You've no doubt seen all of them or read them. Glossy ads or four-color propagates in periodicals and magazines promising to show you every one of the juicy details about successful real-estate investing. And all you have to do to learn each one of these real est investing surface encounters chuck russo secrets is to pay a rather high sum for a one-or two-day seminar.
Often these types of slick real estate investing seminars claim that you can make wise, profitable real estate investments with simply no money lower (except, of program, the hefty fee you pay for the class). Now, how interesting is which? Make a make money from real est investments you made out of no funds. Possible? Not probably.
Successful owning a home requires income. That's the type of almost any business or even investment, especially real-estate investing. You put your hard earned money into a thing that you desire and plan will make you more income.
Unfortunately too little newbies for the world of real estate investing think that it's any magical type of business where standard enterprise rules do not apply. Simply place, if you would like to stay in property investing for more than, say, a day or 2, then you will have to create money to utilize and invest.
While it might be true that buying property with simply no money down is straightforward, anyone who is even made a fundamental owning a home (like buying their own home) is aware there's far more involved in real-estate investing that will set you back money. For example, what about any essential repairs?
So, the number one rule people a new comer to real property investing should remember is to have accessible cash reserves. Before you decide to actually perform any real estate investing, save some cash. Having slightly money in the bank when you start real est investing surface encounters chuck russo can help you make more profitable real estate investments in rental properties, for example.
When real-estate investing in rental qualities, you'll want every single child select just qualified tenants. If you might have no cashflow when real estate investing inside rental qualities, you might be pressured to take a less qualified tenant since you need somebody to pay for you money so that you can take treatment of repairs or attorney at law fees.
For any type of real estate investing, meaning leasing properties or even properties you purchase to sell, having money reserved can permit you to ask to get a higher cost. You can require a increased price from the investment because you surface encounters chuck russo won't feel financially strapped as you wait for an offer. You won't be backed into a corner and forced to accept just any offer because you desperately need the money.
Another downfall of several new to property investing is actually, well, greed. Make the profit, yes, but do not become therefore greedy that you simply ask for ridiculous local rental or second-hand rates on all of your real property investments.
Those new to real est investing need to see real estate investing being a business, NOT a spare time activity. Don't think that real estate investing is going to make you abundant overnight. What business does?
It requires about six months to figure out if real-estate investing set for you. If you've decided in which, hey I really like this, then give yourself a couple of years to truly start earning profits. It typically takes at minimum five years to get truly successful in real-estate investing.
Persistence may be the key to success in property investing. If you might have decided that property investing is for you, surface encounters chuck russo keep plugging away at it and the rewards will be greater than you imagined.
The manic depressive market wildly swings up and down on each new news story: The Fed is meeting at Jackson Hole on August 27 possibly to discuss QE3 (or not), and that news may pump up the stock market. But China's banks seem to be using Enron's accounting manual, Europe's banks need liquidity and are loaded with bad debt, and U.S. banks only temporarily TARPed over trouble. Gaddafi's regime in Libya appears over, but Libya's oil output may not fully recover for years. Venezuela wants banks to open their vaults and send back its gold, but Wells Fargo says gold is a bubble. Pundits say gold is a barbarous relic, but exchanges and banks are now using gold as money. The U.S. is headed for hyperinflation with skyrocketing stock prices, but on the other hand, we seem to be deflating like Japan and doomed to a deflating stock market for another decade. Whom do you trust and what should you do?
No one knows where the stock market or U.S. Treasury bonds are headed tomorrow, but in my opinion, here are some fundamentals to consider.
The Bad News Isn't Going Away
Until we have real global financial reform and restrain the banks, we won't have sustained growth. The stock market hasn't hit bottom. There's a crisis of confidence in banks and all currencies. We haven't taken effective steps to tackle the U.S. deficit through productivity. We haven't examined spending to eliminate fraud and waste, and we haven't addressed our need for more tax revenues by eliminating the Bush tax cuts (for starters).
Savers are punished by "stranguflation:" negative real returns on "safe" assets, declining housing prices, and rising costs of food, energy and health care. The Fed touts the falling cost of I-Pads, but how often do you buy one of those, and how often do you eat?
Good News (for Now)
The USD is still the world's reserve currency. Even though we devalued the USD, there has been a global flight to U.S. Treasuries pushing down our borrowing costs (yields). No one in the global financial community feels the U.S. has done its best to correct our problems, but severe problems in Europe, China's inflation, and Middle East unrest has money running to the U.S. Since we've devalued the dollar, we appear to be a bargain for foreign investors, even though they are terrified by our money printing presses and the potential for inflating commodity prices in the long run.
