As a long time subscriber of the IBD (Investor's Business Daily), I take this list to my heart and try to practice them everyday. These are the 10 traits that IBD found to be common among leaders and successful people:
1) How You Think Is Everything: Always be positive. Think success, not failure. Beward of a negative environment.
2) Decide Upon Your True Dreams And Goads: Write down your specific goals and develop a plan to reach them.
3) Take Action: Goals are nothing without action. Don't be afraid to get started. Just do it.
4) Never Stop Learning: Go back to school or read books. Get training and acquire skills.
5) Be Persistent And Work Hard: Success is a marathon, not a sprint. Never give up.
6) Learn To Analyze Details: Get all the facts, all the input. Learn from your mistakes.
7) Focus Your Time And Money: Don't let other people or things distract you.
8) Don't Be Afraid To Innovate; Be Different: Following the herd is a sure way to mediocrity.
9) Deal And Communicate With People Effectively: No person is an island. Learn to understand and motivate others.
10) Be Honest And Dependable; Take Responsibility: Otherwise, Nos. 1-9 won't matter.
Sunday, December 20, 2009
Monday, December 7, 2009
Positive cash flow by John T. Reed
Just found a wonderful, reality driven article on investing in cash flow rental property here. Some of the major points included in the article are:
1) The average operating-expense ratio of residential property is 45% plus or minus 2%. This is invaluable as most sellers/brokers that I came across with either failed to provide a solid income/expense statement or they would grossly under report the expenses and/or over stated the income. Instead of relying on these inaccurate numbers I simply used a 50% expense ratio (higher than what Mr. Reed mentioned in the article but it gave me some extra head room for mistakes).
2) Think from the tenant's perspective. Most people won't pay more to rent than to own. Sure a cash flow positive property is nice, but it is unlikely to find a tenant who would pay rent that covers all your expenses and debt payment (assuming typical financing of 70-80% of the purchase price). Apartment buildings would be less of an issue in this case as the cap rate is generally higher than single family residential.
3) Investing only in cash flow properties is extremely difficult. Reason being by insisting in generating positive cash flow, one must offer a purchase price that might be significantly lower than what other buyers would offer. Most buyers are "appreciation buyers" which means they buy/invest at market/over market price and hope for future appreciation of the property value. A positive cash flow investor will always be outbidded by them and hence never be able to participate in the market.
1) The average operating-expense ratio of residential property is 45% plus or minus 2%. This is invaluable as most sellers/brokers that I came across with either failed to provide a solid income/expense statement or they would grossly under report the expenses and/or over stated the income. Instead of relying on these inaccurate numbers I simply used a 50% expense ratio (higher than what Mr. Reed mentioned in the article but it gave me some extra head room for mistakes).
2) Think from the tenant's perspective. Most people won't pay more to rent than to own. Sure a cash flow positive property is nice, but it is unlikely to find a tenant who would pay rent that covers all your expenses and debt payment (assuming typical financing of 70-80% of the purchase price). Apartment buildings would be less of an issue in this case as the cap rate is generally higher than single family residential.
3) Investing only in cash flow properties is extremely difficult. Reason being by insisting in generating positive cash flow, one must offer a purchase price that might be significantly lower than what other buyers would offer. Most buyers are "appreciation buyers" which means they buy/invest at market/over market price and hope for future appreciation of the property value. A positive cash flow investor will always be outbidded by them and hence never be able to participate in the market.
Saturday, December 5, 2009
The Riz Kahn Show interviews Robert Kiyosaki
Here's a great video interview with Rich Dad Poor Dad author Robert Kiyosaki. If you don't have time to read his latest book "Rich Dad's Conspiracy of the Rich" I would highly recommend you to at least watch this 22 minutes interview!
Click here to watch part one of the video on YouTube
Click here to watch part two of the video on YouTube
Click here to watch part one of the video on YouTube
Click here to watch part two of the video on YouTube
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