Income for Life

Try not to kill the pigs

Posted by Rob Minton
Follow me on Twitter

By now, you've probably heard plenty about the swine flu. The news is everywhere. Maybe you hadn't heard of the swine flu before this outbreak, or maybe, if you're old enough, you remember 1976.

I was around in 1976, but too young to pay much attention to what was in the news. At that age, I was more concerned with riding my bike, making that transition from kindergarten to first grade, and managing my rental properties. Just kidding. I didn't start investing in properties THAT early.

Anyway, since I was too young to remember it, I have read quite a bit lately about the supposed swine flu pandemic of 1976. A soldier in New Jersey died as a result of it, and the flu had spread to other soldiers on his base. Fearing a situation like the 1918 pandemic that killed as many 50 million people all over the world, the U.S. government convinced drug manufacturers to rush out a vaccine as part of a campaign to vaccinate the entire U.S. population.

A hoky pair of public service announcements from the government's 1976 vaccination campaign can be seen here:

Well, the pandemic in 1976 never materialized. The predicition that millions of U.S. citizens would die was way off, as it appears the soldier whose death sparked the whole uproar was the only fatality confirmed to be a result of the swine flu.

Meanwhile, evidence suggests the vaccine itself caused health problems in many Americans, including a nervous-system disorder that can cause paralysis and death. The government abrubtly halted the program.

I'm no doctor, no scientist, so I am not telling you not to pay attention to your health. I am just pointing out that the government's reaction in 1976 might have been an OVERreaction. And now, 33 years later, swine flu is causing some overreaction again.

In Egypt yesterday, an order was given to kill every single pig in the country. This is despite the fact that A.) There are no confirmed cases of the disease in Egypt; and B.) the flu is transmitted human-to-human -- YOU CAN'T GET IT FROM PIGS.

 Unfortunately, human nature is prone to such overreactions. Take our current economic conditions, for example.

Recession hits and people stop spending money, hurting the economy more. People see their 401k plans dropping in value, and they yank all their money -- taking the losses -- and stick it in a savings account that earns 1% interest. Real estate drops in value and so they swear they are never going to buy a house again.

I am guilty of financial overreaction in my own past. After the dotcom stock market bust, I swore off investing in the securities markets ever again. It took me years to realize that this was a mistake, and it cost me a ton of money. I'm telling you this because I don't want it to happen to you.

You can't simply dump everything, cancel your wealth-building plans, simply because of one seemingly catastrophic event. You can't let your emotions take over reason. You can't let the recession make you give up.

You can't kill the pigs.

GPS system for investors

Posted by Buddy Blackman
Follow me on Twitter

This past Saturday, we were conducting one of our Foreclosure RoundUp Tours. Somehow, I ended up as the lead car (big mistake). I had my 9-year-old son with me and he was (as always) asking lots of questions. Long story short ... I missed several turns, trying to get to the next house. 

After we all finally previewed that home, one of the new Income for Life investors in our group said that he had a GPS system in his car and would lead us to the next house. After arriving at the next house, I realized I had no idea on what part of town I was in, and neither did the investor with the GPS.

The reason: He relinquished his decision-making and put total faith in the GPS. The investor had researched the system before he purchased it, and he learned about how it worked. Once purchased, though, the investor trusts in the GPS because he knows it works. He turned left when it told him to, turned right when it told him to ... and arrived at the desired destination.

Does the GPS ever make a mistake ?  Maybe. Sometimes it might tell you to turn the wrong way down a one-way street. It's possible that it could direct you onto a road that is closed for repair. But once you take a different route, the GPS automatically adjust and continues to assist you with your final destination. Because of one mistake (that is out of the GPS’s control) you don’t throw the GPS out the window and try to “wing it.”

Our “Income for Life” organization is like an “Investor GPS” system. The investor researches our reports, reviews the investments being made both locally and internationally with our members, understands that we have a proven system that is constantly being “tweaked” and updated to provide the best performance for our members, and then joins our membership to assist him with his goals.  The member who keeps his eyes on  the “GPS” system and acts quickly (Velocity of Money) will be the most successful.

