (but not mutual funds); real-estate (but not single-family homes); gold/silver (but not other commodities); etc.

For most people, it will simply mean putting up the 401k scenario against one or two other choices, just as I did in the original post with real-estate.

With all the online calculators available out there, it’s not hard to do a rough analysis, using the 401k option – with numbers that make sense to you – as your baseline.

If, as Jeff found, it turns out to be a close call, then stick with the 401k … it’s simple and at least gives the appearance of being low-risk.

For me, though, if it’s a close call I usually choose the most ‘active’ form of investment as I know that I haven’t factored in all the upside potential.

But, to answer Jeff’s questions; it all boils down to your estimates – or at least appears to:

Now, while I used 8% as the return from the 401k to allow for the very-slight-risk (even over 30 years) that you will pick the worst market time to start investing, you will find that the typical index fund will return upwards of 11% over 30 years minus costs (index fund costs; sales commissions; employer admin; etc; etc.).

This all depends upon your 401k and the options that your employer allows – a reasonable rule-of-thumb is to allow 1.5% for costs. So you could rerun the numbers at 9.5% returns.

Now, what company match will you assume? I allowed 100%.

However, will your employer give you 100% match now and for the next 30 years (since, you’ll likely change jobs 4 times in 30 years)? Think very carefully before answering this question!

You will also find that your contributions are maxed to $15k or so a year, which kind of makes this analysis moot, because any serious investor will be wandering what to do with the rest of the money that they want to invest.

On the real-estate side, according to Todd Ballenger author of the new book Borrow Smart, Retire Rich “since 1945, the median house price in the United States has risen by an average of 6.23% per year”. Others will quote studies saying that single family homes only keep pace with inflation (currently 4% – 5%).

So, I selected 6%, which I feel is a little low, and allowed 5.25% for a fixed mortgage (which, now, is also a little low), and 5% rental return (which will start to become a little low again), and 25% of all other costs (incl. insurance, property taxes, R&M, etc.) which could be high or low.

Again, run the numbers and if it’s a close call, don’t bother with the investment option.; stick with the set-it-an-forget-it 401k.

But, let me pose a small question: does investing either way do it for you?

Does it make your Number?

If either way does (and, in the time frame that you want to get there), don’t sweat it … again, go for the 401k and relax.

Life wasn’t meant to be that difficult 🙂

But, if it does not ‘do it for you’, hang tight, I have more for you soon …

I'm about to find out if you can make money online – Part V

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I spent most of yesterday’s post talking about starting businesses (for College-age kids, but it’s a great way to go for anybody looking to start something low-cost and part-time) … so, it’s time to update my occasional series on starting an on-line business!

But, we’ve tried the scams and ignored the schemes and so far haven’t yet found an “off the shelf” way to make money online.

So, now it’s time to try Plan B: create my own Information Product.

My plan is to take some of the information that I have already published on this blog and my other one and turn it into an e-book. The purpose isn’t to make money for me … it’s to show you how you can make money online.

So, I will ‘open up the books’ here [AJC: if I can find an easy web-based tool for accounting that let’s me publish reports, I will literally ‘open up the books’ so that you can see how it works out, financially … let me know if you know of one?] …

Why Information Publishing?

Well, it lets me do something that I won’t do on my blogs: turn stuff that I know into stuff that I can sell … and, it allows me to sell all sorts of affiliate stuff (so, all the referrals that I make to various books and other useful products on this site, without any financial benefit to myself, can be sold WITH affiliate commissions on the new site).

Again, for your benefit. How?

Because you can think of some area where you are (or can quickly become) an ‘expert’ and follow in my foot-steps … assuming that my site produces a useful income. That’s the purpose of this test!

So, as I write this post I am literally sitting down having this morning hit on the concept for a commercial version of my blogs, and am looking for the ‘right’ way to implement it.

For this, I have decided first to try out Derek Gehl’s new product, BeBiz – supposedly a way to create an sales-oriented internet site pretty quickly … since I don’t yet have the product (I am thinking an eBook to start with) or the means to create my own web-site from scratch, I am hoping that this product will lead me ‘by the hand’ as this product demo [AJC: which I have just paused to write this comment, and which I am about to continue watchingbefore typing and more] promises.

We shall see …

[AJC: Rather than fill this blog with more posts on this subject, I just created a brand new blog – yes, AJC is officially an idiot … instead of sitting back in his hammock, drinking pina coladas like he’s supposed to be doing now that he’s fully and healthily/wealthily retired at 49 years old, he wants to create yet another blog to fill in his time! I hope to use this blog to chronicle how to start an easy – well, I hope it will be easy – web-site that actually makes enough money to make it worth while for somebody like you … and, I plan to do that one in ‘real time’ i.e. write posts as I do stuff on that blog]