Thread: All I'm asking is 6%. Not 15%, not 12%. Just give me 6%

Originally Posted by JackEdwards

I believe what he is talking about is factoring.. So yes it is secured by the invoice the company has.. For example: Say The company does a paint job at an office building that pays in 30 days, but they need to make payroll today. You loan them the money for the invoice minus your fee (10% a month+-) and you collect the invoice.

You might need a regulated loan license in your state.

Also a good idea is to finance a note lot.. Lot of money to be made financing cars at 28% a year.

Exactly, you can buy selected invoices from suppliers of solid companies such as a Target. They'll pay. The risk is if you take on invoices from companies who are selling other smaller companies(risk of customer not paying invoice/going out of business). You can buy invoices from smaller companies because they aren't the credit risk, their customers are. Yes, check with your state on any regulation. There is tons of this going on since the banking system is locked up. Companies are paying higher and higher rates for operating capital and more and more will be factoring which is already the mode of biz in Europe and Latin America and this will be a larger and larger component to US biz finance. Long gone are the days of low interest lines of credit from your local bank.

You advance the supplier less than what your cut will be when you buy the invoice, when the customer pays you the full amount of the invoice to your lock box, you advance the balance less your cut to the supplier. I deal with some that are family so don't have a lock box with them, but you must control the invoice payment with a lockbox with any other company.

If you don't want to deal with details, call a few factoring companies and ask if they have investor programs. They might offer 1% a month for additional capital for hands off investors.

Learn to use a stock/mutual fund screener. You'll be able to pick out what rate (yield) you're looking for and then determine what risk level you're ok with based on the type of stock/mutual fund and any other criteria that is important to you.

This is not that difficult.

Originally Posted by davidil

OK, I'll tell you what's my problem.

I honestly believe I'm cursed. It's not me, it's my whole family.

If you want to make tons of money all you need to do is short what my father does. You will make 5% a month, guaranteed.

About a year ago I found a paper at my bank (UBS) which made 1% a month for about two years straight. I told my banker - "now look - I'm going in, you will see how this paper will start losing money". I went in with $30k, went out 6 months later it was worth $24k. Up until the very day I bought into it, it only made money. As soon as I bought it, it started losing.


If I'll put my hard earned money into ANYTHING which is not capital protected, I WILL LOSE. I honestly believe that.

I remember driving on Sunset in Los Angeles, there is big Apple billboard there for years already. I saw the ad for iPod and told myself "I should have bought Apple shares when I had a chance... idiot.... now it's too late!"

That was 2005....

dot dot dot
dot dot
dot

That sounds like a basis for a fund!

the Anti Investing Fund.
we will pile money up, and give it to fund managers,
when I make a investment, they make a counter investment.... short what I buy.
I'm telling you. that would make a good fund!

Maybe someone can recommend an investment house / bank with good reputation and track record?

Any investment seminars worth taking or are the books good enough?

Originally Posted by davidil

I don't know what FAX is and can't google it because it gives too many Fax related results....

You have to look for it using the right contextual keywords. Search for "australian bonds via FAX" and you'll find pages that talk about the "Aberdeen Asia-Pacific Income Fund" or AMEX:FAX or NYSE:FAX .

Cheers.

Originally Posted by davidil

Hi,

First post. Read the book, loved it. It could have been me who wrote it, it was like reading a biography, down to wanting to free myself from work so I could write screenplays (wrote two already) Made my first mil at 28, I'm now 32. Did not sell my business yet.

My situation is this. All my money is in CASH.

In the book MJ DeMarco talks about making 6%-8% out of "safe and liquid" papers, municipal bonds etc.

What is he talking about?

I look at the offerings on TDAmeritrade website, I see much lower numbers and on top of that, states like CA and others may bankrupt at any moment. Are these papers really safe?

I'm desperately looking for that "safe 6% a year" investment but I just can't find it! Where is all YOUR money? I'm not asking for 15%. Not even 8%. Just give me 6%.... (net of fees) really. But WHERE?

Is this something you would buy:

Order Period* 09/06-09/12
Coupon* 5.00%-8.50%
Issuer Goldman Sachs Callable Step-Up Notes (Negative Outlook)
Moody's/S&P Rating* A1/A
Maturity* 15 Years
Callable Yes
Minimum Investment* $5,000.00
Payment Frequency* Semi-Annual


Please help !

Thank you!

Before I recommend anything let me state up front that every investment has risk. Bonds have typically been considered safe because the US has never defaulted. If you have been following the news as of late you understand that bonds are not safe at all.

