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So I haven't updated in a while & I'm about to go into the reason for that. Last you heard about ME I had a shitty retail job. It didn't pay well nor did it last long but it got me enough disposable income to invest with. I looked on craigslist for for sale by owner with owner financing houses. One of the guys I contacted was an investor & he sent me to his real estate agent. His real estate agent was top notch. She invested herself as well as was an agent she owned several rental properties & did property management too. She was exactly what I needed. She said I was smart & agreed to mentor me, knowing that she's be my agent for all transactions. She had a working relationship with the head of a local bank. She sent me to him first.
She said he would give me a revolving credit line of $50,000 because I was working with her. The plan was to first flip a house. I looked at several houses and found one that would have a good profit margin. My real estate agent was also a general contractor & knew the best rehabbers. I submitted an offer on the house but the guy at the bank was home sick so he couldn't provide a letter guaranteeing funding. I ended up loosing the deal. The guy ended up not giving me the revolving credit line. Right around this time, instead of getting a Christmas bonus my husband got a termination notice.
I had been wanting to move since October so I had already been applying for jobs everywhere. After a couple of interviews I accepted job in my field in Arlington, TX. I'm very happy with my job. Which brings us to my present situation. The real estate market is very different here, meaning successful. All of the cheap properties have already been bought by investors & I need to change my strategy. I'm thinking of moving to notes. This leads me to my next prediction. Although, the housing economy is recovering it is recovering for the wrong reasons. All of the foreclosures are being bought by investors not owner occupants. The majority of people still can't afford a house because of the inflated prices. Investors are artificially inflating the prices of houses & this will cause a second crash in real estate.
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So this seminar was good. It was all about hwo to set up a real estate investing business that runs itself. Here are the notes!
The main way to automate is to have employees & processes. The processes are basically just a lot of checklists & forms. The first person he hired was an admin assistant. For hiring of any position he would do group interviews & start it with a video explaining the job, benefits etc. so people could leave if they weren't interested anymore. He would then do individual interviews. On works first day he also had a pre-made video setup to answer first day questions. the second position he filled was a seller, then a liason, and then he replaced himself with a buyer or someone to buy the properties.
The buyer he got was a rookie relator. he just needed someone who could follow instructions, someone he liked, & someone who fit & understood the criteria.
He'd have people call in to sell him their home. Then his buyer would check it out with a package of papers that would include a checklist for rehabbing costs so he could calculate the offer price.
At the office he would have files for: Tenants, properties, Insurance, Expenses, & Private money.
He had a 0 tolerance late payment policy.
At the end of every week, he would have the admin assistant put together 10 packets with all the forms in it.
It basically came down to having a form & checklist with all of the information on it easily accessible for his employees to use. He developed his system by having policies & procedures as well as check sheets & reports.
He suggested getting a box & putting the real estate section of the newspaper in it by always putting the newest paper on the bottom.
He also suggested re-submitting MAO offers on the 20th of every month.
He would also keep a list of properties & their payments on the board.
He turned his system of forms into the zzz real estate system online. It's expensive. |
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I attended a notes seminar. Here are my notes on notes!
When we say 'notes' we mean debt. Think of mortgage notes. When you buy notes your buying them at a discount.
Buying 'non-performing' notes is cheaper. Then you can negotiate with the debtor & modify the loan terms to get them paying again & turn it into a performing note.
You can find notes to purchase through hedge funds, private equity funds, and Mortgage Service Companies.
Before you purchase a note you need to research the title & property taxes.
To Value a note you need to analyze several things:
1.) the debtor: What is their income, employment?
2.)Collateral: what's the value of the house etc. as is & factor in the price of foreclosure
3.)Payment History
The second half of the not is the most valuable since the payments on the beginning of loans are mostly on interest. You can sell the first half of your note. Re-performing Bankrupt notes are good.
You should use a loan servicing company to get the $.
Most people pay 30% down.
You can purchase the note & if it forecloses you can put a renter in it & seller finance short term to other investors. |
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I attended a seminar on investing using mobile homes. Here are my notes!
Mobile homes are approximately 50 ft. x 100 ft. Use these measurements to determine how many mobile homes you can fit on your land. You can rent each lot out for $400-$500.
You need to ask the county engineer for the county subdivision regulations.
If you become friends with other mobile home park managers they may be able to sell you used mobile homes & tell you when someone is looking for new land to lease.
Avoid lease options.
Using a title company is not required.
You do need a license to sell mobile homes.
www.tdhca.state.tx.us records mobile home titles & serial numbers.
If you need to evict, the best way to do it is through the Justice of the peace.
If you structure your renters as 'rent to own' then you can save money on taxes depreciating them but it's not possible to do with a 'land home'. |
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These are the notes from a webinar I attended by Robert Kiyosaki. Robert Kiyosaki & his team predict:
* The DOW Jones will decrease to about 7,000 somewhere around 2016
*Investment companies are buying foreclosures in bulk so there will be less forclosure's on the market
*This will cause a increase in the price of single family homes
*Rents will increase by 5% a year
*Interest rates will stay low to stimulate he economy
*More construction in RE
*Values are high so sell non-performers
*Keep an eye on oil & gas tax benefits
*Taxes will go up for middle class
*Capital Gains will up
*Investment Income will be taxed unless you qualify to be a 'real estate professional'
*Everything is going to go mobile
*Teachers may not be needed because of mobile learning
* Commission Sales professionals may become obsolete
*The US will become the world's largest exporter of energy including gas
Facts:
*Buy apartment complexes near workplaces in successful industries: Healthcare, oil, tech
*Interest rates are low for investors because most people are saving their money in banks which they then have to pay interest on |
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I attended a seminar on owner-financing & here are my notes. There are a couple of ways to do Owner-financing.
