http://business.tonyrobbins.com/78/an-important-note-of-caution/
-Mike
Thanks, allagash. Interesting. What Tony said in those 22 minutes, for those who like it condensed is:
We are in a Financial Winter.
Prepare for worsening times.
Baby boomers (the rat bulge in the population snake) will drive up medical costs hugely. The Boomers have quit spending.
If you are in the stock market, be careful, stick to food and liquor stocks.
Get liquid. Stocks may crash Fall 2010 or Winter.
You can make the most money in bad times.
You make the most money when “stuff is so cheap that it is being given away”.
If you bought in 2006 you bought at the wrong time.
If you buy in 2010, interest rates are the lowest in history.
Add more value to what you have to sell.
Meet people’s needs. Help people.
That will help you survive the coming bad times.
Spring (boom time) will follow Winter.
I recommend you listen to Tony. But he didn’t say anything about getting into a bunker or stocking up on Campbell’s Pork 'n Beans. I think most of us are already being way more cautious with our spending.
Furnishedowner
Can someone remind me what Tony Robbins knows about business?..
And to Furnished Owner…
The time to watch your spending was when the easy money was being made…Now its time make purchases…Thats what’s wrong with the mentality of business people…They do things backwards…If people were stacking it away during the bubble period you have the available capital now to buy on the bid…I can’t tell you how it unnerves me when I hear how people are starting to save now…Hello…You should always watch your spending and saving…But when business is down %50 and you have expenses to pay the savings is paltry…Bubble decade was the time…Sorry for the rant…
In my opinion, at some point the baby boomers are going to realize that they’ve been sold a line of utter BULLSH*T when it comes to INVESTING their money.
I think there is a very REAL possibility of an entire GENERATION walking away from the stock market. This will happen as they actually approach retirement and realize they have NOTHING. They will then understand that their savings were simply a pawn in a game called MUTUAL FUND INVESTING and 401K retirement plans. The end result COULD be devastating not only for the early boomers, but also for their CHILDREN who will WATCH as their parents literally work till they die. Think about this…How many times do these people sit back and WATCH as one boom leads to another bust and the end result is always the SAME for them…NOTHING!!! They save and see those savings lost to market cycles. At some point an alternative will be DEMANDED and that
alternative is WHERE the next opportunity will be.
What we now have DOESN’T WORK!!! People have been SOLD a line of BS based on ridiculous projected rates of return.
Real Estate is a BORING way to get rich…It’s also a very SIMPLE way to achieve wealth that YOU CONTROL at almost every level. At some point the HERD will realize what we already know…UNFORTUNATELY for them…as ALWAYS…This realization will come too late.
I agree with fdjake…Problem is people leave the markets and buy the markets at the wrong time…Same as with Real Estate as fdjake has spoken about many times…You have to invest when people hate these investment vehicles…Real Estate is hated right now…Stocks are not…Problem is the American moron has lived high on the hog when times were good and doesn’t have any capital to invest…The American moron refinanced his house 5x and drives an SUV…has 2-3 flat screens…too big of a house…too big of a mortgage…credit card debt…living well above their means and doesn’t have jack $ht saved…So they are tied into working til they die like fdjake pointed out…Whats a retirement look like for %90 of people??..You think you can retire on 500k…?..Try again…500k is dog$ht…You need 2-3mill to live comfortably and the average American will never see that type of savings and will work til they die…As we all know Social Security won’t be around when we retire and even if it is the max amount is a joke…Consider if you invested the amount you paid into SS in RE you would have far more in income and net worth…This is why you have to try to make your way in business while you hold down that 9to5…You have to… What do u have to lose?..
I agre 100% with jakes post.
Its amazing the general public are fed things and they go with it.
My senior year of HS, they had a public speaker come in and talk to us about investing. He told about 500 of us students 3 things about investing.
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Stock Market investing = Good. You must put 10% of income into it and no matter what the FIRST 10 years of your working career, you will be a millionare and be able to retire when your of retirement age. There will be really bad years, and good years, but no matter what, you will always come out ahead given enough time.
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Real Estate = Bad. (Keep in mind this was 2009). Real Estate is bad because you cant always control when you want to get out (sell your house). Real Estate you will LOSE all your money because you have absolutley no control when the economy goes bad, and it eventually will.
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Must go to college. If you dont you will not make any money at all and will be a pathetic loser. College = success, no matter what.
All 3 are absolutley not true, however, he just basically convinced 499 of the 500 kids to be sheeple in this world we live in… and their lives might not turn out so good when it comes retirement age and Social Security/Stock Market money isnt their for them to live on.