My first question would be are you looking for capital gains or cash flow? If you are investing for capital gains you will have a different approach. What I am offering is merely suggestions and you should of course do your own research and make up your own mind.

One final note before I get into the suggestions, congratulations on your success!!!

If you are looking for capital gains silver is a very unique opportunity that will probably turn out to be the greatest investment of this decade. The silver market is being manipulated by the banksters. Spot price is completely out of whack with the actual demand. This has been achieved by large banks like JP Morgan and HSBC naked shorting silver in the COMEX. There are plenty of shills trying to say that silver was in a bubble. This is simply not true. Here is the truth. Silver is the second most used commodity behind oil. It has over 10,000 industrial uses. The fiat currencies around the world are failing, including the US Dollar. Countries are recognizing this and making preperations to return to a gold and silver standard. China and India are hoarding massive amounts of gold and silver. I expect silver to outperform gold because people do not realize it has become more rare than gold. This is because we can not recover the silver that we use for industrial purposes. It is used in such minute amounts that recovering would be too expensive, thus when we break a mirror we throw it away, when we are done with our cell phones, ipods, keyboards, and a whole host of electronic devices we throw them away. As a result 90% of all mined silver has been discarded and no longer recoverable. There will be a rush for silver in the very near future. The whole world will soon realize how rare silver has become. Those who hold it before the rush stand to make a fortune. According to my research silver should be valued at $400 to $500 an ounce. Current spot price is less than $40.

I don't recommend using leverage such as stock options or commodities futures to take advantage of this unless you are an expert. I got burned badly because I did just that. This is how I learned about the manipulation aspect of the silver market. It was a hard lesson. There is tons of info available on youtube that explains all of this much better than I ever could.

As good as this opportunity is, it is a sit and wait deal. If you are looking to develop some passive income than this is not a good investment.

If you are looking into creating some cash flow at 6% or better there is a multitude of options available. Have you looked into stock options at all? By selling covered calls you can make on average about 3% a month. The downside is if the stock takes a hit, it can swallow that gain and then some quickly. The upside is that your exposure can be limited to just one month. If you are only looking for 6% this means you can reduce your risk of exposure to the market to only two months out of the year. There are other more advanced strategies such as straddles, collars, etc. The point is that most people know nothing about options. This tool allows you to make consistent gains at far less risk than typical stocks and mutual funds. The risk is less because you are making your profit up front, not waiting for the stock to go up in value. I would be happy to go in deeper detail with you, or you can pick up the book "The Wall Street Money Machine" by Wade B Cook. It was written in the mid 90s in the great tech bubble so the claims of potential are outdated. They were true for the times, but we live in a different economic environment. The principals still work but the dynamics of the markets have shifted dramatically since that book was written.

Real Estate offers a great opportunity right now. It is in the toilet and everybody is afraid of depreciating home values. Nobody is buying despite the firesale prices. This is an incredible opportunity for an investor. I can find buildings that cash flow all day long. There has never been an opportunity quite like this in our lifetimes. In fact i think this opportunity surpasses the Great Depression. I found a 3 unit building for $20,000. It needed about $30,000 of work to get it rentable. That is not just good, that's a steal. $1,800 a month in rental income and the expenses didn't even come to $500. That is sick. As you look at the bigger units it becomes even easier to find opportunities like this.

We are living in one of the greatest times for investors in the history of mankind. While everybody is terrified of the future remove your blinders to see the opportunities that are right in front of you.

Let me reiterate that these are all merely suggestions. You asked for some possibilities and I have shown you some. There is risk with any of these suggestions, so educate yourself and find what suits you best.

Hope this helps.

Great post, A-meister. I'm not sure if silver is going quite as high as you say, but if the dollar keeps tanking (a pretty safe bet) then silver is bound to go higher.

Your covered call suggestion is a good one. Buy a stock you would like to own anyway -- maybe SLV if you want to play silver -- and sell a call at a slightly higher price. If the stock goes up to that price, the buyer of the call can "call" your stock and buy it at the strike price. So if the stock goes down, you got the call premium, and you wanted to own the stock anyway. If the stock stays flat, you still have the call premium. For both of those you'd just sell another call when the first one expires. If the stock goes up, your upside is limited, but you get the premium AND the gain between your buy price and the option strike price, and you get it in a pretty short time. So that can be a good income generator.

Selling naked puts is another. This is totally safe if you just keep money in your account to cover the put. Choose a stock you'd like to own, then sell a put at a slightly lower price. If the stock stays flat or goes up, you keep the premium. If it goes down to your strike price, you keep the premium and you buy the stock at a lower price. The danger is if the stock goes down a LOT -- but if you chose a good stock you want to own anyway, that's not a major risk.

