50-50 It's Lifes greatest lesson.

General Real Estate Investing
1

It took me 50 years to figure out that in everything we do, I mean everything, we are right 50% of the time, and wrong 50% of the time.

Here’s a good lesson, lets say you are not sure if you are right or not, so you ask the wife and the Mother-in -Law, and 3 learned Rabbis, they all say you are right, wrong, your just partially correct and on average its always a 50-50 decision. And even if you employ an army of accountants, 2 bank managers and three Good Shepherds to advise you – nothing alters, its still 50-50.

I know many posters will disagree with this assertion, but think back over your life, think back over the last 25/ 35 years, now do you see what I’m getting at. Trace all the many takeover bids for the last 50 years, then check the results and profits- its always reverts to a 50-50 outcome. Some deals are good, some bad and that life.

2

I like your way of thinking

3

I think intelligence and experience can greatly slant those numbers (stupidity can slant them the other way). I don’t blame or thank fate for any of the occurances in my life.

4

RE Hustler,

I think you are WAY OFF on this one. In fact, I’d go so far as to say that this 50-50 theory is totally ridiculous. This must be one of those 50 where you are wrong!

I have dozens of rentals and I am certainly not 50-50. 100% of my rentals are profitable - 100%. Life is not about luck or some crap-shoot. If you educate yourself on whatever you want to do, there should be every reason to believe that you’ll be right nearly every time. Business is not that difficult. It is very predictable. 50% - not even close!

Mike

5

I would have to say I agree with Property Manager on this one. I wish my properties were all profitable. But I can definitely tell you that they are way over 50%. I also like to think that in everything I do I am usually more the 50% correct in the way I do things.

Joe

6

Shoot me down if you wish, but before you do look at the broader picture, think back to all those great adverts that never produced a lead, remember that job you took were nothing went right, remember that girl you had the hots for, what did you call her Miss Goody Goody Two Shoes, what a schemer she was and did you ever find that friend you lent $500-00 to? Rembember the wedding photos you would like to forget and need I mention the staff interviews you organised and arranged, what became of the wonderful staff who joined you and what you “told-the-world- about some of them” and if your still not convinced then what about Liz Taylor, Mickey Rooney, and Zsa Gabor life stories and their multiple divorces which speak volumes about the acccuracy of this rule. Lets look at the film industry, they make 1 good film and 5 duds. In fact failure is the norm, lets take the President, great guy, but the lightning war was over a year ago and no one told him. 50-50. I admit you can bat 80, bat 72, then zilch.
It all adds up to 50-50.

7

With an attitude like that, you should just quit REI right now! Getting it right 50% of the time in business just isn’t going to do it.

In fact, when I buy a rental, there is absolutely no doubt in my mind that it is going to make money. It doesn’t happen by accident or because I’m on a good batting streak. I make a profit because I understand the very simple math that is involved in evaluating properties and the reality of my business.

Get real!

Mike

8

I don’t know about you guys, but I’m 100% right 100% of the time… atleast that’s how I see it. My girlfriend tends to disagree about 100% of the time but what the hell does she know.

While I think the 50-50 thing has a legitimate meaning, I think it’s articulated incorrectly. It goes along with the Law of Conservation of Mass and Newton’s Three Laws of physics.

9

Danny,

Now that’s something I can agree with. Your being right 100% of the time is offset by some of my tenants being wrong 100% of the time. The law of conservation of right and wrong.

Mike

10

Settle down Boys and Girls. Lets remember Real Estate is on a high, but think back, can anyone remember 1932, with luxury cars for sale in Wall Street for $100 dollars and no takers, farm foreclosures, the terrible dust bowls that hit Kansas and Oklahoma, the Okies. The Bank Closures and Hooverville Tent cities for the homless and dispossessed. The history of the USA is very much a tale of toil, tears, trouble and sweat and don’t ever let anyone tell you otherwise.

All property values are artificial, they are based on jobs, production and optiminism. Real Estate values march with the nations mood. And they drop. Check your stock exchange figures, ask the Greek Odds maker in Las Vegas, 50-50 are good odds, you can make a living betting on even chances.

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Its possible to make money in any market, high or low. The market being high in some places doesn’t begin to prove your 50/50 theory.

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RE Hustler,

Maybe you should forget REI and start building a bomb shelter. You are a certified pessimist

Mike

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The history of the USA is very much a tale of toil, tears, trouble and sweat and don't ever let anyone tell you otherwise.

LOL. Spoken like a true Brit! We still kicked your a$$ in the Revolutionary War!

It’s my theory (remember, I’m 100% right) that just like matter is never created nor destoryed, either is value. Sure the value of currency changes and some can make it big just be exchanging inflating currency for deflating currency. Value always remains constant though. Sometimes markets and industries go up, other times they go down. It has nothing to do with actual growth, it’s just a disproportionate allocation of value. In order for the US to be the richest, most powerful country in the world, we have to take from other countries. We are rich as a direct result of places like Africa being poor. The global GDP is something like 60 trillion dollars (US). With the global population being near 6.5 billion people, that means to be equal, the GDP/ population is about $9,230 per person. For me to have more than $9,230, someone or several people have to have an equal amount less. For a market to grow in production of 50 million dollars, another market or several markets have to lose a total of 50 million dollars. If you have a quality of life the uses more than $9,230, there are people in the world who have a quality of life equally lower in standard.

