“In 2004 we got coffee and you told me about Rich Dad / Poor Dad. In 2008 you advised me and I bought my 1st condo 70% of market value. In 2009, inspired by your success, I bought my first 2 family. I just sold it and it’s given me >1 year of financial freedom to follow my startup passion.

Thanks for the advice and inspiration over the past few years. I wouldn’t have done it without your influence.

Slava”

The message is short and to the point but extremely powerful as at demonstrates what it takes to be successful.

Advice
Everyone gives advice but you have to be selective about whose advice you choose to follow.  I personally seek advice from mentors who have whatever it is I am searching for and looking to achieve.  If I was looking to lose weight I would seek out someone who has lost weight and has the body that I want to have.   I would look for someone who has already gone through the process, they have gone through the ups and the downs, and they achieved the result I am looking to achieve.  Obviously then,  it would make sense that I would listen to their advice.  Similarly, Slava was looking to invest in real estate.  He saw and wanted something that I had achieved, so he asked  for advice.

Action
Equally important though, Slava not only asked for advice from the right source, he listened to the advice and took action.  Too often we search for advice but then do not take action on it.  You commonly hear successful people talk about the importance of having coaches and mentors.  In addition to having a coach or mentor,  successful people also take action on advice they receive.

Stay Focused & Committed
You’ll notice that Slava’s journey started in 2004 and his big victory came in 2012…..8 years later!  I know Slava has had additional successes during this time frame as well as breakdowns and obstacles that have shown up.  The key is staying focused and committed to the goals you set for yourself.  Especially in today’s society, we are often looking for the “next big thing” or “shiny object” to chase or pursue.  When we don’t get immediate results or we find out that it’s going to be harder than we thought to achieve our goal, we start to look for the quick fix or the next big thing that is going to give us everything we want right now.  The problem is that doesn’t exist.  There is no such thing as an overnight success.  What you end up doing when you chase the next big thing is actually creating more obstacles to achieve your original goal.   Chasing the next big thing takes you off track. Achieving your goals takes courage, commitment and dedication to stay the course.

Inspiration
Slava mentions his gratitude for inspiration.  Inspiration is so important to achieving your goals because guess what….it’s not easy!  If it was really that easy everyone would achieve their goals! Inspiration is what keeps you going when you feel like stopping.  When you reach the point where you think you can’t go any further, you are ready to throw in the towel, inspiration is what propels you back into action.  Inspiration allows you to think the impossible and it’s what has you be crazy enough to go out and make the impossible, possible.

To Your Success! 

It was quite a thrilling experience and I was scared out of mind.
(yes I’ve included some pictures below)

But here is how it went down:

I arrive at the Tiger Temple and as I walk
down to the tiger pit, I see about 8
tigers pacing anxiously.

Fortunately there are guides that coach you
on to handle these 450 lb tigers.

Tip # 1
Pray you don’t get bitten

(just kidding, ok seriously though here is what they said)

As my guide walks me to the first tiger he tells me to
Put my hand firmly on the tiger so that it knows that I’m there.

I double check with the guide since I am not crazy about the idea,
“You want me to pet the tiger firmly”? I ask anxiously.

My guide then raises his hand and slaps the tiger on it’s backside really hard.

To my pleasant surprise the tiger doesn’t budge and I follow suit,
slapping my hand on the  450 lb tiger and petting it firmly.
(phheww one tiger down a few more to go.)

I proceed to the 2nd & 3rd tiger and successfully pet them firmly and snap a few pictures with them.

As I sit down with the 4th tiger and place my hand firmly on it’s back
this tiger turns its head to look at me

“Holy %$&*” I think to myself, but nonetheless I don’t move
still keeping my hand firmly on it’s backside letting the tiger know I’m not
going anywhere and it eventually turns its head back around.
(he must have had an early lunch and decided to spare to me)

Now truth be told, the only reason I survived this experience was
due to the coaching that I received from my guide.

And the same can be said for investing in real estate.

Whether you are investing in real estate investing or
petting a 450 lb tiger, It’s a good idea not to leave
things to chance.