I still recommend some of the REIT-oriented stocks like NLY, CIM, and HTS. They borrow money at low rates, and purchase govt-guaranteed mortgages. They're all well-run companies, paying around 15%! Buy some of those and maybe sell some calls on them, and you can create great income.

For example: NLY just jumped 1.28% yesterday, to $18.16. You could sell an Oct 18 put for $0.71. That says you get $71 for every option, which says you'll buy 100 shares at $18. Now if NLY drops below $18 your put will ge exercised, and you'll have to buy NLY at $18. But you really bought it at $17.29 because of the $0.71 you got for your put! So you bought it cheaper. Now you're holding NLY and collecting its dividend, which is currently paying 14.32%. (It'll be a higher percentage for you, given your lower purchase price.) Now you can start selling calls on it. At the current $18.16 price you can sell an Oct 19 call for $1.52. (Wow, that's a great premium!) So if the stock stays flat, you'll make $1.52 income in the next month, plus about 1.2% in dividend income. If it goes up and your put gets exercised, you make $19.00 / $17.29 = 9.9% -- in a month! If the stock goes down... buy more and do it again!!

Damn, I should be doing this myself... :lol: That example looks a lot more attractive than most of the examples I've looked at. But you get the idea.

Oh, crud. I knew that looked too good. Unfortunately I have an issue that prevents me from editing my post so I'll just have to correct it here.

I read the option tables wrong. Selling the $18 put will get you $0.71, like I said. But selling the $19 call is only worth $0.04 -- useless. You could sell a $18 call, after you buy it at $18 from your naked put. To get any significant return out of selling the calls, it looks like you have to sell them "in the money." E.g. right now NLY is at $18.16. You can sell an 18 call for $0.31. You've effectively guaranteed yourself a selling price of $18.31. So if it gets exercised, you make $18.31 / $17.29 = 5.9% in a month. Still pretty good!

You'll likely get exercised pretty often if you sell in-the-money calls like that, so you'll have to plan to churn in & out of the stock fairly often. But if that gets you the return you want...

Very good reply.

Originally Posted by arpeggiomeister

Real Estate offers a great opportunity right now. It is in the toilet and everybody is afraid of depreciating home values. Nobody is buying despite the firesale prices. This is an incredible opportunity for an investor. I can find buildings that cash flow all day long. There has never been an opportunity quite like this in our lifetimes. In fact i think this opportunity surpasses the Great Depression. I found a 3 unit building for $20,000. It needed about $30,000 of work to get it rentable. That is not just good, that's a steal. $1,800 a month in rental income and the expenses didn't even come to $500. That is sick. As you look at the bigger units it becomes even easier to find opportunities like this.

Questions for you:

1. Where are you finding these deals (city, county)

2. Are you managing the properties yourself, or have a professional company taking care of them?

Great stuff. I'm going to dedicate the next two weeks to read books about investments. Can you please recommend some ??? That would be a great help. Just the top 1-2 books that you think is a MUST when it comes to learning how to invest your hard earned money...

THANK YOU!

I like the naked put suggestion, and in the case of this poster it would be well with in reach. I believe you must be an accredited investor to play that game and I am not. I have learned a lot about money, from real estate to the stock market, etc. but I am am still working my way up.

I know that Scottrade will not even allow you to sell puts at all. That is the broker I currently use.

What I like about your suggestion is that it has less than 33 % of losing money. Those are good odds to start with right out of the gates. If you like the company enough, and do your research, you can reduce the odds even more. Sounds like an excellent source of cash flow.

I am expecting a major crisis in the US dollar in the near future which scares me away from the market in general. If I was smart enough to narraow the timing down to within 6 months than I would load up on put options. Unfortunately, I have learned that I know just enough to be dangerous. When silver started it's ride up to $50 a share I bought call options. I thought the big move was here. When it hit $48 I repositioned my holdings so that I was controlling over $500,000 of SLV. Than it tanked. It was then that I learned about the manipulation of the silver and gold markets by the banksters. They have naked shorted more silver in a single month than the entire amount of physical silver projected to be mined this year!!! This is totally artificial, and when it finally comes unhinged the move is going to be huge. The fundamentals support my theory, and the buying pressure is off the charts. It is the naked shorts that is holding it down, and they can not keep that game up forever... ...I digress

My main point to this response is that if you are set up so your broker will allow naked puts that would be an superb source of cash flow. This option is not available to those of us with lesser means though.

