Consistency Amidst the Chaos
Over the past couple years, I've had the awesome opportunity to travel around the US and help teach the principles of entrepreneurship and finance. One of the most common themes I've found in talking with and helping people on their financial journey is the desire for consistency.
It's human nature, isn't it? We want to be at peace with our life and with our decisions. Or to have confidence in what tomorrow or next week or next month hold. I don't think this comes from an avoidance of risk, but rather, a desire to have more control over the outcome of our lives. We want choices. To be at peace financially doesn't mean we need to accrue millions in the bank or be rolling around in an Audi R8 (although they are awesome.) It means we have the choice on how we spend our time and whom we spend it with.
So many people I meet have lived through multiple economic cycles and have seen the best of both worlds. They've experienced the euphoria of the top of the bubble economies when $500/month car payments were a drop in the bucket and they've experienced what it's like in recessionary periods when they must take the bus to their new job that pays a fraction of the salary.
By the way, this isn't something that's a geographical phenomenon. It's consistent everywhere I go. It's consistent in Road Island. It's consistent in Michigan. It's consistent in California. It's consistent in Texas. You get the picture.
So what do we do about it? How do we ensure that we can start to correct the ship, take back control, and protect ourselves financially?
Well, I believe it's Real Estate. That's why I love teaching it. There's nothing wrong with other types of investing. I have a great friend who's teaching me how to trade options at the moment. It's a very powerful tool to get great returns on your capital and he does quite well with it. The problem is, you have to be glued to 3 computer screens and no one knows what type of Tweet our President will drop next.
Let me give you an example of how I took an IRA that was backed by a relatively high risk industry and turned it into something that will produce me consistent, double digit, cash on cash returns for as long as I want.
I had a Lord Abbot IRA that I chose to cash out right before the tech industry corrected. I was lucky on the timing but the reason I liquidated had nothing to do with charting or me monitoring the industry. It had to do with my belief system that my TROI is greater in Real Estate than in any other security.
I rolled this IRA, along with $12,000 I borrowed at 0% from a credit card to purchase and renovate a small 2-bedroom home over by Detroit, MI. My total, all in cost was $37,000. We had the house filled in 2 weeks and it is now renting, with great tenants, for $850/month. That means that I went from having my money in an account that was earning a vulnerable 15% return (that got cut by more than half after the market corrected and FB tanked), to getting an 18.5% cash on cash return, FULLY MANAGED. And my money is backed by real property. And I can borrow against that property and cash out tax-free and my tenants can pay it off. Oh, and did I mention its a massive tax write off in general? Boom! That's a win, folks, and that is how you hedge against the chaos.
Now, let me be VERY clear. I am not a financial advisor. I am also not giving financial advice or telling you to invest in real estate opposed to the stock market. You can do whatever you'd like. You could very well deploy this strategy and make more money than me. You could also make less. You could also lose all your money. There is risk associated in everything and investing is risky. But, we can help hedge against it.
There are multiple options for your money and you should investigate them all. If you're interested in learning more about how to get double-digit returns in Real Estate, though, hit me up. I'm happy to have a conversation.