Subject to:
Is where the buyer takes over the payments of the current mortgage. You don't have to find a mortgage or get approved for one. The lender or bank is not involved in this decision, no paperwork to fill out. The buyer pays the mortgage company directly.
Paperwork: due if trust to secure assumption or performance. Assumption warranty deed with vendor's lien.
Wrap around mortgage:
Seller acts as bank. Buyer pays seller, seller pays mortgage company
Paperwork: real estate lien note, deed of trust, warranty deed with vendor's lien.
Assignment contract
This is where you tie up a house with a contract & set the close date in a few months. You then sell your position in the contract for a premium.
There are inharent risks when owner financing including:
Due on sale could come up
Buyer's payment history could affect seller's credit
Property damage
Foreclosure
Then he talked about two different programs he used to help with the paperwork of owner financed deals. I don't know if these are proprietary/his or not. He called them IMAP. He basically said anytime you are selling something useing owner-financing you should over-disclose everything.
IMAP: intermediary mortgage assumption program
Paperwork Includes: contract, addenda, disclosures, using qualified individuals to qualify prospective buyers for subject to or owner finance
Imap1:
Assignment contract. Paperwork Used: AWDVL& DTSA.
Imap 2:
Places property under contract & sell it to yourself. I think this strategy is used mostly for people selling properties to their 401K or IRA. Paperwork Used: WDSP & DTSP.
Regardless of if you use the IMAP system the following disclosures should used:
Disclosures:
Use TREK Texas real estate standard license
Use 'ability to assign' instead 'and or assigns' in contract
Look for due on sale disclosure
Terms & conditions
Seller is not being released from liability
Authorization to communicate with the mortgage company & poa
Required in Texas: property code underlying lien disclosure.
Underlying lien acknowledgment
Elections of title evidence
Acknowledgement of the transaction
Acknowledgment of insurance
Acknowledgement of mortgage processing options
Acknowledgment of mortgage servicing options
Necessary applicable laws to follow:
TX property code ch. 180
TX dept of savings & mortgage lending
Dod frank
Safe act:
Investors only allowed to sell 5 houses per year from investor to owner occupant. Afterwards can't negotiate & must provide disclosures. Solution: Make multiple companies.
Other things of note:
Due on sale does not prevent owner financing. Due on sale is optional, contractual only not legal. Seller is not released from liability until mortgage is due even if sold.
No license needed to sell owner finance
Financial planning trust does by enact due on sale clause
Tax breaks pays off down payments within 3 years
MIP: mortgage insurance. |
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All I can say about this book is wow! It is DENSE and has a ton of useful info in it. It's also organized by sub sections inside each chapter to make it easier to digest. So let's get into it!
Personal characteristics that help with real estate investing
1.) Let your enthusiasm inspire others.
2.) Develop relationships with everyone involved in the deal. Check people's fb to learn about them
3.) Be a showman. Fancy dioramas and miniature's can attract financing. Hire well known experts.
4.) Be better prepared than anyone else.
5.) Be tenacious. Do the work no one else wants to do.
How to choose Properties
1.) Be willing to pay a premium for prime location.
2.) Don't buy without a creative vision on how to add significant value. Spend money where it will be seen.
3.) Trump looks for these in location:a.) Great Views b.) Prestige c.) Growth Potential.
4.) Creative problem solving leads to big profits. Reduce your offer for each problem.
5.) Write a preliminary business plan before you buy.
Principals of Negotiation
1.) Insist on negotiating directly with the decision maker not their representative.
2.) Create the aura of exclusivity. Play up the uniqueness.
3.) Don't be misled by the aura of legitimacy. The words "Standard","suggested", "average" and "firm" are used to prevent negotiation. Information provided to you is probably biased.
4.) Every negotiation requires pre-planning.
5.) Avoid a quick deal. The more time someone spends on a deal the harder they'll fight to make it work.
High powered Negotiation tactics
1.) The goals of Negotiation. a.) learn the other parties position. b.) understand constraints around deal. c.) define 'fair and reasonable'. d.) asses your side e.) asses the other side
2.) The sources of negotiation power a.) Good record keeping b.) Pre-printed forms c.)company policy d.) knowledge e.) willingness to take risk f.) Time
3.) The 5 characteristics of a skilled negotiator a.) personality b.) knowledge of subject matter c.) ability to organize info. Make a we/they list which organizes desired outcomes from negotiations d.) knowledge of human nature I.) exclusivity II.) Avoid info overload III.) aura of legitimacy IV.) satisfaction V.) Don't seem too superior VI.) People love something for free VII.) admit mistakes VIII.) Resolve important issues right before the deadline IVV.) get them to spend a lot of time VV.) Offer to be the one who does the menial work
e.) ability to find & exploit weaknesses. Ask indirect questions.
4.) Critical Do's & Don'ts on Negotiation a.) don't talk about your weaknesses b.) don't believe in bogey's c.) Don't assume they know what you know d.) don't trust your assumptions e.) don't accept offers immediatly
5.) POST time for negotiations. p:people attending o:objective you s:strategy t:tactics to be used. Review immediatley after every negotiation.