Originally Posted by arpeggiomeister

I like the naked put suggestion, and in the case of this poster it would be well with in reach. I believe you must be an accredited investor to play that game and I am not. I have learned a lot about money, from real estate to the stock market, etc. but I am am still working my way up.

I know that Scottrade will not even allow you to sell puts at all. That is the broker I currently use.

What I like about your suggestion is that it has less than 33 % of losing money. Those are good odds to start with right out of the gates. If you like the company enough, and do your research, you can reduce the odds even more. Sounds like an excellent source of cash flow.

I am expecting a major crisis in the US dollar in the near future which scares me away from the market in general. If I was smart enough to narraow the timing down to within 6 months than I would load up on put options. Unfortunately, I have learned that I know just enough to be dangerous. When silver started it's ride up to $50 a share I bought call options. I thought the big move was here. When it hit $48 I repositioned my holdings so that I was controlling over $500,000 of SLV. Than it tanked. It was then that I learned about the manipulation of the silver and gold markets by the banksters. They have naked shorted more silver in a single month than the entire amount of physical silver projected to be mined this year!!! This is totally artificial, and when it finally comes unhinged the move is going to be huge. The fundamentals support my theory, and the buying pressure is off the charts. It is the naked shorts that is holding it down, and they can not keep that game up forever... ...I digress

My main point to this response is that if you are set up so your broker will allow naked puts that would be an superb source of cash flow. This option is not available to those of us with lesser means though.

Excuse the typo. I meant to write less then 33% chance of failure.

Originally Posted by arpeggiomeister

Excuse the typo. I meant to write less then 33% chance of failure.

Okay, apparently it was not a typo, there is some glitch that will not allow me to type percentages. Correction 2
It should say 33 percent, not 33&#37. Not sure what is up with that.

Originally Posted by andviv

Very good reply.



Questions for you:

1. Where are you finding these deals (city, county)

2. Are you managing the properties yourself, or have a professional company taking care of them?

Andviv
I buy in multiple markets

the midwest has had some of the snot beat out of it even pre crash, so there are some great deals there
East coast has some of the rust belts coming back, and you can get some great deals there.

west coast is still crazy California prices so its alot harder to find good deals there. but they do exsist.

Arizona took a beating, but rents still wont match up to the example above.
the thing is pretty much all markets have pockets like that. great for deals, getting into the deal flow is part of the issue. but once in, its good.
picked up 8 units for 125K with a 600 mo rent for each. how? it was never listed, it was a divorce thing, and the guy wanted out fast and the wife wanted a few bucks and be gone.

how did i find it? deal flow. I tell everyone what I do, and that I pay referral fees for good deals. I see about 10 deals a month, with only word of mouth advertisement. and its really low key, but I get good deals.

if you want drop me a PM and I will send some deals your way.

I live in ME and my search spans the entire state. The building I was specifically referring to was in Waterville. I do not believe this phenomenon to be restricted to Maine. I think you will find it is all across the country. There are more foreclosures on the books than banks are releasing to the public for fear of driving real estate down even further. The example I gave was the most extreme one I came across. I could not get the building in time beause another investor came and snagged it all in cash before I had the chance to talk to my bank and get the loan. I shifted my focus to silver, but I still have an eye on real estate. There are some killer opps out there. For example, this property took me all of 90 seconds to find.

Maine » Kennebec County » Waterville
Displaying 6 of 48 Listings
«6» Print

Contact
Property Listed By
Kim Moxcey
000806
p207) 873-2119
ext:14
kim@c21nason.co
m



Century 21 Nason Realty
Office 1092
p207) 873-2119
f207) 873-6843

Multi-Family - Public Synopsis


Current
73 Summer Street
Waterville, ME 04901
Kickout: No
List Price: $62,900





Nice spacious two family with two 3-bedroom units. Features updated vinyl windows, paved drive, large out building, 2 porches, large yard and more!


Directions: Silver St to Kimball St. Take right onto Summer St. Home down on right.