First off,  if my coach didn’t tell me to handle the tiger firmly, I promise you
my initial instinct was not to slap the tiger and let him know I am the boss.

Whether it be purchasing your first property or taking your investing career
to the next level, if you have someone guiding you that has been there
before it makes your life MUCH easier and significantly enhances your chance
of success.  It is also an easy way to avoid making many common mistakes by learning
from your coach.  In real estate, it could be not making that $10,000 mistake or in my case
it could be the difference between me writing this post with only one hand instead of two!

Secondly, when the tiger turned around to take a good look at me, my initial
reaction was “RUN!!!”.  But prior to getting started the guide said that
if the tiger moves or turns around that I should stand firm and do not move.
Thanks to his coaching I knew how to handle a situation I would typically
have no idea how to handle.

When it comes down to it, I’ve found that most people aren’t
successful in real estate because they stray from their plan of action.
They get started with great excitement and a solid plan and then
they hit some obstacles and run into some unexpected situations
that they don’t know how to deal with and eventually the obstacles
become insurmountable to them because they don’t know what
to do, so they give up.

Having a guide/coach to hold you accountable to stick to your plan,
helping you through the difficult times when you want to quit can
be the difference between you failing as a real estate investor and you
embarking on a real estate career that leads to your financial freedom.

Lets be honest, most investors, start the process scared and unsure
(just like me in the picture below).

Having a coach on your team to guide you through the process is what helps you accomplish your goals, whether your goal is investing in real estate or being able to take a picture with a smile on your face, while you pet a 450 lb. tiger.

Click the image to download the Anatomy of a Real Estate Deal Flow Chart

Debt is crippling the nation, citizens are angry
and they’re not afraid to show it.

Given America’s debt situation, which I wrote about a few days ago
there is a lot we can learn from Greece.

Yes of course we saw the Acropolis, the Parthenon, the Temple of Olympian God Zeus and some of the beautiful historic sites that go back as far as 449 BC.

But no one is really talking about that.

Instead everyone is talking about…

Debt

You can’t pick up a newspaper or turn on the television without hearing about it.

You cant walk down the street without hearing people talk about it.

You can’t walk through Sintagma Square without seeing protestors camped out 24/7.

There are many issues at play, but the crux of the problem is that Greece cannot pay its interest payments and its debt burden is expected to hit 172% of GDP next year (US’s debt is 59% of GDP).

In an effort to prevent a default, Greece just received it’s 2nd bailout loan in the amount of $220 billion, after already receiving a $221 billion dollar bailout loan last year.

Similar to the US, Greece’s problem is that their debt is bad debt, not good debt.

As a result, Greece’s parliament is making some big changes (austerity measures), and it is making the majority of the population hostile and angry.

1. Increasing Taxes
2. Decreasing wages by 15% to 30%
2. Social Security will be cut by $1.57 billion
3. Increasing retirement age from 61 to 65.

What would you do if this happened to you?

If your income got taxed an additional 10% how would this affect you?

If your salary got cut by 15% or 30% would you be able to survive?

Do you have a plan in place to provide for your family and allow yourself to comfortably retire if the same things happened in the U.S.?

If not, now is the time to start taking action.

Unfortunately for the Greeks it is too late to make changes, this is happening now.
If you hadn’t prepared ahead of time, it’s too late.

The writing is on the wall for America.

I’m not saying this is going to happen here, but it’s certainly a possibility.

What I am saying is this…

Learn from the Greeks.

Congress is already talking about raising taxes.

Look at what happened in Wisconsin earlier this year.

The good news is you still have time to take action and make investments that you control when you retire, where you control how much money you make and can pay the least amount in taxes…and that investment is income producing real estate.

But time is running out.

Consequently, the debate to increase the federal deficit has been the topic of conversation lately in an effort to prevent this from happening.

But the question I am wondering, and you may be to is, how could we let this happen?

The answer is quite simple… Education & Experience.

Financial Education
Understanding the difference between good debt and bad debt.

Good debt makes you money each month.

Bad debt costs you money every month.

Without understanding the difference between the two, most countries and people get further into bad debt that actually makes them poorer (like the US has done).

