November 19th, 2008 — Investing, Long Term, Money, Personal Finance, Real Estate
Right now, if there was a market that had bad news written all over it, it would be real estate. The housing crisis has made investors jumpy, the economy appears to be tanking and home values are plummeting across the country. Would you believe that this is actually a good time to get into real estate? With the proper choices and management, this is absolutely true.
Down markets are a speculator’s dream come true and they can easily change your entire fortune. While we certainly don’t recommend sinking your life’s savings into a bunch of dead end properties this instant, this is a good time to think about investing in real estate the smart way. Never overextend yourself and always take the time to make smart investments that will pay off in the long term.
Let’s look at that statement a little more closely, especially the last two words – long term. Yes, right now, an investment in real estate is not going to do very well. In fact, it may even lose some value over the next few months. But, what goes down will go back up. Property values cannot stay low forever, and although they may not reach the insane heights they recently attained, it’s easy to make a good chunk of money with the right house.
Instead of looking at an investment in real estate in the tangible form, let’s compare it to an investment in a stock. You purchase a stock at $4 today and while it’s been steadily going up over the past few years, it’s still a pretty cheap buy. However, in eight months, the company takes off and the value of your stock increases exponentially. This would be considered a good investment. How is investing in real estate right now any different?
In fact, in some ways, you can do quite well with an investment in real estate right now. Consider the fact that foreclosures are at an all time high. What does this mean? Thousands of families need a place to live and they’re not going to be able to get a new home loan right away. This means that thousands of new renters have flooded the market and they have to find a house to rent.
Investing in real estate is always risky, but sometimes, the best returns come from taking a chance in a down market. You can easily pick up a property for pennies on the dollar, earn money from renting it out right now until the market changes and then sell it for a profit in a few years.
Remember – if you are going to jump into the real estate market, never purchase a property without first getting an inspection. Some homes that have been foreclosed on will be wrecked by the old owner or may have fallen into disrepair. Never accept anything on face value and insist on seeing the property in person. Pick properties that are solid, located in good neighborhoods and likely to go up back in value once this crisis passes.
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July 25th, 2008 — Book Review, Personal Finance, Wealth
Everyone loves a true rags to riches tale, and although we’ve had some with the dot com boom, there were few that echoed the stories of immigrants that moved to the big city with a pocket full of pennies and a dream. We were thrilled to read this book and discover that the American dream is still alive and well, and this modern day rags to riches story was not only heartwarming, but packed full of advice that everyone can take to heart.
The author was twenty two when he decided to live his dream of making a million dollars by the age of 30. This Georgia native packed up what little he had and headed off to New York City to make his fortune. His family was not exactly supportive of his wild ideas, but within a space of six years, they were amazed to find that Corey managed to get the job done.
What we liked best about this story was that Corey didn’t find his wealth by getting lucky, nor did he make tons of money in the tech world. He did it the old fashioned way, and worked the same 9-5 job for that entire six year period. He simply managed his money, found good investments and watched as the balance in the bank grew to seven figures.
You really get the feeling after reading this book that anyone, given the right mindset and drive, can become a millionaire. There are few books that are this inspirational and helpful on the market, and there is a lot that can be learned from this story. The author did a great job of telling his tale, and it feels more like a memoir than a dull tome about personal finance.
However, even though this reads like a heartwarming novel, there is an incredible amount of advice contained in these pages that the reader can put to immediate use. While not all of it may be attainable, such as buying and wearing only one pair of shoes a year, there are some tips that everyone can use.
One of the biggest failings keeping Americans from realizing their dreams of wealth is overspending. You’ll sure be able to look at your budget in a whole new way after reading through Corey’s Cheapskate Strategies. While these can be modified to reduce their overall severity, chances are if you do follow them, you’ll be able to put quite a bit of money aside.
Overall, there are few books that have this much merit in the personal finance genre and we highly recommend this book. While you may not be able to follow all of Corey’s advice, even a small portion of it will help you get on the road to realizing financial security. A big part of Corey’s success is due to the fact that he was willing to sacrifice quite a lot before he was thirty, but now, he’s pretty much set for life. That’s a pretty small trade off in the grand scheme of life.
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June 20th, 2008 — Book Review
There has been a lot of hype surrounding Douglas Andrew’s book, Missed Fortune 101. Many people gushed that it unlocked the secrets to becoming a millionaire, so I went into the book with high hopes. I was pretty disappointed to discover that much of the advice is already well known and let’s face it, a bit on the mundane side. We all know it’s important to have a 401K, but few of us have the potential to turn that into a million dollars.
While the book does serve as a useful guide for those that are just starting out, it kind of defeats the purpose and the target audience. The title itself leads readers to believe it’s written for those of us that are past the starting years and facing the ugly truths of retirement planning. Unless you have absolutely no concept of financial planning, I’m afraid this book will be a bit of a disappointment.
It is well written and the author does have a lot of enthusiasm, which is helpful considering some of the mundane advice that is doled out. Quite honestly, I felt that the author focused far too much on taxation and although I acknowledge that understanding tax law and avoiding overtaxation is important, it’s certainly not going to turn you into a millionaire. You may save a few thousand here or there, but it’s not the silver bullet that the hype built up. That said, there are a few good tips on how to avoid having your savings funds taxed into oblivion, but again, it seems as though the author was missing the point.
My main issue with the book is that it encourages readers to leverage the money from their homes into “special funds.” Finally, it’s revealed that these “special funds” are nothing more than investment grade life insurance policies. Personally, I believe it’s a bad idea to encourage people to endanger their homes with this type of investment, and quite honestly, the returns are not that good to warrant that kind of commitment.
The author encourages readers to build up as much mortgage debt as possible – which may have sounded good at the time, but as the latest news has proven, was really bad advice. Although he did discuss leveraging that into the investments mentioned above, it’s just not a sound enough premise to warrant anyone rushing out to adopt it. In fact, I worry that readers who took this advice to heart may be facing foreclosure right now.
Overall, while the book was well written, it fell horribly, horribly short of its promise. Perhaps if it had a different title, I would have come away with more praise. As it is, the hype is nothing more than that – empty hype that will get you no closer to realizing your dreams of financial independence. In that vein, it’s really not worth your time and there are far better books that cover the basics of dealing with taxes and finding ways to invest your money.
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