6.) Telephone negotiations. a.) people under-prepare for phone negotiations. b.) You can't read facial expressions c.) Interruptions are deadly d.) someone could be listening e.) you can't examine documents f.) people want a resolution of some sort. I.) when someone calls ask what they're calling for, then listen
7.) Use deadlocks & deadlines to your benefits. Leave room for people to save face.
The Trump Touch
1.) Be distinctive & add sizzle. Include unusual, dazzling features.
2.) Give customers the ultimate in perceived quality. Spend money where it will be seen.
3.) Understand your buyers lifestyles.
4.) Know what your customers will pay extra for and what they won't.
Tactics for attracting lenders & financing.
1.) Make lenders want to do business with you. Get a small loan & pay it back. Get a medium loan. Pay it back. Always be able to pay off loans early without penalty.
2.) Borrow as much $ as you can for as long as you can. A mortgage broker may be useful.
3.) Borrow from someone you've done business with before.
4.) How to attract investors. a.) put your $ where your mouth is b.) Look for investing clubs or syndications
5.) Don't sweat the small stuff
6.) Mortgage alternatives a.) FHA b.) VA c.) Home path
Use the best RE specialists
1.) Hire people based on reputation & previous work
2.) Be willing to pay a premium. a.) Hire a CM instead of a GC b.) reward being early instead of punishing for being late
3.) Play up the prestige of your professionals.
Trump Marketing Strategies
1.) Sell the sizzle. Advertise it.
2.) Showing the property. Use a interior designer. Play up the unique features.
3.) Use dazzling presentations. Video can help sell. Model miniatures etc.
4.) Advertising strategies.
5.) Use intelligent promotions
6.) Marketing to home buyers & renters. State benefits that your customer needs.
How to manage property
1.) Develop an eye for detail
2.) Treat tenants as treasured customers not problems. Offer superior customer service & amenities.
3.) Be vigilant about repairs & upkeep.
I told you it was dense!
Sincerely,
The Ambitious 20 - something |
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I attended the free webinar by Rich Dad Education on Foreclosure's. These are the high points.
Banks have been witholding their foreclosure inventory & will be releasing them onto the market by Dec. 31st.
Your monthly mortgage payment goes to pay for the previous month. So if your mortgage is due on the first & you pay it on the second then you're 30 days late, not 1 & they start acting as if you are in pre-foreclosure. After three months, a date for the sale of your house will be set where it will be auctioned, sold, or repossessed. The sale could be a week away or years away depending on the number of foreclosure's in your area. At the sale, the properties could be bought by a person to live in, it could be bought by an investor, or it could be sent back to the bank as an REO, or Real Estate Owned. There are so many foreclosure's most foreclosure's are being sent back as an REO. Short sale - means that the bank is willing to sell the property for less (short) than the amount of the original mortgage.
Pre-foreclosure is the most dangerous for investors because there are too many variables and too many entities involved. Foreclosure sales & auctions are also dangerous for beginning investors because seasoned investors are there and can bid you up. The atmosphere of auctions can cause you to spend too much money.
Buying REO from banks is safest. Why? According to the FDIC: Once the bank has the REO back they have 180 days to sell it or they have to put 5x the lost mortgage in escrow. Banks operate by fractional reserves; they can lend 10 fake dollars for every 1 real dollar they have in reserve. They can't lend against anything in Escrow. The FDIC says they also have to maintain a 2% profit in order to stay in business. Go to the REO realtor in your market and ask for the REO list that are 100 days or older. After foreclosure, all liens and deeds are clean. All REO have clear titles.
Depending on Strategy you need to know:
You need to to know the comparable sale values.
You need to have your real estate strategy.
You need to know the after repair value & the cost of rehab.
Fair market value
Days on market
Far market rent, fair market lease, vacancy rate
Don't use a realtor to get rental information, get rental info from a property management company.
Try to use OPM
Traditional funding is still available. They have to lend more because there's less people borrowing.
Hard money lending
Private Money lending
Traditional funding will run out. When the bank declares a 'holiday' when it's not a holiday, it's a sign that it's time to go to hard money. Another excuse the bank will use is that the property has to 'season' because they know the current value of the property won't be there later.
Cautiously Optimistic,
The Ambitious 20-something |
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Kiyosaki says there are 16 streams of Income. Here they are:
Earned:
Wholesale: Only earnest money to submit offer, no credit, no risk. 5-10k income
Foreclosures: Pre-foreclosure: Banks are negotiable, families want to save their credit
Auctions, REO. Easier to buy in bulk
Short Sales: Can be done on foreclosure & REO. Easier to buy in bulk
Rehabbing for profit:
Options
Discount Notes & mortgages:
Profits & probate
Land
Commercial: Any units over 5 is considered commercial
property Management
Passive:
Rental
Lease Options
Mobile Home & RV ParksDiscount Notes & mortgages
Commercial
Portfolio
Creative Financing: Seller Financing, wrap mortgages, Hard money lending
Tax Liens& deeds
Discount Notes & mortgages
Asset Protection & tax relief
OPM:
Partnership
Seller Financing
Equity Line (HELOC)
Hard Money Loan
Signature Loan
Sincerely,
The Ambitious 20 - Something |
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The "Fiscal Cliff" is a term used for the fast approaching Dec. 31 2012 expiration date of lots of tax cuts. The more tax cuts, the less $ the US has to pay off the national deficit. Congress can either a.) pass the buck and revise/renew the bill extending the deadline and tax cute or b.) allow the tax cuts to expire.