Am I saying that an investor should turn his decision-making over completely to his “Income for Life” organization ? No, I am not saying that. But just as with the GPS, having a system to follow gives you guidance at every turn.

I know there are a lot of investors wandering out there in the jungles without a system to navigate their direction. I hope that somehow they find their way to Income for Life and request the free reports they can use to research our system.

It would be a great first step in finding their way!

Buddy Blackman
Income for Life, Charlotte
www.QuitWorkCharlotte.com

Build in redundancy as you rebuild

Posted by Rob Minton
Follow me on Twitter

I might have mentioned in previous posts that I have taken flying lessons. Learning to fly has helped me see investing a little bit differently. And today's economy is a reminder that this different perspective is especially helpful.

You see, in order to learn to fly, you must learn about airplanes. It is part of your “ground school” training. You need to learn about the engine, electrical equipment, aero-dynamics, etc.

I was amazed to learn how many “back-up plans” were built into airplanes. These back-up plans are referred to as “redundancy” in the flying world. Here is part of the definition of an aircraft engine from Wikipedia:

“Aircraft engines also tend to use the simplest parts and include two sets of anything needed for reliability, including ignition system (spark plugs and magnetos) and fuel pumps. Independence of function lessens the likelihood of a single malfunction causing an entire engine to fail.”

Airplanes were built, for the most part, to continue flying in spite of failure. For example, you could completely lose battery power mid-flight and still be able to fly the plane. Many airplanes are built with two engines. The second engine is added to allow the airplane to stay in the air if the first one malfunctions. Each major component of the plane has “independence of function.” This allows them to continue operating regardless of other systems in the plane.

This “built-in redundancy” is the main reason why flying is the safest mode of transportation.

Now, here is the million-dollar question for you:

If “built-in redundancy” is the main reason for safe flight, what would it do for your wealth-building? Especially considering what has happened in the past 18 months or so.

Planes were designed to continue flying in spite of systems failure. Your plan for wealth (financial plan) should be designed with “built-in redundancy,” too. Unfortunately, the majority of people do not have “redundancy” with their financial plan.

The majority of people do not have a failsafe to protect their financial futures. They rely on one income stream and/or one investment strategy. One is a very dangerous word in the flying world. One should also be a dangerous word in your financial plan. The majority of people are relying on their retirement plan at work for their financial future.  What  happens if this retirement plan malfunctions? Their financial plan crashes to the ground. They are doomed.

I hope this has not happened to you in this recession, as the securities markets have taken a beating and real estate values have dropped in many areas.It's a reminder that your financial plan should include several different investments, each with independence of function.

Some time ago, I mentioned in an Income for Life newsletter that I read a biography on Kirk Kerkorian, a self-made billionaire. The biography is titled, “Kerkorian, an American Success Story” and was written by Dial Torgerson. Used copies of this older book are for sale right now on Amazon.com for more than $300. I checked this book (treasure) out of my library for free. (Hint, hint…)

I learned that Kerkorian ALWAYS had several back-up plans when investing. In fact, it seems that his thought process for investing started with planning in advance for failure. He specifically noted plan B, C, D and E to compensate for plan A failing. He did this BEFORE making an investment into plan A. I don’t know this for sure, but I’m guessing that Kerkorian learned to plan for failure as a pilot. He learned to fly and flew some very dangerous missions as part of the Air Force. I’m guessing that he learned about redundancy in airplanes, too. I’m also guessing that he applied the redundancy lessons to his businesses and investments.

This redundancy by Kerkorian actually saved him from financial disaster. You’ll have to read the book to find out what happened!!!

What is your Plan B? What is your Plan C? What is your Plan D? What is your Plan E?

Don’t get me wrong…

Your retirement plan at work is super. However, it’s not enough. You need a failsafe. You need redundancy. You need other plans to protect your family. As you rebuild your finances while the economy turns back around, think about using redunancy to protect yourself.

