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Where do you get it?

Discussion in 'General Entrepreneur Discussion' started by pitboss, Jan 25, 2008.

  1. pitboss
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    pitboss New Contributor

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    I am one of the mass that want to "break free" or get in the Fastlane. I have a decent income with a family and bills but living paycheck to paycheck is not what I want for me or my family. My question is, how do you develop that trait called COURAGE? The courage to step up, make that investment (in whatever avenue) while not losing your shirt.:bgh:
     
  2. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    Welcome Pitboss. Great question. For me the "courage" came after I learned the definition of risk.
    To most people real estate investing is too risky. Investing in the stock market is too risky. The mentality is to hunker down and stay with safe investments. Couple that with the mantra of diversify to protect yourself from risk.

    If you do some realistic projections you will see where you will be in 20-30 years. That is usually where you will be playing it safe, no risk. However, you must realize that those projections are not guaranteed and may not provide for your needs.

    That is when you have a change in your definition of risk. I invest in RE because I can control more of the risk. I choose what to invest in. I chose when to get in and when to get out. I am in more control. It requires that I take responsibiltiy for my knowledge and finances. That may sound scary, but after I lost 25% of my "professionally managed investments" that were broadly diversified in 2000-2001, I learned. I will no longer pay someone to manage my finances while I am losing money. Heck, I can screw up that bad and not pay someone else. But I can tell you, now that I am in more control and heads up, I don't ever anticipate losing 25% in one year.

    You might want to read the book "Rich Dad/Poor Dad" for more about this. Good luck.:cheers:

    Greg
     
  3. pitboss
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    pitboss New Contributor

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    Thanks Greg! I will get the book. Just curious, how do you invest in RE? Are you a house flipper?
     
  4. Runum
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    Runum Platinum Contributor Read Millionaire Fastlane I've Read UNSCRIPTED FASTLANE INSIDER Speedway Pass Summit Attendee

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    I invest in rental properties. Until now my focus has been in the DFW area. Currently I am looking at other areas for different opportunities.

    I see you are from Alabama. You have a great RE investing oppportunities there due to the reconstruction after hurricane Katrina. I have been looking at just below Birmingham.
     
  5. yveskleinsky
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    yveskleinsky Bronze Contributor Speedway Pass

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    It seems that you are using the word courage to also describe knowledge. If you have knowledge, you don't lost your shirt (the majority of the time). It would be fool hardy of you to move forward without further knowledge, just to have "courage". However, the paradox with real esate and business is that often times knowledge (learning) often comes from bad judgement/mistakes! The goal is to still learn and not lose your shirt. So with that said, courage comes from confidence- confidence comes from experience and knowledge. Knowledge comes from a variety of sources, books, this site, seminars, etc. If you are looking to start in REI, join an REI group or mentor group in your area- there you can learn through other's mistakes and develop the confidence to take the first step. ...Often times when I am considering moving forward with something new I ask myself if I can handle the worst-case scenerio (generally, can I handle the bills for this property if it sits 100% vacant for 3 months?). If I can, the I move forward and focus on winning and learning the lessons I need to learn to be even more successful with the next venture!

    Keep asking questions, and never give up.

    Welcome to the forum!
     
  6. Autospun
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    Autospun PARKED

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    Knowledge is Power, and with knowledge comes the opportunity, and with the opportunity comes the cash (mostly) and hence people think money is power since with money, you can bypass the whole knowledge part and just hire someone to do the research for you. Just courage isn't enough, though it is needed. You have to make educated guesses and research on whatever is in your mind. Evaluate yourself, clarify your goals and plans. I've helped a few people get on the right track by pointing out things we take for granted, like not knowing whats on your credit report, even though its free(at least once per year). Not saving, even though there are savings accounts that can give APY of 4%, Not contributing to a 401k, even thou the employer can match it. And even not having a list of your bills and knowing exactly when they are due. It is by doing such little things that give us courage to do big things, only because at the end of the day, you know more about yourself and your lifestyle. And you can use that information to your favor.
     
  7. pitboss
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    pitboss New Contributor

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    Thanks all!!! That is what I am looking for, to learn from those who have learned. I will be back often!!!
     