Results:
110 Billion $ in spending cuts per year, I think up to 600 Billion. This would include 55 Billion $ in cuts to the defense sector (bad time to be in the military), and 55 Billion in non-defense.
26 Billion in unemployment benefits will expire. People on unemployment should start looking for work.
Taxes will be increased by 500 Billion$ in 2013
Results:
The tax cuts from Bush expire & will have the same effect of increasing it by 166$ billion. Most people will move to a higher tax bracket as part of this.
The credit for having a kid will go down to 500$ not 1,000$.
The deduction for sending that kid to college will change from 2,500 for the first 4 years to 2,000 for only the first two.
Capital Gains will go from 15% to 20%
Unearned income (including dividends & rental properties) will be taxed at your normal Marginal Income Rate. That's huge.
Itemized deductions are going to be phased out.
The tax exemption for estate tax will be lowered from 5.12 million to one million. Only the first million will be exempt from taxes when you die & the tax rate is increasing from 35% to 41%-55% PLUS an extra 5% if you have over 10 million. That's huge and you need to re-structure your estate immediatly because of it. The your spouse can't move the money either.
The Alternative Minimum Tax is decreasing also: Married Filing Jointly REDUCED to -> $45,000 Single REDUCED to -> $33,750
The Payroll Tax exemption is expiring, which means the employers are going to be pulling more money out of your check. Increases from 4.2% to 6.2%
There's some important effects of deductions for small businesses. Go here to read about them: http://www.section179.org/simplifying_section_179.html
If your AGI is over 200k you're going to start being taxed for 'Obamacare' to the tune of .9% on earned income & 3.8% on unearned income.
Good Luck to us all!
The Ambitious 20- something
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This book is more about managing other or a team than self-improvement or finance.
The basic premise is that the traditional way buisinesses motivate their employees (by positive & negative reinforcement) doesn't work in a new economy based on creativity. To make people work harder, most companies offer bonuses but when creative people are offered such incentives studies have shown they don't perform as well. This is because of what the author calls the third drive or i-drive, that stands for intrensic, inherit, or internal. People want to do things for self-improvement and because they enjoy doing it or just because. By offering a reward for a particular action that they would've done anyways, you signal to the employee that their enjoyment of it is unfounded. A reward feels like a bribe and makes them want to work less, even if they enjoy it. The traditional form of motivation still works for simplistic, mechanic, or routine work. It's usage is improved for explaining why the task needs to be one and why the reward is offered. Rewards can be used for creative work if used as more of a surprise, especially if they are not tangible and are more praise based. The author calls it 'now that' rewards instead of 'if then'. This is especially effective when the reward gives feedback.
To encourage 'type i' behavior:
give employees autonomy over: how they do their work, when they do their work, and who they do their work with, and what they do. You can inspire them by giving them time to work on other things and develop new ideas and processes.
The author then goes on to talk about 'flow'. 'Flow' is a state of mind where the person is happily engaged and attentive to their task; time could go on for hours, they forget to eat, they're enjoying themselves, they're operating at their peak. To encourage 'flow' give your employees 'goldilocks tasks', tasks that aren't too hard or too easy. To achieve mastery, employees need to believe that they can be improved. Businesses can be rejuvinated by introducing a purpose.
Sincerely,
The Ambitious 20 - Something |
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This is an example given during a Rich dad Webinar that I wanted to share. It basically talks about how to setup a mobile home park.
1.) Buy 4 mobile homes @ 5k each on your credit card. Use dealers networks or craigslist to find the deals.
Rent a lot to put them.It doesn't matter how much it costs to rent the lot since you'll be passing the cost on to your tenants.
Charge your tenants enough to cover your monthly cc payment, your lot payment, and for you to profit. Basically double the total of your cc payment & lot rental fee.
For the first 4 months put 100% of your profits or cashflow towards your credit card debt. It sounds counter productive but you will be increasing your cashflow.
At the end of the first 4 months, call your credit card company. Tell them that you want to expand by buying more mobile homes, that your current mobile homes are cashflowing, and you've been making your monthly payments on time. Hopefully, they will increase your credit limit.
Buy 4 more mobile homes using the same parameter and steps above. At month 8 get another credit increase & buy more mobile homes.
Repeat these steps until you have 32
Once you have 32 your business will be fully developed and producing a nice cashflow you can live off of forever.
If you want to you can sell it @ 10% discount (so you can find a buyer) with 20% down. Bypass the banks and take the note/mortgage yourself. By doing this you will still receive monthly cashflows in the form of the buyers monthly mortgage type payments but since you are no longer the owner you don't have to pay for the maintanance of these mobile homes.
There's 4 different types of Passive Income Streams:
Rental
Lease
Discount Notes & Mortgages
Mobile Home & RV Park
If you keep the RV park it would obviously be the last but if you sell it & keep the note, it's the third. If this were an apartment complex It would be the first.
Sincerely,
the Ambitious 20-something |
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Rich Dad has a ton of great webinars & I always learn so much from them. This is a review of their forex webinar.
The Basics:
Forex is currency exchange. The Base is the currency you are buying, the quote is the currency you are selling. EUR/USD means you buying euros with US dollars.