I’m going to outline a financial plan with redundancy for you. This plan actually looks very similar to my financial plan. Notice that you won’t be relying on any one investment to provide for your future.
I, obviously, have many real estate investments. In addition, I also have a self-directed Roth IRA. The  majority of money in my self-directed Roth IRA is invested into mobile homes (last month’s audio CD) and/or loans to other individuals at high fixed rates of return. In addition, I have a Roth 401k retirement plan through my business. I’m contributing the maximum amount into this plan each and every month through automatic payroll deductions. For the most part, these funds are invested into the stock market. And then there is my business. As the business grows, so does the value. On top of all of this, I’m using excess funds to pay off debt.How much redundancy do I have in my financial plan?

• Real Estate (Residential & Commercial Properties)
• Self Directed Roth IRA (Notes)
• Roth 401k through business (Stock Market)
• Business with Equity
• Debt Reduction
• Bonds

What would happen to my financial plan if my stock market investments go south? Would I still be on track? Can you now see the importance of building redundancy into your financial plan?

Are foreclosure opportunities expanding for investors?

Posted by Rob Minton
Follow me on Twitter

There has obviously been a lot of attention in the media on homeowners facing foreclosure. The number of homes in foreclosure in the States is staggering, and the government has definitely tried to address what it sees as a huge issue.

With all the attention on homeowners, we might have been missing what has been happening with other property owners.

Today, General Growth Properties filed for bankruptcy protection. General Growth is the second-largest shopping mall operator in the United States, with more than 200 malls. The company has enough cash flow to cover operations and interest payments on its debt, but is trying to restructure some of that debt. The company says it has not been able to refinance loans because financial institutions have been unable or unwilling to issue large mortgages and loans.

That doesn't sound all that different from the situation Mr. and Mrs. Smith down the street might be facing, does it?

General Growth, which according to a Reuters article, defaulted on several mortgages and bonds before seeking bankruptcy protection. The inability to refinance seems to have caused the largest non-financial institution bankruptcy so far in this crisis.

Industry experts are predicting that two other large mall operators will seek to purchase some of GGP's assets out of bankruptcy. That's just another example of how healthy businesses are using the financial crisis as an opportunity to gain strength. You and I can't afford to buy a mall, but couldn't we look at this crisis as an opportunity to strengthen our own investments, too.

I've been recently showing one of my rental properties to prospective tenants, and the demand seemed unusually high to me. I remarked to one of these prospective tenants that I've had a ton of people looking, and she told me that renters of apartment buildings are looking for new places to live. That, she said, is because apartments are getting foreclosed on, too, which means tenants are either being evicted by banks or are choosing to move because the landlords in foreclosure aren't providing the services tenants rely on.

I found an interesting article on this subject here.

So far, there has been a big spotlight on foreclosures of single-family homes, and there's no doubt investors are taking advantage by acquiring properties at discounts. But it seems as though the foreclosure tentacles are spreading further out. It might be time for investors to start paying attention to commercial and multi-family properties that could start hitting the market at below-value prices, too.

How to Save Money and Live Significantly Below Your Means

Posted by Rob Minton
Follow me on Twitter

About a year ago, I wrote an article for the Income for Life members-only monthly newsletter about a post on the blog of Tim Ferris, author of "The 4-Hour Work Week" (His blog is here). Tim's post was about something called "The Compact."

The Compact was a group of people who made a pact not to purchase anything new for an entire year, except for necessities such as food, medicine and toiletries. They were forced to become resourceful, borrowing, buying second-hand, or going without things they wanted or needed. The group's commitment was environmentally inspired -- they figured not buying anything new for a year would be the ultimate recycling.

The group completed their year saying it wasn't as difficult as it sounded. Aside from the environmental impact, could you imagine the kind of money you could save by not buying anything new for a year? With unemployment rising, I wonder if people are making efforts like this to cut their spending. People talk about "budgets" and "cutting back," but could they really make this kind of effort?

