Here is how to avoid RISK… - Posted by HR
Posted by HR on February 01, 2001 at 09:13:53:
I HATE RISK!!! So, I don’t blame you that you don’t like it either. Who wants to put their family, their future, their credit, their savings, their mental and physical health in jeopardy over something? I sure don’t, and I’m glad you don’t either. I want to take low-risk steps: steps that will ensure my families health and wellbeing in the future with reasonable certainty. If you want that low-risk kind of stuff, here’s what you need to avoid:
- Hold onto your hat, Fanny, but the HIGHEST RISK thing you can do is nothing. What? Yup. Nothing.
Let’s analyze this rationally, Tammy. You and I live in the richest nation on earth and the richest civilization ever in the history of humanity. (Wow). Tammy, over 95% of the folks that retire won’t be able to support themselves like they are accustomed to, and many will have an economically downsized golden years. Know what that means?
It means that the 9-5 work grind of job, savings, consumerism IS NOT GEARED TOWARD FINANCIAL FREEDOM! Analyze the numbers. Our whole work life is geared toward consumerism and financial bondage. Meditate on this for awhile. Look at all your neighbors, your friends, you daughter…95% of them will end up in the hole at the end of their life. And that includes you.
So, want high risk? Do nothing. Nothing could be more high risk, and more certain, to lead to financial struggle, physical and emotional stress, hardship, and hassle than doing nothing. Antidote: Don’t stay on the same path. Learn to invest so your investments can eventually take care of you. RE is the BEST investment vehicle around.
High Risk Stance #2) Start a business you don’t understand. It never ceases to slay me how many people here get into rei and don’t know the basics about contracts, re law, landlording, etc. Want big risk? Take on a money area like rei and have a beginner’s level education. Ohhhhhhhh-weeeeeeee! Are they headed for an expensive, emotional lesson from the school of hard knocks!
Antidote: become at least an intermediate level investor before you jump in. How? 1) Join your local real estate investing group (reia; chech national’s website for a local directory near you: www.nareia.com). 2) Read everything here and post questions; 3) Read everything at your library; while some of it is dated, the concepts are timeless and that’s what you need to know. 4) Buy Investing in RE by Eldred and McLean, 2nd Edition (about $20) and Creating Wealth and Multiple Streams of Income by Bob Allen. They are the best primers available. 5) Visit your local bookstore and browse frequently if you don’t have much cash (I think, so far, you have only spent about $100 if you do all this, and, if you do it, your knowledge level will definately be enuf to start). Finally, start with one area of rei and consider buying a course so you can master that niche. All the courses available here are excellent and reliable.
High Risk Activity #3: Succomb to paralysis of Analysis. Know what that is? It’s the fear of making mistakes. What if my numbers are wrong? What if I projected rents too high? What if it costs more to renovate? yada yada yada. If you have joined your club, read those books, focused on a niche, and have some other, more experienced folks to bounce this off of, they will help you avoid deadly mistakes.
Make no mistakes about it, Tammy: you will make mistakes. It’s how you learn. No course, mentor, or reia member will tell you everything you need to know. As Ed Garcia correctly says, the street is the best mentor. So hit the street. Just hit it with a reasonable level of preparedness and not reckless abandon (High risk action #2 above).
Fear alone can’t motivate us, though. Read the success pages to see what others have done. Remember, Tammy: few of us are geniuses. If we can do it, you can do it.
Tammy, this month I bought 4 houses no-money down. When I finish rehabbing them, rent 'em, and refi 'em, I will have a positive net cash flow (after all expenses) of over $3000/month. Could you use an extra 3k a month?
I know folks in my local reia group that have just started and make an extra 5k on their first flip deal. Could you use an extra $5000? I’ve made $15,000 once on a flip where I didn’t even lift a hammer. Could you use an extra $15,000? Then 1) Take the Right Action in a Business (re) that you are committed to and are learning to master.
The choice is yours, Tammy. I, too, have a daugther. She will be three next month. I know for a fact this little girl will inherit millions when we die and pass on our estate to her. How’s that for a legacy? Want to give it to your daughter? Anyone in America can do this… if you learn how and persist, persist, persist.
Your accomplishments will eventually speak just how bad you wanted it.
Wishing you unrelenting desire to succeed,