The price of forex changes according to the pip. A pip is the smallest fraction of a penny that that system uses. In 1.516296036, 6 is the pip. In 3.5284, 4 is the pip. When the price fluctuates it will be the pip, or last number that changes. In the example 3.5284, if the price increases to 3.5286, or increased by .0002, then it changed by 2 pips.
The dollar has lost 70% of its' value. Inflation effects all currencies, but not commodities.
Forex market operates 24/7 and has no commissions.
Forex is bigger than all other financial markets.
Higher leveraging than other investments
With leverage you will only loose your initial investment. Limited Risk potential infinite reward.
The banking hours will depend on which currency you are trading. The Australian currency operates according to the banking hours in Australia.
3 Cycles in Forex:
News Based events
Banking hours: Banks are open & trading
Slow Time Trades: Banks are closed
Strategies:
Buy low, sell high
Short sale: Sell it when it's high and then buy it when it's low later. Opposite order.
During news events cycle you will want to buy right after the news is released if you anticipate it to have a favorable impact. You sell at it's highest.
During bank hours currency generally moves in one direction called trending
During the slow time, the value of currency stays in between the floor and ceiling with no significant gain or loss. During this time you can short and/or buy low sell high.
Good luck!
Sincerely,
The Ambitious 20 - Something |
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This is so knowledgeable! I would never have thought about it but a plan is totally essential if you're going to be investing. This post from the rich dad blog gives step by step detailed information about how to set up your trading plan. the rich dad blog always has the most useful advice! I'm sure I'm going to revisit this post often. So here it is!
Creating a Trading Plan
Even after learning the basics of the stock market, technical analysis, and options, many traders flounder due to a lack of discipline and focus. As we discussed this month in a related article, most individuals entering the world of trading lack structure and urgency. Without this structure, many novice (and unfortunately even experienced) traders bounce from trade to trade with no real plan. They have the desire to succeed, may even put in long hours learning and studying charts, but lack the structure to govern their day-to-day actions.
Many experienced traders develop a trading plan that helps govern their actions. This trading plan also serves as the bedrock for their decision making as it is serves as their guide to help ensure that they do not deviate from what they have learned and know works. Trading is a business and your trading plan is like your boss who makes sure you are doing your job.
While there is no sure thing in the world of trading, having a trading plan greatly increases your chance of success. Even the best traders in the world will have losing trades. But successful traders can stay on the path of success by knowing that things will turn around as long as they have and follow their plan. More importantly, the plan helps prevent emotional decisions and letting fear or greed dominate the decision making process.
It is very easy to get emotional when dealing with money. Losing money on a given trade can create a real emotional state of being. In the wrong state of mind, traders can make decisions that they would never make the other 364 days of the year. Unfortunately, one horrific decision can wipe out months of gains. As long as your plan is well constructed and followed religiously you may never encounter this situation.
Trading Plans Will Change with Experience and Time
Chances are you will not have the perfect trading plan when you begin. As long as you have a solid foundation built on correct principles, then your plan will change as you gain experience. One thing to be aware of is that you should not change your plan at a whims notice to help you justify the action you are about to take. Take time outside of trading hours to evaluate your plan on a weekly basis to see what you might improve or alter.
Also, make sure that you actually write down your plan. If you do not write down your plan, then you might as well not have one. It will be very easy to set aside your unwritten plan and then it won’t provide any real structure to your trading. Having a written plan will make it easier for you to follow and stick to your plan, and will help you achieve your trading decisions and goals. There will be periods in your trading when you may question your trading plan, but never deviate from it. Deviating from the plan could lead you down a path that could be detrimental to trading success.
Your Trading Plan guidelines:
- Put it in writing
- Take time on a daily or weekly basis to evaluate your plan, but never while you are trading
- Your plan should revolve around your goals
- Your plan should help structure your day-to-day activity
- Your plan should help determine entry and exit points
- Never deviate from your plan
Here are some items that you should consider when creating a trading plan:
Goals and General Guidelines
1) What are your annual, monthly, weekly, and daily trading goals?
2) Do you have any trading goals that do not involve money?
3) What situations in your personal life would cause you to halt trading?
4) What type of trader do you plan on becoming?
5) What part of your capital is dedicated towards long-term investing?
6) How much time a week do you plan on pursuing your trading education?
Trading Plan Items Regarding Risk Level
7) What is your overall attitude toward risk?
8) What is the maximum amount of capital that you will put at risk in any given trade?
9) What is the maximum amount of capital that you will put at risk at any given time?
Trading Rules Involving Technical Analysis
10) Which technical indicators will you use?
11) Will you ever trade against the trend?
12) How will you use moving averages?
13) Which setups will you use to enter trades?
14) Are there any situations where you will violate your technical analysis rules?
15) How will you find your trade setups?
Establish Your Entry Rules
16) Which signals will you use to enter your trade?
17) If there is more than one signal, which one will take priority?
18) Are there any conditions that would cause you to enter a trade that would violate one of your entry rules?
Establish Exit Rules
19) What are the technical signals that would cause you to completely exit a winning trade?
20) What are the technical signals that would cause you to exit part of your position of a winning trade?
21) Will you ever use “gut feeling” to exit a trade?
22) Will you use overall market sentiment to exit a trade?
23) Will you exit trades before earnings or hold through earnings?
24) Will you exit trades based on news?
25) Will you use a stop loss order with every trade you make?
26) In what scenarios would you not use a stop loss?
27) Will you use trailing stops as trades start to go in the anticipated direction?