Could YOU go for an entire year without buying anything brand new? If you could, imagine
how much money you would save? This means...

♦ No new books, magazines or newspapers

♦ No new TVs, DVD players or Tivo

♦ No new automobiles

♦ No new clothes or shoes

♦ No new electronic gadgets, games or cell
phones

♦ No new toys, exercise machines

♦ No new furniture

♦ No new appliances or kitchen utensils

This would be a very big challenge, wouldn’t it? It also might be kind of fun to do with your family.
You would learn resourcefulness very quickly. You would have to figure out a way to find things second
hand. The goal isn’t to stop buying things for your family, it’s to not buy anything brand new.
Used is perfectly fine. Instead of spending time at the mall, you would be shopping at flea markets, eBay and secondhand thrift stores. I can see the reality show on TV right now!

You would probably buy fewer items, which may simplify your life. You would have less clutter
and more peace. You would also save a significant amount of money. In most cases, you would probablysave 60 to 75 percent on all of your purchases. Throughout the period of a year, this savings would be astronomical.

If the average family spends $2,000 a month on material items, this expense would be reduced to $300 or $400 a month. The extra $1,600 or $1,700 a month could wipe out all of your credit card debt in a very short period of time. Or it could help create a nice emergency fund for your family. Or it could be a down payment on another income property.

One of the requirements to achieving financial independence is to live below your means. I realize that I’m a broken record on this, but it is critically important. It’s impossible to achieve financial freedom if you spend every penny you make. Most people believe that this means delaying gratification. However, this may not be entirely true. What it may mean is that you have to become resourceful. You
have to learn new ways of doing things. You have to be creative, instead of impulsive.

Could you do it?

One IFL Member's Reading List

Posted by Rob Minton
Follow me on Twitter

I enjoy hearing about people becoming better off financially through their membership in Income for Life, but I think I enjoy it even more when I hear how their membership has changed people beyond just the dollars in their pockets. I want to share with you a recent letter I received from a member in Cleveland, Ohio.

Hi Rob,

It has now been 2 years since I joined IFL. Prior to joining, I would
have never known where to begin if I wanted to invest in single-family
homes or mobile homes. Honestly and irresponsibly, I didn't really think
about my financial future and investing before joining. Your program has
totally changed the way that I think about money in general and how I
make financial decisions.

One other thing that IFL has instilled in me is the desire to
continually learn and improve my knowledge level. I try to listen and
read as much as I can to items related to real-estate, self-improvement
and wealth-building. The following should drive this point home
and put it into perspective ...

I am currently 38 years old. Do you want to know how many books
I read over the years since finishing school?
*ZERO* - - - In total contrast, I have listed below all of the books
that I have either read or listened in the past 2 years since joining
IFL (these are in addition to your monthly newsletters).

Books Read:

• Rich Dad, Poor Dad - Robert Kiyosaki
• Cashflow Quadrant - Robert Kiyosaki
• Tax and Legal Strategies for Real Estate Investors - Garret Sutton
• Increasing your Financial IQ - Robert Kiyosaki
• Equity Happens - Real Estate Guys
• Missed Fortune 101 - Douglas Andrew
• The ABC's of Real Estate Investing - Ken McElroy
• Rich Dads Prophecy - Robert Kiyosaki
• The Top 10 Distinctions Between Millionaires and the Middle Class - Keith Cameron Smith
• Section 8 Bible_ - Michael McLean
• Raising Confident Kids - Denis Waitley

Currently Reading:

• 7 Habits of Highly Effective People - Steven Covey
• The Psychology of Winning - Jim Rohn
• Getting to a Yes: Negotiating Agreement Without Giving In - Roger Fisher

Comparatively speaking, this list might not seem that long, but for me it
is a radical change!!!

Thank You!
Mark Butler

Thank YOU, Mark, for sharing that with me. As you probably know, books have changed my life. At one time, I wasn't that much of a reader, either. It's good to see that reading has become so important to you. Knowledge is the one thing that can never be taken from us. Investing the time into reading books is an investment in yourself that never loses!