Experience
Sometimes knowing something doesn’t make a difference at all.

In fact you too may know the difference between bad debt and good debt and are still using bad debt.

In this case, the real issue is a lack of experience to be able to turn debt into good debt.

The reality is debt is debt.
It is neither good or bad.
What makes debt good or bad are the decisions that YOU make.

Let’s use real estate as an example.

Country A and the USA are able to get a bank loan for $1MM to purchase a piece of real estate.

Both Country A and the USA intend to turn this money into good debt by using the $1MM loan to make them more money.

Country A purchases a piece of real estate that generates positive cashflow every month and the net result of them using the $1MM is they made more money and increased their wealth.

The USA purchases a piece of real estate which is costing them money every month, so the result of them using the $1MM loan is they are losing money and they are becoming poorer.

Now both countries had the intent to use the debt to make money, but only Country A used it to make money and the USA did not.

This is where experience plays a crucial role. Having the experience to use debt properly and turn it into good debt is the key.

Here are some questions to ask yourself:

Can you adequately identify investments that will make you money with the debt you are using?

Do you know where and how to find investments where you can turn your debt into good debt?

And the final question, which is the only way to really know is….. are you doing it now?

Are you becoming wealthier each day by turning debt into good debt, investing in real estate that makes you cashflow?

If you have been talking about it forever, but are still not doing it, and you are ready to take the plunge now is the time.

If you have had mediocre success but are ready to take your game to another whole level now is the time.

If you are ready for financial freedom, make it happen now.

To Your Success

Doug

The truth is ever since I read Rich Dad Poor Dad
at the age of 20, I created my own financial plan
that I have followed.

That plan has served me very well thus far and
I started to wonder if it would continue to do so
given the exciting changes I have coming up.

In two months I will be marrying Alexes,
(one of the most amazing human beings I have
ever met and the love of my life) and we are
planning to have children in the next few years.

So, I thought it might be time to update my financial plan.

After meeting with numerous “financial experts”
what I discovered shocked me.

Rather than bore you with the details of the meetings
with the different financial planners lets cut right to the chase
and talk about one of the meetings in particular.

This financial planner asked me when I want to retire
and how much money I want coming in.

I told him I never plan to retire ( I love what I do) but
for the purpose of his exercise I said I want to retire in
the next 10 years and make $250,000 each year after taxes.

He ran his computation (not including existing assets) and told me that I would need to create a nest egg of over $1.6 Million dollars in the next ten years to achieve my goal.

With that nest egg I could then invest in the stock market, mutual funds, annuities and other financial products to achieve my annual retirement income goal.

Lets take a look at this plan in 4 parts.

1. Coming up with an extra $1.6 Million
2. Risk of Income
3. Risk of Investments
4. The Alternative

1. Coming up with an extra $1.6 Million
Most people if they had to save an extra $1.6 million dollars over the next 10 years would do what they know how to do…work harder.

That means I would need to save an extra $160,000 / year for the next ten years. This amount wouldn’t even include the money I need to live, to feed my family, to have some fun etc. But for the purposes of this example and to be ultra conservative, let’s say that I managed to live extremely frugally and lived off of $40,000 so my needed income would be an even $200,000 after taxes.

That means I would need to make $240,000 / year to net approximately $200,000 after taxes.

This is not realistic for most Americans given the median household income in the US is $46,326

But, even if you can make $240,000 / year busting your a$$ at a job, why would you?

As we’ve discussed, earned income is the highest taxed type of income AND you are putting in lots of time to achieve your goal. That time you lose, not spending with your family, not doing the things you love to do, you cannot get back.

2. Risk of Income
How are you generating this income? Even if you have gotten resigned to paying high taxes, how secure is your job? Is your job going to be safe with the economic changes we are undergoing and will your job be necessary in the new global economy? If it is, then you should do ok. But I would argue that very few jobs will really be safe with the changes that are coming. If you know your job is not going to be safe, now is the time to start looking at new ways to produce income.