28) Will you exit a losing position before your stop loss is set?
29) What scenarios would cause you to exit a losing trade?
Record Your Trades
30) Do you plan on recording your trades each day?
31) What time of day do you plan to record the trades?
32) What will you do if you find that you deviated from your trading plan?
Developing Your Daily Routine
33) What is your pre-market routine?
34) What is your post-market routine?
35) Will you trade if you have not reviewed the prior days’ trades?
36) If watching the market during the day, what will your routine be?
37) How will you manage your watch list?
38) How much time will you spend a day on research?
These are just a few items that you should consider when developing your own trading plan. By systematically approaching your trading, you increase the probability of becoming a successful trader. In next month’s newsletter, each of these areas of the trading plan will be discussed in more detail with examples that some experienced traders use in each area.
Thank you once again Rich Dad & Robert Kiyosaki! You are a lighthouse in a world clouded by control, confusion, and fear!
Sincerely,
The Ambitious 20 -Something |
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I found a really interesting blog about how to use ebay for backlinks. I've never heard of it before, so I'm posting it here. I had no idea that ebay actually let you set up a blog too!
by: Peter Lee from the Work From Home Business blog
Your eBay About Me page.
Start to build your own About Me page using HTML complete with clickable links but only after you’ve read eBay’s About Me Guidelines so that you do not violate any eBay terms and conditions. There are certain links you can not have but you may be surprised at just how relaxed eBay is with their terms.
Your Ebay Blog:
You may already know that eBay allows you to create your own blog. But not many realize there is a better way of using your eBay blog to help you in your link building. Essentially what you should do and how you can get the best out of your eBay blog:
• do not start an eBay blog like a normal blog. For God’s sake, don’t start posting hundreds of pages like it’s your WordPress blog. Keep your blog posts to a bare minimum perhaps 2 to 3 posts.
• Use one of your pages to build a List of Resources in which you link out to your Resource Partners. It helps to diversify your link exchange program.
• Obtain quality inbound links to your eBay blog as you would similarly do for your other websites.
• Do not be afraid of linking out to others but especially so to bloggers who are already your link partners. It’s called linking to a link. The rationale is this. When you link to them, you build their authority and in turn you’ve boosted your own page authority and backlink.
by: Peter Lee from the Work From Home Business blog
Thanks Peter Lee!
Sincerely,
The Ambitious 20-something |
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Buy a 'fixer upper' house at a great price.
Convince the seller to take the note himself without using a bank.
get construction people & architects to give you blueprints for improvements & a quote for the work.
Take blueprints to an appraiser. Get an appraisal of the value of the home after you make renovations according to the blueprints.
Get a loan from the bank for seller finance loan+improvements. They'll pay your monthly mortgage bill while you do the improvements.
Sincerely,
The Ambitious 20-Something |
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This is a reboot of Dale Carnegie's "How To Win Friends & Influence People". For the most part, the majority of the book doesn't have anything to do with modernity or 'the digital age'. It seems like a useless reboot for profits, but here's the key points anyways.
Here are the main lessons given:
don't complain
connect to core desires
smile
show admiration
remember people's names
listen
never argue or tell people they are wrong
apologize quickly & emphatically
Don't hog credit
be empathetic
appeal to people's morals & value's
Share your story
throw down a challenge
Point out the stakes
start with the positive
Sincerely,
The Ambitious 20-something |
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As I learn more about investing in general I'm realizing that some aspects of the US economy are OVER-regulated. Some of the laws designed to protect the average US citizen from 'risky investments' are doing more harm than good by preventing them from accessing some investments with higher rates or returns than what most Americans can currently get. Whether these 'protective' laws are designed with the intent of keeping the poor poor, we can only conjecture. As I am currently taking an intro to finance course on coursera right now, this underscores the correlation between risk and return. I am copying a post from another blog. escapeartist.com provides information about becoming an expatriate, international investing, and international taxes. I am posting this because it's very similar to another blog post of mine. Several months ago I posted a review of a software program called 100% winners, which is a sports 'investing'/arbitrage software. Arbitrage is simply taking advantage of differences in values/percentage between different entities like banks or bookies. Arbitrage is good because, if done right, the math garauntees a profit. This post tells how to do it using differences in currency instead of sports odds. I had barely ever heard of it before, which I'm pretty sure is more than most Americans. I get the impression that most Americans have never heard of this or know it exists. This is written by Gary Scott, not me.
There’s a powerful investment strategy I call the “multi-currency sandwich” that not only dramatically increases profit potential but can also add safety to your portfolio. This tactic is almost unknown in the United States, but is time tested and very popular in other countries.
I first learned and cashed in on this strategy in the early 1980s when the United States was being ravaged by inflation. The U.S. dollar had dropped strongly versus the Swiss franc. It was possible to earn 18% on U.S. dollar CDs. When my Swiss banker told me that I could use U.S. dollar CDs as collateral to borrow Swiss francs at 3% and reinvest at 18%, I was hooked!
At that time, for each US$50,000 CD I held, I could borrow the Swiss franc equivalent of US$200,000 at 3%. I could then convert these francs back to dollars and put them on deposit at 18%. My portfolio looked like the chart below.
Assuming the Swiss franc-U.S. dollar exchange rate remained at parity, this strategy increased the return on my US$50,000 investment from 18% to 78%. Yet the investment became even better! The dollar then recovered about half the value it had lost against the Swiss franc, so when it came time to pay off the loan there was a huge foreign exchange profit as well. My total profit was well over 100%.