Rob

Want to Win Some CASH? New IFL Challenge!

Posted by Rob Minton
Follow me on Twitter

I wrote about this in the April Income for Life Members-only Newsletter, and I want to bring it up again here: I have a fun challenge for you, and the good news is that you can win $500!

Below is a question that I want you to answer with as much detail as possible. The member with the best answer will win $500. The second-place winner will win $250. The third-place winner will win $150 and the fourth-place winner will win $100. Sound good?

Here is the question I want you to answer:

“If your life depended on making an extra $25,000 cash in the bank within the next 30 days, what would you do?”

This is a very interesting question to ask yourself. I would normally just suggest that you ask the question knowing that many of you wouldn’t actually take the time to do it. However, this time I figured I would pay you to do it.

What would you be able to do with an extra $25,000? Would you buy a foreclosed home for pennies on the dollar? Would you use the money as an emergency savings fund? Would you pay off a few credit cards or a car? Would you buy a mobile home investment?

Questions like these get you to see opportunities. These questions are extremely important to ask yourself, especially in challenging economic times.

Send your answers to me at:
Email: [email protected]
Fax: 440-918-0347
Mail: 31811 Vine Street, Willowick, OH 44095

To be eligible for one of the four prizes, you must submit your answers no later than May 15, 2009. We will feature your answers in an upcoming IFL newsletter!

A better, easier way to do things

Posted by Buddy Blackman
www.charlotteinvestorguide.com

I meet with (and interview) a lot of real estate investors. These are experienced investors, "experienced" meaning they have purchased at least one investment property. Their experience may be good or bad -- but they are experienced nonetheless.

I met with an investor a few months back who stated that he was more than happy if he could get $100-per-month positive cash flow from his rentals (he is doing straight rentals). 

A hundred dollars a month ???  I'm not sure that took into account whether that even covers all of his landlord problems, calls, management, etc. This investor was suprised to see that my investor clients, Income for Life Members, are consistently getting $3,000 to $7,000 in up-front down payments from tenant/buyers (option fee) and between $300 to $700 a month positive cash flow. What makes our approach different from his?

A few days ago I met with another experienced investor. She had purchased a four-unit house.  Obviously a straight rental situation. This four-plex, she admitted, was in the middle of a rough neighborhood, and she was managing it herself! She claimed she was having challenges.

You think? 

I met her because she attended a free seminar I did for non-member investors. She is an educated person, an attorney, so she understands the importance of education -- that is why she is signing up for every investor information package that she can. She came to our free seminar because FREE is better than the big fee she just paid to the well-known "guru" who did a seminar in our town while on his seminar tour of what seems to be the whole country.

Anyway, this local investor is doing what most of us have thought to do. We know that we should be investing in Real Estate. The real question is "how?" She is jumping on the "tri-investing" method.  Have you heard of this method ? 

The "Tri-Investing" method goes like this: "TRY" everything, and the method that you make the most money with "WINS." The good news about this approach is that you are going to get a good education in real estate investing. But we all know, educations cost money. She is going to pay for that education in the time, frustration and money that she is going to lose (not counting on the SAFETY issue with collecting rent or evicting the rough tenants that rough neighborhoods inevitably attract.

After sitting throuh our seminar, I don't think all the "light bulbs" came on for this woman. She didn't seem interested in our "Nice Homes in Nice Places" strategy. She didn't understand the large up-front down payments (vs. her one-month security deposit). She didn't seem to grasp why we can command the larger than market rent, or the built-in appreciation we enjoy.

Believe it or not, this investor decided to NOT join our investor organization. She stated that she was more interested in "low income housing and Section 8 tenants."

I bid her "farewell" and "good luck" (she will need lots of it). I did give her a big packet of investing reports and information, so maybe we'll hear back from her (I'm sure I will ... after she reads this post).

To Your Success,

Buddy Blackman

Not a member yet? Vist www.IFLapplication.com