SAVING MONEY can make you poor!

[diplomatic_lies]

Originally posted by STR8UP
People put 3-6 months living expenses into these kinds of accounts, but what if you get hurt and can't work for a year? Or the rest of your life?

But if ALL your money is put into high-risk ventures, what if they fail? I think at least 20% of your money should be put into very safe areas (ie. 8% long-term savings accounts).

Firstly because they don't need any attention, and secondly because it always pays to have a small portion of your money in the safest area. I'll bet many of the American property owners in the late 80s wished they had done that.

 

[STR8UP]

Originally posted by diplomatic_lies
But if ALL your money is put into high-risk ventures, what if they fail? I think at least 20% of your money should be put into very safe areas (ie. 8% long-term savings accounts).

First of all, much of what people consider to be risky is nothing but fear of the unknown. If you are willing to step out of your comfort zone you will be rewarded.

Secondly, risk is relative. If I were to try to climb a mountain without proper instruction I would probably die. But I am willing to take on certain financial "risks" that the general public tend to avoid because I know what I am doing.

Diversification and large cash reserves are middle class investment "tools".

Firstly because they don't need any attention, and secondly because it always pays to have a small portion of your money in the safest area. I'll bet many of the American property owners in the late 80s wished they had done that. [/B]

Usually an investment that doesn't require attention isn't much of an investment.

The rich don't get richer because they have a whole bunch of cash in the bank. They get richer because their money is always put to the highest and best use. They have staying power to get through a rough time because they can pull from their resources (borrow against assets or just a signature) to cover the temporary downturn. If they played it safe and kept huge cash reserves their money wouldn't grow efficiently. They know that markets are cyclical. During a dip they have the means to borrow so they don't worry about having a lot of cash. If it all makes sense in the end that's all that matters.

 

[icepick]

I think what the man is saying is that your money is just like you, it wants to get laid and reproduce also, it doesn't want to "play it safe" and be locked in a box somewhere.

All stupidity aside, the Ebay account suggestion is a GREAT idea. Ebay is actually doing much of the marketing for you in bringing in customers.

Of course, there is risk, but most of us are probably single, and will be able to get back up after a fall quite well.

Much of it is keeping your eyes open for any business opportunity, and having the time to see it through (which most of the world does NOT.)

I sense that a natural thing to do would be to try to find a step-by-step "guide" to making money (like the real-estate stuff for example) but the broader truth is that you just have to have your mind focused in that direction. You can make a profitable business around ANYTHING as long as you can get the job done better and/or cheaper and/or LOUDER than the other business down the street.

----

Did you guys know that there are even companies created that are based on "old debt"?

These folks buy "old" credit card debt (like from 1985!!!) for PENNIES on the dollar, and then try to collect the debt back. If they only get, say 5%, that is still a 500% profit margin!

I wouldn't reccomend it, it is immoral, but it is better than the thread I saw about people making "pimping businesses"!!!

 

[STR8UP]

Originally posted by icepick
Much of it is keeping your eyes open for any business opportunity, and having the time to see it through (which most of the world does NOT.)

Yes and no.

Like you said, business is more execution than it is anything. If you are good at business there is opportunity in almost anything. Not to say that you will never spot something others don't, but the "perfect" idea is rare and as soon as someone else sees you making money at it (or even thinks you are) they will be trying to do the same thing. Then your little loophole closes and you are right back to having to concentrate on beating everyone at the same game.

I sense that a natural thing to do would be to try to find a step-by-step "guide" to making money (like the real-estate stuff for example) but the broader truth is that you just have to have your mind focused in that direction.

Yea, a step by step guide can never exist because everyone is in a different situation, everyone has different tastes, tolerances, and what-have-you.

I have found that if you understand a few VERY important truths the details aren't nearly as important. They are:

1. Wealth is measured in net worth, not income, material possessions, or anything else
2. Wealth is built by acquiring assets (stocks, real estate, business)
3. Wealth is built QUICKLY by using leverage
4. Wealth is a product of choice, not luck
5. Wealth and time are intertwined
6. All money is a seed, whether cash or credit.

 

[OzyBoy]

Poor is if you have no money, if you save money how can you be poor?

 

[Reiki]

Poor is not being able to handle money.

 

[Mr. Fancy Pants]

Originally posted by STR8UP
I get this question all the time.

Thanks, I will look into this!

 

[cave dweller]

guru.........

Hey,

I know a man who is a real estate 'guru'.

But then again.........

His daddy passed away and left him 54 rental houses........

(I guess if my dad left me 54 houses I would be a big time real estate 'guru', also.)

cave dweller

 

[Inquire]

damn, u opened up my eyes.

 

[cave dweller]

Robert Allen.........

Hey,

A lot of people follow Robert Allen (a real estate guru).

I believe that-- that son-of-a-b1tch had to declare bankruptcy...

Why:

Because he was buying all of this rental property with his 'zero money down system' and got over his head.

People forget one thing here----If you borrow all of this money you have to pay it back.

But, what do I know.............I am just the cave dweller

cave dweller

 

[cave dweller]

the deal..........

Hey,

I am just trying to help you young DJ's here....

So,

Here is another 'tid bit' of info:

Donald Trump.........

You need to read between the lines (in his book) 'The Art Of The Deal'.