  8. ocean
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    ocean New Contributor

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    Pitboss,


    If you used some different formulas to do the math, and look at the statistics, you would find that it is extremely risky to follow the path of an employee. For example, look at the average number of jobs someone will have in their lifetime, I believe it’s somewhere around 7?? This means that the probability of you loosing that “decent income†is very high.
    Calculate what you will make over 10 years if you stay with your current job. And then calculate what you would make if you lost that job in year 3, had to rely on savings for 3 months, and then took a 20% pay cut for then next 7 years. That number would scare the crap out of me!!
    Does it scare you that your hard earned dollar bill is a form of currency that has erosion inherently designed in it? Take my cookie story for an example:

    My dad told me the story of how he could go to the gas station and buy a huge chocolate chip cookie for a nickel. Today, at that same gas station, 40 years later, they still have cookies. They certainly aint as big as the ones my dad had, and they cost about $1.50.

    Now let me ask you this question:

    Did that cookie become more expensive?
    If your answer is yes, you need to take a look at what formulas you are using to do the math.
    There is a difference in business and consumer math.

    My answer is, no, my currency went down in value.

    Now let me ask you another question:
    Is buying a house to live in a good investment? After all, you save on taxes and the value goes up.

    If your answer wasn’t a resounding NO, you again are not using the best formulas.

    My answer is absolutely not!
    For every dollar I spend, I save what? .20 cents on taxes?
    For every dollar I spend, I pay 3 dollars over the course of the loan.
    If I do decide to move in seven years (the average length of time before a person sells), I will have wasted most of my currency on interest. I agreed to the terms of the mortgage which make me pay the majority of the interest upfront.



    The cost of that darn cookie went from .05 to 1.5 in forty years. The cost multiplied by 30 times. Look at your pay scale and tell me, is your employer going to pay you 30 times what you make now in forty years?

    A good friend of mine is looking at saving for college for his 6 year old girl. His financial advisor told him that by the time his girl reaches college age, she will need approximately between 1 and 1.5 MILLION dollars.

    Are you scared enough yet?

    I should do an analysis of the average consumer, and how much money they loose over their lifetimes, and how risky it actually is. Perhaps some day.

    I’m reminded of a conversation I had with a buddy of mine. He was overseas in the sandbox (Iraq) and told me about some of the intense situations he found himself in. He told me (paraphrasing): “I knew that if I stayed where I was, and tried to barricade myself in like a lot of guys, the chances of getting hit were so much greater. They would eventually know where exactly we were, and then we’d get their full attention. Instead, I took an active roll in my safety. The best way to stay alive was to attack. I was scared sh*tless, but if I paid attention, watched my surroundings, and kept alert, I would be able to move into safe zones between the lines of fireâ€.

    That is so relevant to our discussion. If you, Pitboss, take an active roll in your financial safety, and attack while paying attention, watching your economic surroundings, and keep alert, you’ll be able to move between the financial danger zones. THAT is where the money is made!

    He also told me that he knew how to listen to the chatter of battle. Close your eyes and play a good war flick that has a good sounding action sequence. It may first sound like a bunch of garbled chatter to you, but if you STUDY the different elements, you will begin to hear the symphony for what it is. For example: a 7.62 x 39mm round (AK47) travels a couple times faster than the speed of sound. You can actually estimate the distance of the shooter by measuring the amount of time after the round hits the side of your parked HUMVEE and when you hear the sound of the actual shot. Now you have an approximate distance and direction of the threat. (formula anyone?). If he didn’t learn that, he wouldn’t have known how to react, and it would have terrified him. Much as you are about entering the financial warzone. But since he did know, (and he taught himself that neat little trick, the Army didn’t, which goes to show that you are the number one factor in your education, not some course or broker) he was able to shrug it off and proceed accordingly (after the initial “OH SH*T!!†factor).

    The same with our situation. You hear all the “chatterâ€â€¦ The blogs, the newspapers, the talk shows, the ticker symbols… Learn to hear the symphony. Learn to roll with it.



    In summary, If you look at your present course from a business-mathematical point of view, you may find that it is indeed very risky. Perhaps, it’s not so much needing the courage to take on additional risk, and instead, being afraid of the consequences (however delayed they might be… 20 years, 40 years?) if you don’t take action. I think, more often than not, that is what drives people to do courageous things.

    There’s a quote: I would rather die on my feet, than live on my knees.
     
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