How did I play this? My own portfolio is currently more than 20% gold with some silver, and I bought out-of-the-money call options on the VIX when it was in the teens with maturities of 4-6 months. This is "short" stock market strategy, one could have also done well buying puts on the S&P a few months ago. In the first big stock market downdraft in August, I sold the options when the VIX hit the high 30's, and I'll buy more options again if the VIX falls again. Many investors are not comfortable with options, and this strategy isn't appropriate for everyone. The rest of my portfolio is chiefly in cash or deep value opportunities.
What Happens Next?
No one knows for sure, and anyone who tells you he or she does is selling snake oil. The situation is fluid. We tried to reflate our deflating economy. Our massive dollar devaluation may encourage investment, because it's protectionist. It reduces our cost of labor, among a few other "benefits." The problem is that the Fed has printed money, and we haven't done anything to position the U.S. for greater productivity. We're trying to inflate our way out of a problem without investing in productivity. This is a very dangerous way of attacking this problem. Even more "stimulus" would just be an attempt to inflate our way out of our long-standing deep recession. That's the foolish and unsuccessful strategy we've adopted so far. That could lead to runaway budget deficits (our deficit already looks intractable) and bring us to double-digit inflation. Even the European flight to US Treasuries may not save us from a deeper recession in that scenario.
If we don't overreact -- and we may have already overreacted -- our dollar devaluation results in our foreign trade situation first getting worse (as it has now) before it gets better. Now is the time (actually, we should have started years ago) to spend capital to increase U.S. productivity. The dollar's plunge relative to other currencies will eventually make us more competitive. This will be good for blue chip companies, in particular those that own real assets and manufacture items. The Fed and Washington may do anything, however, so one must watch the news.
What does this mean for the U.S. stock market? In my opinion, it is currently not good value and feels like the 1970s when we experienced a recession followed by inflation. One should consider staying mostly in cash and expect stocks become cheaper. One might miss an interim rally, especially if the Fed announces QE3 (more "stimulus" and money printing) or more bank bailouts, but that is like using Kleenex laced with sneezing powder. We will see stock prices even lower than they are today. The old paradigm dictated that stocks were a buy when P/E ratios were 13 or less (and many are well above that), dividends at 4%, and book values at 1.3 or less. (This excludes oil companies, which tend to trade at lower P/E ratios in general.) I believe we'll see much better deals in coming months. In 1978/79 P/E ratios sank below 7 for blue chip companies.
Should one buy U.S. Treasuries with long maturities? The long end of the bond market doesn't reward investors due to the potential of rising interest rates. If interest rates spike to double digits, then one can reassess the situation.
Long term investors should consider buying commodities or companies that own physical commodities. We're running out of key commodities especially related to agriculture and fertilizer. Washington's brand of the latter isn't the type we need.
Ashton Kutcher probably gets more pitches in Silicon Valley than Hollywood these days.
The movie actor and technology investor turned up the star power at the TechCrunch Disrupt conference this week in San Francisco, where start-up companies competed for his attention. Michael Arrington, fresh off his own Hollywood worthy drama, interviewed Kutcher on stage Tuesday.
Kutcher plays a tech investor in real life and in CBS' top-rated "Two and a Half Men" on TV. His character, Walden Schmidt, is an Internet billonaire who sold his company to Microsoft and now backs other entrepreneurs.
"There are some parallels to my actual life," Kutcher said.
On the show, Kutcher said he covered his character's laptop with stickers of his "dream portfolio" companies but CBS balked at giving exposure to companies that hadn't paid for the privilege.
Kutcher told Arrington that his investments were a "witch hunt" for the next big thing "that is so magic you can't understand how it works."
"I wonder what would happen if a pilgrim would have seen a computer back in Massachusetts 200 years ago. They would have killed the person as a witch because the computer would look like magic. That's the essence of being a good investor, they're on witch hunts," he said. "That's what I’m trying to do."
Kutcher is not your typical celebrity investor. He was a biochemical engineering major in college so he gets technology but, because he was a model at 19, he says it's nice to be appreciated for "something substantial."
On TV Kutcher is in the funny business. But in technology he's hunting for happiness. Kutcher says he picks technologies that have the greatest potential to create more love, friendship and connectivity in the world.
He has made 40 investments in companies such as AirBNB, Path and Skype but does not disclose many of them.
"I think sometimes for the early-stage companies that I've invested in, disclosing that I'm an investor can be detrimental to the story of the company," Kutcher said.
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-- Jessica Guynn
Photo: Hollywood actor and Silicon Valley investor Ashton Kutcher and TechCrunch founder Michael Arrington at TechCrunch Disrupt. Credit: Araya Diaz / Getty Images
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