Beginners guide to becoming WEALTHY

[STR8UP]

Originally posted by kingNav
What exactly is a convenience check?

The checks sent by your credit card company as an alternative method of accessing funds. I have one card with a $28,000 limit that sends me checks I can write for an interest rate of 5.9% for the life of the loan. And believe me, I take FULL advantage of that.

"How I made 2 million dollars in the stock market," "How to Wake up the financial genius inside you" (older books), "Rich Dad Poor Dad", A Donald Trump biography, "48 Laws of Power" are a few of them I've been reading. Are these going to get me anywhere or could my time be just as well spent reading comic books?

The books themselves will do NOTHING for you. The action you take with the knowledge gained will make you FILTHY rich should you choose to follow through.

Don't listen to your friends. I got busted on for years for being the responsible one. Guess who everyone is jealous of NOW?

Seriously man, it has taken me a long time to get to where I'm at, but I'm only 31 and get to travel the world (I hit Mexico and Jamaica February '02, Key West in November '02, Vegas in January '03, Europe in a couple of weeks and whitewater rafting in Georgia about a month after that) have gourmet meals several times per week, and live in an AWESOME downtown apartment. After lunch I go into work at about 1p.m. (only if I have to...I only work a couple of hours per day and a few days per week), if I feel like going to the mall or the beach or whatever, I go.

You have two choices. You can either a) Live an ordinary life with a boss and a job and a car payment till you are 60 something....OR....you can b) Resolve to learn and practice the unconventional principles necessary to facilitate EARLY retirement.

I'm hoping everything I read is somehow unconciously sinking in somewhere so in the future I can recall it and put it to good use...

You are still young. Even if you start applying the principles you learn, don't expect to see results for several years.

You will be faced with situations that try your resolve. You friends will attempt to convince you that you should be getting plastered 5 days per week instead of remodeling the house you just bought, but they will still be punching the clock while you are partying in your yacht if you stick with it.

One final note- should you choose to pursue wealth with such tenacity as I have, make sure you allow SOME time and money for enjoying your life. I don't want anyone to think that I crawled into a social cave while I was establishing my foundation. I always felt that although I made sacrifices, I still led a balanced life. Just bear in mind that the more focused and dedicated you are, the SOONER you will be able to FULLY enjoy the fruits of your labor.

 

[Shiftkey]

STR8UP, great thread! Very insightful.

Have you ever had to deal with elderly house sellers? Have you read this article? http://www.creonline.com/money-ideas/mm-061.html

What's your thoughts on dealing with elderly?

 

[Shiftkey]

I'm also wondering if you've ever been to court (or close) because of bad deals or tenants. If so, how did you handle it?

 

[STR8UP]

Never dealt with the elderly personally. That article sounds like it has some good advice though.

As for having to go to court...yes, several times. Most of it stemmed from business rather than real estate, but it looks like I may have a claim for some damages against a mortgage broker that recently caused me to spend about $3,000 on appraisals and whatnot after assuring me that he had a loan for me based upon a given set of terms. It went to the closing table yesterday and it turns out I had been hoodwinked. That's what regulatory agencies are for, I suppose.

I have had to evict several tenants. Fortunately this doesn't generally require a court appearance because the tenants are in the wrong and know it. They usually respond to all but the final court appearance which allows them to stay right up till the time the warrant for posession is issued and the sheriff comes knocking at their door. Worthless pieces of $hit! (sorry, had to vent)

One more piece of advice- if in doubt, always talk to an attorney. It doesn't cost, it pays.

 

[GordonGekko]

I found this site helpful if you are starting a business but lack capital: www.antiventurecapital.com

 

[jwhite17]

Curious about an idea

STR8UP,
What do you think of Russ Whitney's idea of being your own general contractor? He talks about how you must get severe quotes for the home improvement loan you want to get, and go to stores and ask for a contractor discount. Then find out the retail price and transfer it to an estimate form and mark it up 100 percent or more. So, if you had like 8000 dollars of improvements you could mark it up to 16000 dollars and the bank wouldn't still give you the home-improvement loan. And after that you would have an extra 8000 dollars or more(depends on how much you spend for improvements) to do with as you please, so you could invest it into more appreciating assets and pay off the loan with postive cash flow from the property. Anyways, my question is, have you ever done this to your properties? Also, isn't it kind of a form of lying to the bank, or is it completely legal?

 

[STR8UP]

Re: Curious about an idea

Originally posted by jwhite17
STR8UP,
What do you think of Russ Whitney's idea of being your own general contractor?

