Are you a battlefield warrior?

Posted: 17 Mar 2009 10:41 AM PDT Posted by Rob Minton Follow me on Twitter Have you ever watched the movie "Troy?" To me, the movie turned out to be a dud, except for one particular scene. Early in the movie, Brad Pitt's character, Achilles, is headed off to fight a life-or-death battle with an enormous warrior. A young boy was helping Achilles suit up for battle. The young boy had already seen the warrior Achilles was to fight, and he tells Achilles "I have seen the man you have to fight, and I would not want to fight him." Achilles responds: "That is why no one will ever remember your name." The message delivered was that nobody respects or honors those who do not fight. You might be wondering how this relates to real estate investing or wealth building? In my opinion, it relates on many levels because these things sometimes require you to fight. Those investors who choose not to fight lose massively. Here is what is lost when you decide to quit and not fight: They lose self-confidence because deep down they know they quit. They lose money on the actual investment. They lose the opportunity to become financially free. In fact, I would bet that most people who decide to quit do not realize the magnitude of what they have lost. They typically look at the short-term outcomes but completely miss the long-term ramifications as noted in No. 3 above. Let's go back to the movie again and change it a little bit. Let's assume that the warrior is Donald Trump and instead of fighting a battle, he is considering investing in a large skyscraper that is half vacant. The little boy is shining his shoes when he tells Mr. Trump "I have seen the property you are considering investing in, and I wouldn't want to buy that building." How do you think Trump would respond? The same way Achilles did. He would say: "That is why you will never be wealthy." At some point in your life, you need to become a battlefield warrior. If you don't, you will always be at the mercy of someone else. Not long ago, a partner of mine decided to leave our little partnership. I'm fine with him leaving the partnership, but I'm saddened because of the long-term ramifications of his decision. At some point, he needs to decide to fight. Where are our Battlefield Warriors? Why is it that when something goes wrong with an investment, most people complain, cry and say things like "This is too hard" or "This doesn't work" or "This isn't for me." It sometimes feels as though we are becoming a nation of sissies. Why are we so lazy and unwilling to fight for our financial future? Why is giving up the best choice? In Vince Lombardi's famous speech he said: "And in truth, I've never known a man worth his salt who in the long run, deep down in his heart, didn't appreciate the grind, the discipline. There is something good in men that really yearns for discipline and the harsh reality of head-to-head combat." This doesn't seem to be the case anymore. It doesn't seem as though many people want to face the harsh reality of head-to-head combat. Instead, they would rather give up and go home. Here is what author Carlos Castaneda said: "To be a warrior is not a simple matter of wishing to be one. It is rather an endless struggle that will go on to the very last moment of our lives. Nobody is born a warrior, in exactly the same way that nobody is born an average man. We make ourselves into one or the other." Building wealth sometimes feels like you are going to war. Many times, things don't go your way. You must become a warrior and fight when this happens. I challenge you to read any biography of any billionaire and not find countless examples of when they fought. Go read about Andrew Carnegie, John D. Rockefeller, or Donald Trump. I promise you will see that they are all Battlefield Warriors. Bill Gates had to fight a long and ugly anti-trust lawsuit — he prevailed. Andrew Carnegie fought several strikes at his steel mills. In one of these strikes, several people were killed — he prevailed. The "Donald" has fought many battles. In the 1980s he fought with tenants in a building he wanted to tear down. He ended up keeping the building and converting it into condos — he prevailed. (I'm not even going to mention the battle with Rosie O'Donnell…) John D. Rockefeller battled 20 different government lawsuits against Standard Oil. He lost the lawsuit and was forced to dismantle his company. In the process his wealth escalated further. Oprah Winfrey had a major battle with the dairy farmers over her comments on mad cow disease — she prevailed. I could go on and on with billionaire battles, the point being that battling is part of wealth-building. If you are afraid to battle, don't invest in real estate. You don't have to be a warrior to invest in a mutual fund. Simply mail your check to them and kick back and relax. Just remember, you have to keep saving and saving your money until you're 83-and-a-half so that you can retire some day. It's your choice; would you rather be Achilles, or the young boy who nobody will ever remember?