Since I first discovered this strategy, I’ve used it in many different currencies to make gains of 30% or more annually, with relatively low risks given the profit potential. And today, conditions in the currency markets make it attractive again—in particular, low interest rates for loans in the Japanese yen, versus much higher interest rates available in Eastern Europe.
For over a decade, I’ve used the yen as a funding currency for multi-currency sandwiches. I’ve been able to borrow yen at rates as low as 1.6% and reinvest the loan in investments that have yielded up to 25%, sometimes making over 100% per annum.
Because of Japan’s great economic weakness, there wasn’t a big risk of the yen strengthening, making repayment of the loan more expensive. Moreover, the Japanese needed a weak yen to make it more attractive for foreigners to buy its exports.
A variety of factors affect the value of the yen, and its value fluctuates. But for the long term, when the yen is above 110 to the U.S. dollar, I feel it’s too strong. Below 110, it’s too weak.
This simple evaluation has helped me earn extra income time and time again. My best recommendation was borrowing yen at 108 in 1994 (the yen was too strong) and unloading when it fell to 146 (it was too weak). (For an example of how I’ve used the yen as a funding currency for past multi-currency sandwich recommendations, see http://www.garyascott.com )
Today, the huge Japanese trade surplus with the United States would tend to make the yen rise, but the Japanese government has so much debt that credit rating firms have lowered its sovereign risk rating substantially. Plus, low Japanese interest rates simply aren’t that attractive to foreign investors. So, I’m not looking for a substantial strengthening of the yen against the dollar anytime soon.
Here is a current example of the opportunity available by borrowing yen at 1.75% and using that loan to purchase other assets. In this example, half of the proceeds of the loan are in Swiss francs. This currency has very different fundamentals than the yen, but because Switzerland, like Japan, has an export-driven economy, I don’t anticipate the franc rising much more in the short-term. Interest rates on Swiss franc loans are also very low. Plus, having a second lending currency provides downside protection if the other lending currency (the yen) unexpectedly increases in value.
We take our initial investment of US$30,000 and convert it into an Australian (AUD) dollar investment in a BMW Motors bond. We then use this investment as collateral to borrow US$600,000 in yen (JPY) and US$60,000 in Swiss francs (CHF). We use the proceeds to purchase US$30,000 of bonds in Hungarian forint (HUF); US$30,000 of Iceland treasury notes in Icelandic kroner (ISK); US$30,000 of bonds in New Zealand dollars (NZD) and US$30,000 of bonds in Polish Zloty (PLN). All of the bonds are rated AA or better. Please see the chart at left for details.
If we were to simply convert Japanese yen or Swiss francs into one of the higher-yielding currencies such as the Hungarian forint at 11%, we would generate a decent return of 7% or more a year. This isn’t bad, but with the multi-currency sandwich we increase this return by four times to nearly 30% annually.
This is an excellent return, but we must bear in mind the risks of the strategy. First, the yen and Swiss franc could rise versus the invested currencies, although I don’t think this is likely for the reasons that I’ve already explained. Second, if interest rates rise the capital value of the bonds could fall. This risk is fairly small because the bonds all mature in the next two or three years, plus the interest rates in the currencies that we’re investing in are already quite high. In addition, this risk is counter-balanced by the fact that the yen and Swiss franc could fall in value versus the invested currencies. This would increase the profitability of this portfolio. Finally, because we’ve diversified our portfolio across several different currencies, we really haven’t increased our risk that much. Indeed, in relation to the risk of investing in the high-yielding forint, we’ve actually lowered it.
However you should view the loss potential seriously and not invest more than you can afford to lose. Most international private banks can execute the multi-currency sandwich trades I’ve described, but it’s a specialty of Denmark’s Jyske Bank, one of The Sovereign Society’s recommended Convenient Account banks. The minimum investment for the sandwich is US$30,000 and the total fees for the transactions I’ve outlined would be about US$3,000 for the first year. For more information, please contact Thomas Fischer, Jyske’s Head of Client Services. Tel.: +(45) 33 787 812. Fax: +(45) 33 787 833. E-mail: fischer@jyskebank.dk.
If you’d like to learn more about multi-currency sandwiches and other profitable international investment techniques I’ve learned in the nearly 40 years I’ve been doing business internationally, be sure to read my free 15-lesson correspondence course International Currencies Made EZ, at http://www.garyascott.com/currez/ index. html.
And, for up-to-the-minute advice from the experts on the most profitable international investment and business opportunities, I invite you to join Jyske Bank’s Thomas Fischer and me for one of our “International Business Made EZ Courses.” The next two are scheduled for November 5-7, 2004 (http://www.garyascott.com/catalog/ibezjefferson.html) and February 4-6, 2005 (http://www. garyascott.com/catalog/ibezecuador.html).
Gary Scott has been an international economic writer and investment consultant for 35 years, with readers in nearly 100 countries.
Thanks Gary Scott for sharing this!
Good luck to both of us!
the Ambitious 20-Something |
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This is a repost from a rich dad education blog at: http://blog.richdadeducation.com/2012/08/30/wholesaling-real-estate-creating-wealth-out-of-thin-air/
I did not write this but it's so fabulous I had to post it!
