You've no doubt seen all of them or study them. Glossy advertisements or four-color propagates in magazines and newspapers promising to teach you every one of the juicy details about successful real-estate investing. And all you need to do to learn all these real estate 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 you could make intelligent, profitable real-estate investments with zero money lower (with the exception of, of program, the hefty fee you buy the workshop). Now, how attractive is which? Make a profit from real estate investments you created using no funds. Possible? Not probably.
Successful real estate investment requires cash flow. That's the type of any type of business or perhaps investment, especially real estate investing. You put your money into a thing that you desire and plan is likely to make you more income.
Unfortunately too few newbies towards the world of real estate investing think that it's any magical form of business where standard company rules will not apply. Simply put, if you want to stay in property investing for greater than, say, a evening or 2, then you will have to generate money to make use of and make investments.
While it may be true which buying real-estate with simply no money down is easy, anyone who is even made a simple investment (such as buying their particular home) is aware there's a lot more involved in real-estate investing that will set you back money. For instance, what regarding any required repairs?
So, the number one rule people not used to real property investing must remember is to have accessible cash supplies. Before you determine to actually perform any property investing, save some funds. Having slightly money in the bank when you begin 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 within rental attributes, you'll want every single child select only qualified tenants. If you have no income when property investing inside rental qualities, you might be pressured to take a less qualified tenant as you need somebody to cover you money so that you can take care of repairs or attorney at law fees.
For any kind of real est investing, meaning leasing properties or perhaps properties you buy to sell, having funds reserved can permit you to ask to get a higher price. You can ask for a greater price from the owning a home 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 real estate investing is, well, greed. Make the profit, yes, but will not become thus greedy which you ask with regard to ridiculous rental or resell rates on all of your real property investments.
Those not used to real est investing need to see real estate investing as a business, NOT a spare time activity. Don't believe that real property investing will make you abundant overnight. What enterprise does?
It will take about six months to decide if property investing set for you. If you might have decided that, hey I love this, then provide yourself a couple of years to actually start earning profits. It typically takes at minimum five years to get truly successful in property investing.
Persistence may be the key in order to success in property investing. If you've decided that real-estate investing is perfect 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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