Trump Sells Palm Beach Investment Property

Have you heard the news? Trump sold one of his real estate investments in Palm Beach, Florida for around $95 million! Believe it or not, this investment was a single family home. I remember reading about this investment a few years ago. Trump purchased this home out of foreclosure for around $41 million. There was actually a great story behind the purchase, but I'll have to share this with you in another post. Here is a video from msnbc.com about the sale... It's impossible to determine Trump's exact profit. However, I would have to think that he made at least $35 million on one single family home investment. I factored in around $20 million in carrying costs and improvements during his ownership. This would bring his total investment to around $60 million. I thought the Florida market was terrible... Rob Minton

Good News You Haven't Heard Have you heard of the S&P/Case-Shiller Index? It's the widely accepted and oft-referenced statisitical tool that keeps telling us what every American knows by now -- that real estate prices have dropped. The index was developed by an economist from Welleley College, Karl Case, and an economist from Yale College, Robert Shiller. Their method of taking recent sale prices of homes and comparing those prices to previous sales prices has become the "go-to" source for media reporting the real estate story. You've probably read at least an article or two that had the phrase "according to the S&P/Case-Shiller Index ..." somewhere in it. What you've probably not read is that one of the Index's creators, Case, believes home prices might be near bottom. In this outstanding piece on Smartmoney.com, Case notes that the decline of new housing starts has been extremely dramatic -- only 975,000 in April of this year compared to 2.27 million in the peak of January, 2006. Meaning inventory is dropping drastically. According to the Smartmoney.com story, Case commented: "Every time this has happened before, housing-market activity has rebounded within a quarter and caught experts by surprise. In many areas, particularly outside the overbuilt markets of Arizona, Florida and Nevada and the huge bubble market of California, home prices may well stabilize and begin to recover before the end of this year." So the guy who created the index that every reporter seems to point to as proof the sky is falling is saying that things are looking up. But have you read that anywhere? Probably not. Have you read that the Case-Shiller Index, which in March reported price declines in 18 of the 20 major markets it encompasses, showed price INCREASES in eight of the 20 markets in its recently released April report? Probably not. Have you read that the Index is also showing a slowing down of price declines? Or that the sheer volume of homes that fall into the subprime housing category -- which makes up only 10 percent of the total U.S. housing stock -- is skewing down home prices? Probably not. Why haven't you read those things? Because the media are not reporting those things. I used to believe that the whole liberal media bias thing was a myth. But recently I've been paying closer attention and, especially now that the presidential election year is in full swing, what is reported depends on the source of the reporting. There seems to be political agendas involved. Or news outlets just want to report bad news because those are the headlines that sell papers or get clicks. There is a great quote in the Smartmoney story by S&P/Case Shiller Index Committee Chairman David Blitzer, who seems to explain why you've never heard any of the good news: "Other than Larry Kudlow of CNBC, none of the journalists who interviewed me after the latest release seemed at all interested in any of the positive developments." So don't wait for the evening news or the daily newspaper or MSN.com to tell you things are getting better. Pay attention to your local market. Study the statistics. Watch the trends. Because if you want good news, unfortunately you'll have to find it yourself. Mike Sivula Income for Life Cleveland

Hello Tami and All, Tom From Canada Here...