It is an absolutely brilliant example of one of the creative methods that can be employed to maximize your success in the game of business and investment.

Let me ask you this. If you WORKED for a company that does renovations, would you be wondering whether or not it would be ok to let your boss take the job? No? So why shouldn't YOU benefit from the profit that someone else is going to realize anyways?

If you are truly serious about getting ahead you will undoubtably be faced with multiple situations where you will be forced to make ethical and legal choices. I would highly recommend getting over your reservations about being an ethical goody-goody. Making decisions that violate the law, however, can get you into some hot water, so I wouldn't recommend going there.

Don't get me wrong. I'm not suggesting that you intentionally defraud little old ladies if you can find a loophole that allows you to do so legally. But issues that arise such as the one in question really cause no harm. You don't have to TELL the bank what is going on, but what they don't know won't hurt them. And it isn't as if you're going to be spending the money on crack and hookers (at least I hope you aren't).

You have to understand a couple of things. First off, bankers are a funny breed. They do all kinds of stupid sh!t that seems to make little sense to outsiders. I am in the process of refinancing my properties as we speak, and even after the lender had reviewed my credit report that showed I have NEVER paid any of my bills late, they still asked to see twelve months cancelled checks to prove that I had made payments on my properties over the last year. How much sense does that make?

Also, if you only remember ONE thing, remember that the entire premise behind becoming wealthy is finding creative solutions to problems and proving what others deem to be impossible can be done. And the more of these obstacles you overcome, the easier each deal gets.

 

[diplomatic_lies]

Is there a way to purchase property without ANY capital whatsoever, and make enough money (through renting) to pay off the interest from the loan and have enough leftover?

I've been considering this lately, but figured you could borrow from the bank without proof of a long-term job.

 

[STR8UP]

Originally posted by diplomatic_lies
Is there a way to purchase property without ANY capital whatsoever, and make enough money (through renting) to pay off the interest from the loan and have enough leftover?

Jeezus, you've asked this same question ten times. Read Building Wealth as I suggected and while you're at it pick up a few other books on the creative real estate investing. THEN if you have any questions ask me and I'll clarify.

 

[jwhite17]

STR8UP,
Thanks for the advice, I appreciated it. Now, I have to go get some credit, so I can get started. And of course I wouldn't use the money on drugs, but hookers, maybe, it depends on where my dj skills will be at by that time.
Thanks again,
JW

 

[Shiftkey]

I learned some interesting things today in my business law class that I don't think have been mentioned yet. This all applies to California law, but it might be just as valid in other states.

If you don't have good credit or the money to pay for a mortgage and you know someone who does (parent, good friend, etc), instead of getting them to co-sign which can be bad for their credit, you can instead get a "surety" (pronounced sure it e). Or in other words you can get a personal guarantee from the other person that you'll pay the mortgage. When a person signs a personal guarantee it does not show up on their credit at all, only a regular credit inquiry. This way in case you don't pay your mortgage payments, instead of it hurting their credit the loan provider can just sue the guarantor through you. But of course this shouldn't be an issue because you'd be charging rent higher than the mortgage payments. Loan officers or whoever usually prefer a co-sign, but if you ask for it they should allow you to do a personal guarantee instead because it's just as legally binding. After enough time passes by and you make 0 late payments, you can negotiate a new mortgage without the surety.

There is a law called Mechanics Lien Law, which applies to contractors. Basically what this law means is that when you hire a general contractor and even if you pay them, if the subcontractors (lumber yard, etc) don't get paid for their service these subcontractors have the right to put a lien on the property that the general contractor was supposed to work on. A lien meaning they own your property until paid (eventually they can even sell it!). There are a few ways to avoid this from happening. You can get an insurance company to set up a performance bond. This way if the general contractor ditches you without paying the subcontractors, the insurance company eats the cost. But bonds also cost money. A cheap way to make sure this doesn't happen is to ONLY pay the contractor after the work is done and they show you the receipts from the subcontractors. Another cheap way is to just pay the subcontractors yourself when the general contractor sends you the invoice, and you subtract this cost from the general contractor's fee.

I'm 99% sure this is all accurate, but keep in mind that my teacher just went over this today so there might be something I'm missing.

 

[diplomatic_lies]

Str8up, I'm going to retract my comments about Robert Kiyosaki. I've read his book again (read it first time when I was 16). I've read over Rich Dad, Poor Dad, and the second time I actually understand his meaning.