MLS#: 1012904Request More Info

Property FeaturesStyle: Multi-Level,New Englander
#1 Brm/2 Brm/3 Brm: 0/0/2

Finished Square Footage
Above Grade±: 2,713
Below Grade±: 0
Total±: 2,713
Source: Public Record
Foundation Mtrls: Brick, Poured Concrete
Basement Info: Full, Unfinished
Year Built ±: 1940
Color: tan
Construction: Wood Frame
Exterior: Asbestos, Wood Siding
Roof: Shingle
Floors: Carpet, Vinyl

Heat System: Hot Water
Heat Fuel: Oil
Water Heater: Off Heating System
Cooling: No Cooling
Amenities: 1st Floor Bedroom
Equipment: Cable, Internet Access Available

Veh. Storage: Detached


Unit: #1 #2 #3 #4 #5 #6

Level: 1 2

Rm/Bd Rm: 5/3 5/3 / / / /

Full Baths/Partial Baths: 1/ 1/ / / / /

Gross Mnthly Rent per Unit: $695 $695 $0 $0 $0 $0


Land FeaturesLot Size(Acr) ±: 0.330
Zoning: RB
Surveyed: Unknown
Seasonal: No

WtrFrt: No
Site: Open
Location: Neighborhood
Roads: Paved, Public
Road Frontage ±: 150
Transportation: Major Road Access

Water: Public
Electric: Circuit Breakers
Gas: No Gas

If you pay 20 percent down on this property and carry a mortgage at 6 percent your monthly payment will be roughly $300 a month. Your rent roll is $1,390 a month. This leaves you $1,090 to pay for insurance, a property manager, and any other expenses you may incur. I know people that would manage this property for very little expense. I can not tell you what the insurance would be on this property, but at first glance I can tell you that this thing is going to cash flow at least $500 to $600 a month.

I can do this all day long brother. Real Estate is having a fire sale and the investors are the big winners. I am just starting out, otherwise I would already own several of these. I have to be careful how I choose to use my capital, and i often find myself choosing wrong. lol hahaha

2 and 3 units may be smaller than what you are looking for, but I can find larger units that cash flow just as well. They are completely out of my range, but finding them is not a problem.

Originally Posted by davidil

Great stuff. I'm going to dedicate the next two weeks to read books about investments. Can you please recommend some ??? That would be a great help. Just the top 1-2 books that you think is a MUST when it comes to learning how to invest your hard earned money...

THANK YOU!

The Wall Street Money Machine by Wade B Cook. It is a little hyped, but teaches stock options better than any other book I have ever read.

Rich Dad, Poor Dad by Robert Kiosaki. This might be too general for you. You are at a place financially that I am aspiring to reach. The book had a big impact on me for it helped me to understand cash flow, the difference between assets and liabilities, and other general concepts that helped me to understand the investment game much better. For me the book was a revelation, but for someone who is already familiar with these concepts and has used them to become successful it might be boring.

I took the Rich Dad Real Estate Coaching program. It was way too expensive in my opinion, but I did learn a lot. I am willing to bet you can get the same info in the bookstore for less then 1/10th of what I paid.

If you decide that real estate is an avenue that you want to pursue the most important thing you need to be able to do is calculate cash flow. You will want a financial calculator so you can figure monthly mortgage costs. You then want to add the costs of management, insurance, and any other expenses. Once you have the monthly cost of the building subtract this number from the monthly rent roll and you have the cash flow of the building.

Real estate has many advantages over other investments. Despite the major dip in real estate prices, rents (in this area anyways) have been relatively unaffected. This means the further the price of a property goes down the better the opportunity is for cash flow, this increasing your ROI (return on investment). There are tax advantages, depreciation, 1031 exchanges, etc. Plus, real estate is one of the few investments that you have the power to increase the value. Add a garage, paint the building, build a new porch, these are all things that can increase the value of your investment. With silver, or stocks, all you can do is sit and wait, hoping you made the right decision.

I also see this site as a great resource. It is clear from reading the responses that there are people here that know a lot more than I do. I think that is awesome. It is an incredible opportunity to learn from those that have accomplished what I am looking to do.

I am fascinated by the game of money. I have researched a lot of different avenues. If I have any information that can help you I am more than happy to share it. The more I learn, the more I realize how little I know. If I find myself getting taken to school, I am more than happy to be the student too. I am just looking to surround myself by people who are as into this game as I am.

Originally Posted by arpeggiomeister

I like the naked put suggestion, and in the case of this poster it would be well with in reach. I believe you must be an accredited investor to play that game and I am not.

You don't have to be a full AI. I'm not sure how much $$ you have to have to qualify -- probably depends on your broker. But even stodgy old Fidelity lets me sell naked puts -- in an IRA no less!As long as you have the $$ in the account to buy the stock if it drops to your strike price, it's not really "naked." Don't know about Scottrade but most brokers should allow that. You just have to get approved for options trading and option selling. For most brokers I think that just involves signing forms that say "I'm a big boy and understand what I'm geting into."

Originally Posted by garyfritz

For example: NLY

I have traded NLY options several times per year for several years. One of my all time favorites.