His daddy was a big time 'slum lord' and real estate 'guru' in NYC........

Well hell, if my daddy owned 400 or 500 rental units in NYC, maybe, I might have been a real estate investor at age 12 (like the Donald).

What I am saying is that most of us have to get out there and earn it ourselves.

cave dweller

 

[Coolage]

now, if you don't mind me asking, how do you guys get a good sized zero down mortgage?

 

[STR8UP]

Re: Robert Allen.........

Originally posted by cave dweller
Hey,

A lot of people follow Robert Allen (a real estate guru).

I believe that-- that son-of-a-b1tch had to declare bankruptcy...

Why:

Because he was buying all of this rental property with his 'zero money down system' and got over his head.

I have heard that most wealthy people have filed bankruptcy in the past. I don't se your point- although I don't advocate taking this route unless ABSOLUTELY necessary, what is the difference between somone who files bankruptcy buying assets and someone who files bankruptcy because they bought too much junk?

People forget one thing here----If you borrow all of this money you have to pay it back.

No, the wonderful thing about GOOD debt is that it pays for itself. Business debt (if managed properly, of course) will allow the business owner to buy inventory or equipment that MAKES him money. The real estate investor buys a rental unit and the TENANT pays his debts. It is definitely a balancing act to make sure that all of the bills get paid on time, but the reward is well worth the trouble.

 

[STR8UP]

Re: the deal..........

Originally posted by cave dweller
What I am saying is that most of us have to get out there and earn it ourselves.

cave dweller

Of course! But most people make it out as being too difficult or impossible for the average person to tackle. I started out as average as average could be. Anyone CAN do it but not everyone will.

 

[STR8UP]

Originally posted by Coolage
now, if you don't mind me asking, how do you guys get a good sized zero down mortgage?

I am purchasing a townhouse with a ZERO down mortgage.

"But what about the closing costs" you say?

I am writing the purchase contract so that the seller pays the closing costs. ZERO DOWN!

And this is only one of MANY ways to do this.

Buy a Carleton Sheets course and start studyin'.

 

[SELF-MASTERY]

So should I invest in a franchise and put off buying a home... I can live with my parents "as long as Im doing something productive." I'm willing to fail and go bust.
All I know is that I want to be my own boss.....

 

[sifer]

Originally posted by SELF-MASTERY
So should I invest in a franchise and put off buying a home... I can live with my parents "as long as Im doing something productive." I'm willing to fail and go bust.
All I know is that I want to be my own boss.....

I personally wouldn't suggest that.

Why not get truly productive and innovate something?

Let me give you an exercise.

Get a pad and a pen/pencil.

Write down ten questions.

5 to customers and 5 to businessowners.

Ask any questions you want, but here's a hint as to what kind of questions to ask:

Businessowners:
1 - How is your business doing?

Customers:
1 - What do you feel this society needs more when it comes to selling products or services?

Go and ask this to 10 customers and 10 businessowners.

You can start from there.

 

[STR8UP]

Originally posted by SELF-MASTERY
So should I invest in a franchise and put off buying a home... I can live with my parents "as long as Im doing something productive." I'm willing to fail and go bust.
All I know is that I want to be my own boss.....

Keep in mind that owning a franchise isn't really "being your own boss". You will have to follow their rules. Many of them require you to run the place. It's more of a job than anything, especially just starting out.

I don't want to discourage you, but you should know what you are getting yourself into. It usually takes a LONG time to develop the skills and the mindset in ANY business venture to be able to enjoy the more positive benefits of owning a business.

I like the "willing to fail and go bust" attitude. It takes that kind of strength to really make it big. Not saying that you WILL go bust, because another key to making it big is the ability to solve problems. I have yet to find anything that can't be overcome with a little creativity.

To answer you question- if you can live at home you have a HUGE advantage. I am teaching my ex how to do this stuff and she has the benefit of being able to stay at home for awhile. Going out on your own puts you at a huge disadvantage. I'm sure I don't have to explain the reasons why.

I highly recommend real estate. If you go that route you will at least have a place to live when your parents get tired of you!

 

[Reiki]

Originally posted by SELF-MASTERY
So should I invest in a franchise and put off buying a home... I can live with my parents "as long as Im doing something productive." I'm willing to fail and go bust.
All I know is that I want to be my own boss.....

Im going to do almost the same thing, im going to live with my mother for quite awhile, because it give me better business options and no living expenses to pay (except food and stuff). (my mom in return gets her whole house cleaned everyday, I do all the chores for her, she just gets to enjoy all the free time she has and she won't get lonely)

 

[cave dweller]

real estate

Coolage,

'No money down' deals you ask?

The real estate market has changed in the last 10 or 15 years...

The 'key' now is not to locate the property, but, locate the owner who has a 'Don't Want'er.'

ie:

an example....

I own a house that I 'don't want' anymore....

$100,000 fair market value
$60,000 that I own on a mortgage

But,

I am getting a divorce or I have just lost my job or whatever, so, I want to get rid of it fast.....

So, I tell you "Take over the 60 grand mortgage, pay the closing costs and give me $1,000 cash (so I can move) and you can have it...."

ie:

You just picked up a $100,000 house for $60,000, plus, closing costs. Oh yea, and 1 grand for me to move on......

cave dweller