While the value represented by US currency constantly changes, the true value remains constant. As the population increases, equal value per person lowers.

For the value of houses in a town to raise by 5% (excluding inflation), the values of houses in another town HAVE to lower 5%, or the houses in 2 towns have to each lower 2.5% or some other combination that could go on forever.

This doesn’t mean you can pretty much flip a coin to make decisions. Or that when you add up the rights and the wrongs in your life they always end up being 50-50. The odds in Vegas are much lower than 50%. Actually I heard, for every dollar gambled, the casino owner KNOWS they will keep 20 cents on average.

Edit: To add another analogy:

If the allied forces in Iraq were helping the Shi’ites (food, water, weapons, training, supplies, etc.), we would be proporationately and directly hurting the Sunni. Alive and well Shia means dead and suffering Sunnis. The same works in reverse. If we were (we are) killing the Shi’ites, we are directly and proporationately helping the Sunni. You can’t help one group without hurting the other and by hurting one, your helping the other. So by killing both sides, we are actually hurting and helping both sides. Therefore being stuck in this tug-of-war, the only way for the allied forces to exit without reprecussion from terrorist attacks is with total eradication of both sides.

14

What a wonderful compliment to be paid by you all, I’m a pessimist at long last. Thank you. I must confess I was never happy as an Optimist, I couldn’t sleep nightS, I worried over A, and always got zapped by B. So let’s agree one step foward is a 50% gain, and one step back is a 50% set-back. And thats life.

Why not read from your library 10 good biographies, pick all your business people books and you can trace in their lives initiallyy optimism and energy, then in their mid-40s it slowly sinks into pessimisn and pessimists are mature and well read and able, whilst optimists after some early success alter, some alter for the best, but many go downhill. Need I add that worlwide millions of mature people become recluses [WHY?] I’ll butter you all up by saying I want you all to become WELATHY MATURE PESSIMISTS AND RECLUSES, rugged and respected. God Bless.

Some very good posts indeed ABOVE, esp by Property Manager and Danny the Great [the long lost son of King Alfred the Great I presume]
OFF-TOPIC.
Danny mentioned kicking our ass in the Revolutionary War. My friend I’m a Brit, we do the kicking and shoving.
Have you forgotten already President Bush phone call to Downing Street on 10-11, we call it the 9-11 phone call, the President said in effect " You’d better come running our barns on fire". Being a Brit it pleased me no end to help our little cousins and all USA citizens, orphans and widows and Real Estate Investors. So you can all sleep nights - knowing we are not only there, but we aim to kill - not please our enemies, Nor do we intend to set a table laden with gifts in their midst?. [BOB UK]

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Eh he he he… what a bunch of hot air! I have two rules on this board. 1. When the topic turns to politics etc., I stop reading because it’s merely opinion anyway. 2. If a post goes over two or three paragraphs my “hot air” sensor goes off, and I stop reading.

My two cents on the 50/50 rule. I understand your thinking. Whatever the percentage is, the main thing is that we learn from mistakes and don’t make them again.

I would start a third paragraph but then I would have to stop reading. Oh wait… :wink:

16

If one step forward is equal to a 50% gain, and one step back is equal to a 50% loss, and there is an even number of both, how does anyone progress? This theory would have much more validity if it was about all people vs. individuals. “To every action, there is an equal and opposite reaction.” That doesn’t mean if you make $100, you’ll lose $100 sooner or later.

P.S.- Tony Blair is widely known in the US as being George Bush’s b***h, following him around in admiration, doing as he says. Sending 46,000 troops to Iraq by Mr. Blair is a very small percentage of the allied forces, although it’s a large percentage of the UK’s total military. The UK has been one of the many countries hit with an Islamist extremist attack post 9-11 therefore it would be in your best interest to cease those operations from the source. The enemies of this war are extremists, it’s no different than the KKK turning into an insurgency and trying to overthrow the government and kill everyone unlike them. Then an opposing group with a slitghtly different christian demonination doing the same. This is not a war of countries thus “pleasing our enemies” is inaccurate. Recruiting, training, equiping the countries military and police force is an effort to create a placeholder for the tug-of-war so the allied forces can bow out gracefully to a force capable of dealing with their own governing and extermination of extremists.

No, I’m not a long lost son of King Alfred, that would mean I’m a Brit and that’s certainly not the case. :stuck_out_tongue:

17

An optimist sees the glass as half-full; the pessimist sees the glass as half-empty – I’m a realist - I see a glass twice as big as it needs to be!

Keith

18

I just empty the glass and yell to the bartender to pour me another…

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Nah…I pretty much quit drinking – except an ocassional beer…“The Boy” is a bartender, though, until he finds a real job. I guess they like him – with him around, they don’t need to pay extra for a bouncer (6’4", 305, recently-graduated All-Conference offensive lineman)…

Keith

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6'4", 305, recently-graduated All-Conference offensive lineman

That’s a big boy!

An optimist sees the glass as half-full; the pessimist sees the glass as half-empty -- I'm a realist - I see a glass twice as big as it needs to be!

Sounds like another Life Rule…