One of the most appealing things about investing in real estate is that it can be done with very little capital. In other words, you do not have to have a $150,000 in your bank account to purchase a $150,000 house. This concept is called using leverage. Leverage simply means that you can control a lot (the whole house) with very little investment.
This article will focus on how you can leverage yourself into some great deals and make some money along the way. We will focus on an investing technique called wholesaling (also referred to as contract assignments).
How It Works
Wholesaling involves finding a great deal and then selling it to another party interested in the deal. You sign a contract with the seller agreeing to the terms of the purchase. Then, you find someone else that would like to have those terms with the seller and you sell them the contract. You are not selling the property; you are selling them your position in the contract.
The seller still gets every penny that was agreed upon in writing, the new buyer gets a great deal, and you make a fee for assigning your position in the deal to the new buyer. It is a true win-win-win situation.
What is the benefit to you as the person in the middle of this transaction? Think about it like this:
If you are the one in the middle, how much money did you have to invest to make this deal work? The answer: very little. The only money that you invested into this deal was the earnest money deposit that you paid with the purchase contract once the offer was accepted. Since this amount is negotiable, it could be as little as a couple hundred dollars or less if you are good at negotiating.
How much financing did you need to get? The answer: none! Since you are selling your position in the deal, you never needed financing to make this work. The new buyer pays cash or lines up their own financing to complete the purchase.
If the property needed repairs, did you have to do the repairs? No! The new buyer is taking on the contract as is and the property as is. Any repairs that are needed will be completed by the new buyer.
As you can see, there is a tremendous benefit to be able to do deals where you invest very little money, financing is not necessary, and you do not have to do repairs. If you are doing transactions that require very little money, your credit is not needed and you do not have to be a handyman to do it, you can see that you have really removed the major barriers that keep people from investing in real estate. You have harnessed the power of leverage all because of the simple technique that you are using.
Finding Investors
Although you could sell your contract to a buyer that wants to purchase their own home, you typically will sell it to another investor. The major reason for this is that they are always in the market for a great deal. If you negotiated a great deal, they will likely have an interest.
When most people are introduced to wholesaling, they typically comment that finding the investor to sell the contract to must be difficult. Actually, it is quite the opposite. If the contract that you negotiated with the seller is a great deal, then that represents an opportunity for the other investor to make money. That is what is going to keep them interested. You will find that the better deal you negotiate, the easier it will be to find another investor. If the deal is not that great, you will have a hard time finding investors.
If you are using this technique and you find that you are having a hard time finding investors that are interested in your contract, that tells you that you probably have not negotiated a good enough deal.
One of the easiest ways to find investors for your contracts is to use the “We Buy Houses” signs and ads that you see all over the place. If you are wholesaling, the investors that are advertising are not your competition. They are your buyers.
As you find these signs and ads, you should be taking down their names and phone numbers. Start building a list of potential buyers. You will have a lot more confidence going into a deal knowing that you already have potential buyers lined up.
When you find these investors, give them a call. Your whole objective during this call is to introduce yourself and find out what they are looking for in a deal. Every investor is different. Some of them have certain areas that they like to invest in. Some of them have specific types of properties that they look for. Some of them have to have a certain amount of profit or else they will not be interested in the deal. When you take the time to find out what they are looking for before you have a contract in place, wholesaling becomes so much easier. Build your list of buyers first and you will have a lot more confidence finding the right deals because you know what they are looking for.
When you call them, say something like, “Hi, my name is ______________ and I am an investor in the area as well. Sometimes, I run into more deals than I can personally finance and I wanted to know: If I had a deal that made sense, would it be okay if I brought it to you?” This tells them why you wouldn’t buy it yourself and it opens up the door to discuss things further. Chances are very high that they will say that they would be interested. Start to gather their information and what they look for in a deal. Now you are building a list of buyers for your wholesale deals.
This simple investing technique can help you leverage the power that real estate has to offer. This is a perfect example of why you do not need to have a lot of money or credit to invest. You simply have to know the right techniques and know how to use them. With this knowledge, you will be able to capitalize on the great deals that you see and make a profit.
Thanks again Rich Dad!
Sincerely,
The Ambitious 20-something
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Everyone has 3 different credit scores & it's important to know what's going on with each of them. Everyone is entitled to 1 free credit score (often called repor) from each of the three reporting agencies (Transunion, Eperian, & equifax) once per year by filling out a form at www.annualcreditreport.com. . So January fill out the form for Equifax, April get it for Transunion, August get it for Experian. Repeat the process next year & ever year for the rest of your life. Note that it doesn't matter the co you get the score from, the important part is that it's every 4 months. Look over your report with a fine toothed comb & be sure to dispute EVERYTHING that looks incorrect. In between those 4 months you can keep an eye on your credit by getting a free account to www.creditkharma.com. They give you a free credit score as often as you want without effecting it.
Your score is made up of:
Payment History: 35%
credit to Debt ratio: 30%
Age of Open Credit Lines: 15%
Frequency You apply for credit: 10%
type of Credit in use: 10%
You should be aiming for 760+ which is AA.
The fastest way to increase credit score is to increase your limit. You do this by calling & asking/negotiating with the credit card company.
Focus on the big 4 cc companies, the others probably aren't worth your time: Visa, MC, Discover, AmEX
Sincerely,
The Ambitious 20-Something |
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About me |
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It's always been a goal of mine to be a millionaire by thirty. The problem is that my time is ticking. Is it possible to make a million dollars in under four years? I don't know but we'll find out. |
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Sokule |
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