Posted: 16 Apr 2008 04:47 PM CDT Image (Inland Empirical) - Teeth Whitening in a Mall Every time I travel down from Toronto to the U.S. I pick up a new reason why the U.S. economy rocks. This time I was in Nashville, Tennessee, for a Dan Kennedy marketing whiz bang super conference and the mall next door had the best shopping I've ever seen. Now there's 2 things you should know about me: 1. I hate shopping. 2. I hate malls. Big time. But here's what had me in awe and made me actually want to go back several times during our stay. There were tons of people in there shopping. There were tons of people get massages. There was a line-up at the Tony Roma's rib joint. There were people walking around with bags of freshly purchased stuff in their hands. There were boats rolling out of the Bass Pro Shop. There was money flying every where it seemed. There was a guy lying down in the middle of the mall who had paid to have his teeth whitened and some laser beam thingy was stuck in his mouth. And there was even a lady PAYING good money to breath in oxygen from a tank. Just think, last time I checked you could get a whiff of the stuff for free but someone was paying to have little hoses stuck up her nose. Nuts, but I almost paid to do it myself (just for the photo opp I swear!). So why I am sharing this with you? Because to a big city Canadian (the Toronto area has about 5 million people so don't get me started about how we're small time up here ok) this little town of Nashville seemed to be ignoring CNN. People were spending money like it was going out of style. From watching your news up in Canada we all believe you guys are hiding at home stashing cash under your mattresses. And then my wife runs into a Realtor who explains she can't keep up with business. She's dealing with a lot of foreclosures but she's busy with people snapping them up. Her bank can't keep up with her apparently. The next day I fly back home and turn on CNN. And I hear all the negative stuff the Lou Dubbs or Dobbs or whoever is spitting out and it seems like the sky is falling. But what I just witnessed doesn't match what I'm hearing coming from good old Lou's mouth. And then I got thinking....maybe my perspective, being from out of the country, is making this more clear to me. Why is the U.S. media opposed with broadcasting fear/doubt/uncertainty to you guys? And they're airwaves reach us so everyone up hear basically thinks things are falling apart in your neck of the woods. But then I flash back to my Nashville experience and it doesn't add up. Us Canucks are looking at the U.S. real estate like it's a blue light sale at K-mart (now I'm really dating myself). Now... I've been around long enough to know that spending a few hours in a mall doesn't give me a degree in macro economics. My father lost a lot of money on a flip during the heavy real estate crash and recession in the early 90's....so I've seen a few horror stories up close. But from my perspective there are obviously pockets in the U.S. where things have turned. And I'm sure their are communities that are still suffering. But to paint everything with the broad strokes that CNN seems to be using can be misleading. Real Estate is a game that is different community-by-community and street-by-street. You need to find the people in your neighborhood that are the local experts. This is the time people like Trump make big money! My money says he's out there buying right now, not selling. So the next the talking CNN heads get you dizzy about what is or isn't happening maybe it's time to start ignoring them and doing your own research. Time to look out for #1 by being your own news source. Hit the streets, find the investors in your area making money right now. Here's something I bet CNN doesn't report... Ready for it. It's good. Real good. I always hear how the Canadian economy is solid and moving along really well. Which it is. The new found hunger for oil in Alberta and corn in Saskatchewan is doing wonders for us up here. But you know what. Even while our economy is humming along very well do you know which country has a LOWER unemployment rate than us? Guess. The U.S. Funny eh? Bet CNN isn't reporting that little gem. From my understanding the rates are calculated with slight differences but it's definitely an interesting little note, don't ya think? Amazing how interesting details are often ignored. If you guys wait too long to figure this out all your neighbors will be Canadians who picked up some great deals on prime real estate. And trust me, you don't want to be surrounded by us all day...you'll have to listen as we explain how we invented the telephone, baseball, basketball and hockey...and how our Canadian Loonie (dollar) is on par with your buck. Not fun I'm sure. Is it perfect smooth sailing ahead, no, never has been, never will be. Does the U.S. have to adjust to a rapidly changing global economy, yes. Is this the time to pick up some good U.S. real estate investments? My magic 8 ball says "affirmative". Will the masses follow this advice? No. More reason for you to do your homework and plow ahead. Until next time... Tom Karadza Income for Life Toronto