Make sure to get a free copy of “The Freedom Report” if you haven’t yet to ensure your freedom in the new economy. If your job is safe then keep on producing income, because that is only the first step of the plan. The next step is then investing that money.

3. Risk of Investments
I find it mind boggling that the majority of Americans
work so hard for money and then they turn their money
over to the “so called” experts without doing much
diligence.

Most financial advisors want you to put your money into the stock market, mutual funds etc and hope to get a 10 or 15% return on your money.

This sounds crazy to me for a few reasons. First off, I think 10-15% return is extremely low. There are ways to get higher returns with less risk. Second, you have absolutely no influence over how your investment performs.

It doesn’t make any sense to me to work hard your entire life and then “trust” your retirement to strangers. Does that really sound like a safe and secure plan to you?

I know many people who lost at least 50% or more of the value of their retirement accounts after the mess of 2008.

How much influence did you have to actually affect the value and profitability of your retirement account when the financial storm hit? If the answer is not much, it may be time for you to change your investment strategy, especially because the worst is still yet to come.

And yet this is what is scariest to me. Lets say I had taken the financial advisors’ advice 10 years ago and had found a way to save $1.6 million dollars in my retirement account and then after the subprime mess of 2008 that account dropped to $800,000. What would I do then? I busted my a$$ for 10 years, did everything I was supposed to and because I had limited influence over my investments, when the financial storm hit I ended up only halfway towards retirement instead of being able to retire.

The unfortunate thing is that today lots of potential retirees find themselves in this exact position. Yet today when I sit with most financial advisors they give me the same advice that they have given in the past.

Do you think that potential retiree who can’t retire now would endorse the plan that the financial advisors gave me?

The problem now though is that potential retiree has been practicing how to make earned income for the past 40 years and that is the only thing he/she knows how to do. And since he is now $800,000 short to retire he has three choices.

1. Cut his lifestyle for the last years of his life
2. Continue to do what he has been doing the past 40 years, work for earned income
3. Learn an entire new skill set and take control of his investments and learn how to create passive income.

Unfortunately at this age, most people aren’t willing to even consider number three as an option so they resort to 1 or 2, neither of which is very appealing.

4. The Alternative
After meeting with financial planners and listening to their options I’ve come to the conclusion that the plan I first created after reading Rich Dad Poor Dad, when I was in my young 20′s is still the best plan for me and my “new, soon to be” family.

I realize this plan isn’t for everybody, but for me, it’s the only one I have confidence in because I am able to influence the results and am 100% responsible for how it goes.

It’s a simple plan, but it takes hard work. The exciting news is that the harder you work upfront, the less work you have to do on the back end and the more money you make.

Like Robert Kiyosaki says, acquire income producing assets.

Specifically I acquire assets that:

1. I control/influence
2. Are tax friendly – Allow me to make money and pay zero taxes or very little taxes (less than 10%)
3. Provide steady cashflow and capital gains appreciation
4. Allow me to use leverage ( I don’t use my own money)
5. Protect principal (allow me to recoup my initial investment in 12 months, if I use my own money)

The truth is at the end of the day, risk is always a part of any financial plan…nothing is guaranteed.

The question is which financial plan makes the most sense for you and will help you achieve our desired goals?

I believe I am able to reduce my risk by increasing the influence I have over my investments. In addition the more I educate myself, the more investing experience I get, I further reduce my risk. Not only do I further reduce my risk, but I also increase my financial returns.

This makes sense for me.

This also requires courage, especially at the beginning.

When I read Rich Dad Poor Dad at the age of 20, I learned a new way to create wealth and make money but it is one thing to know how to do something and to actually do it.

When I purchased my first piece of real estate 7 years ago at the age of 22, I got in the game. For the past 7 years I have continued to educate myself in the “virtual classroom” by attending seminars, reading books, etc as well as getting real world experience by actually doing what I’ve read.

Each year I develop skill sets that enable me to increase my income producing assets, make more money, pay less in taxes and have the time to do the things I enjoy most with the people I love.

Stay tuned because in my next post I will be sharing in detail how my real estate assets are able to achieve the results I mentioned above.

If you are interested in doing the same, leave a comment below and let me know why.