While the book didn't bring me anything, it gave me the ideas to begin learning about investment.

 

[STR8UP]

Shiftkey:

My Dad was talking about mechanics liens yesterday.

It will pay HUGE to keep filing away all of these little known facts that you run across...you never know when you might be able to use them.

You co-signer idea is the perfect example of the kind of information an entreprenuer digs up and puts in his (or her) arsenal for use someday.

I'm telling you, getting rich is only a matter of persistently (maybe more like relentlessly) pursuing the acquisition of appreciating assets, using CREATIVE methods to do things others say can't be done. It's really as simple as that.

Diplomat:

If you can grasp the mindset he presents and apply it to your life, sky's the limit to what you can achieve.

I've seen both poverty and wealth, and I can tell you that anyone who thinks Kiyosaki is full of BS isn't bound to reach their potential in life. Sure, even without thinking the way he does you may achieve a certain level of success, but without being able to think on his level you will never reach the top of your game.

 

[Lt dan]

bump

 

[backbreaker]

I have a list of around 100 or so Venture Capital or business Starting sites but have narrowed it down to around 10. Some of them I have personal contacts with so I won't post them here for thoose reasons, but if you are really interested email me and I will shoot you the list.

 

[HBK]

Hey str8up im 3/4 my way through rich dad poor dad, a really insightful book "dont work for money,let money work for you" really woke me up.just being a student (3 years left )and having little to no capital what do you think of network marketing? im looking into it,i believe its a good investment if done right. what "assets" should i be looking into a 20 years of age,with little to no money,graduatend havecapital to invest.Affording college fees rent etc s a priority now but hey having degree is an asset to parents hehehe

 

[Lt dan]

im about halfway through the book ( i downloaded it of the online, see im alreadyy saving money hehe) its a really good book it took me about a day to read half. well i was trying to explain to my dad whythe house wasnt an asset but a liability. i couldnt cuz he says the house appreciates so it is making us money. i said, wheres the money, he said its in the house and if we ever need the money we will sell it. so hwo would you explain to him tha it is a liability and not an asset?

 

[STR8UP]

Originally posted by HBK
Hey str8up im 3/4 my way through rich dad poor dad, a really insightful book "dont work for money,let money work for you" really woke me up.just being a student (3 years left )and having little to no capital what do you think of network marketing?

You might want to ask Kaisen about this one.

I do know one thing though....you're gonna have to work your ass off the same as with anything else. I've seen plenty of people start that kind of thing up and not follow thru, and they were very disappointed.

what "assets" should i be looking into a 20 years of age,with little to no money,graduatend havecapital to invest.Affording college fees rent etc s a priority now but hey having degree is an asset to parents hehehe

Yea, the degree keeps the parents off your back. It can also get you a job to make some cash to get you started in investing. Just don't forget that it will NEVER and I repeat NEVER make you rich.

The trap you must avoid is the one where you are constantly chasing a larger paycheck putting in 50+ hours per week making someone else rich. As long as you are constantly working on investing (or building a business) while you work for someone else you'll be ok.

Until you're out of school try to save some money, establish your credit, and learn all you can about building wealth.

 

[STR8UP]

Originally posted by Lt dan
im about halfway through the book ( i downloaded it of the online, see im alreadyy saving money hehe) its a really good book it took me about a day to read half. well i was trying to explain to my dad whythe house wasnt an asset but a liability. i couldnt cuz he says the house appreciates so it is making us money. i said, wheres the money, he said its in the house and if we ever need the money we will sell it. so hwo would you explain to him tha it is a liability and not an asset?

Don't let what Kiyosaki says discourage you from buying a home. This is one of the very few points that I disagree with him on.

I just got word today that the condo I reserved for myself two weeks ago for $252,000 is now selling for $276,000 and will increase to $288,000 in two more weeks. I'll write a separate thread on this.

Everyone needs a place to live. Why pay rent? I currently do but only because it allows me to live in the hippest part of town for a reasonable payment.

Most cases it is better to buy instead of rent. However, when you are first getting started it would be wise to look at purchasing your residence from a logical rather than emotional standpoint. Buy it with the intention of one day renting it out. Make sure the rent would cover your expenses. Buy a fixer upper and get some experience in remodeling.

I need to reread RDPD to try to understand where he is coming from on this issue.

 

[wheelin&dealin]

I found a good book if anybody is interested.

"Profitable Real Estate Investing" by Roger Woodson.