Hoosier…
A guy named David Tepper owner and head trader of a hedge fund name Appaloosa just bought a $50 million summer house…In 2009 he made for himself $4 BILLION…With a B…Point being the wealthiest businessmen in this country are all somewhat invested in the equity markets…Now he is buying commercial mortgages for pennies on the dollar…Dont be fooled…A well rounded businessman has his hands in a few places and understands timing…Sheep do not…
Believe me, im not saying the Stock Market is bad. Obviously there is alot of money that can be made.
Im saying the people who just blindly throw money into it expecting that their retirement will just “work itself out overtime” are sadly mistaken.
The sheep create that opportunity. I love sheep.
This is why you have to try to make your way in business while you hold down that 9to5...You have to... What do u have to lose?...
Correct. I have met quite a few people that have done it this way and have done very well.
One more observation here…This one regarding ANTHONY ROBBINS.
I view Anthony in the same light I view a LUCKY ARTIST…
Being a LUCKY ARTIST is a very interesting reflection on society and how people VALUE things…
Dale Chihuly is a classic example: www.chihuly.com
This guy makes glass bowls and sculptures that sell for HUNDREDS OF THOUSAND$ and UP…Somewhere, at some time, Dale got LUCKY…The “HERD” decided his glass was worth boat loads of money, while other artists product was worth a FRACTION…
Dale gets $5000 for a glass bowl the size of a tea cup!!! But it’s ART!!
Read the biography on Chihuly…In between the lines you can see the REAL STORY…This guy uses “TEAMS of Artists” to create his pieces…In other words…a FACTORY!!! But read the glowing way this process is described on the site…The STORY becomes the VALUE!!
Another case in point…
There’s a guy in Southern New England that never went to a fancy ART COLLEGE, he actually worked in construction. Even as a carpenter he never had any formal training…Just learned by doing. And from all accounts wasn’t a “master carpenter.”
So this “carpenter” starts working on an old church…He salvages a half round stained glass window from the building and uses it as a head board for a bed he builds in an old barn he rents.
Here’s where it gets INTERESTING…He has this bed in the barn as he puts on some finsihing touches…A woman see’s the bed and loves it…She makes him an offer and he sells the bed to her…The BUYER has a connection with ARCHITECTUAL DIGEST MAGAZINE and one of the editiors decides to feature the bed in a small article about reusing building materials. Magazines are in the business of SELLING MAGAZINES…So the article tells the story of an “New England craftsman”
HAND MAKING beautiful custom pieces in an old barn…Making each piece based on what the “wood tells him” blah blah blah…
Well guess what happens to our “construction artist” after that article comes out???
He’s now a RESPECTED ARTIST with an “incredible eye” and is working on “COMMISIONED PIECES ONLY.”
To re-create that stained glass bed NOW…After the article…$55,000!!! But remember…IT’S ART NOW!!
This same guy just finished a clothing store in the Hamptons that he was paid a fortune for, because the owners wanted it to look like it “had been there for 200 years, and only HE had the VISION for the project!!”
PERCEPTION has become REALITY!!
Tony Robbins is “good” because OTHER PEOPLE say he’s GOOD. Art becomes VALUABLE when OTHER PEOPLE call it ART and say it’s good…That creates demand for it…It’s only valuable if the “STORY” is worth the price!
Thus another LUCKY ARTIST is BORN!!!
Robbins CREATES NOTHING…He SELLS himself as an “expert/artist” and was smart enough to get FAMOUS PEOPLE to endorse his methods.
THOSE people created the “Artist know as Tony Robbins” the same way A.D. created the “New England Construction Artist”
In the end Rookie is exactly right…
“What does Tony Robbins know about business.”
rookieNYC,
You are right that we should be buying now. I’m trying to wrap my mind around just getting some cheap houses and renting them out unfurnished. I just haven’t liked dealing with low income tenants in the past, but I need to get past that.
Really good posts from everyone. As for me, 1400 SF 'lil Spanish stucco house next to my office. With a HELOC that I used to buy a duplex. Paid $6500 cash for my used van, a Chrysler? One flat screen TV on the mantel.
I shrunk the business from 49 furnished rental homes at the peak to 27 now. Laid off staff, now down to 2 and 1/2 people. Had to adjust REAL FAST to the downturn in demand.
I used the boomtime to expand, not to save, not to buy stuff. Now I am paying off big chunks of principal every month, a mandatory savings plan enforced by short-term commercial loans. I could use some cash to buy other houses, but it would be the emergency fund I would be using.
Rookie and Jake, I think you guys are bigger risk takers than I am. You are making me think. As for Tony Robbins, the gist was that he went to Dubai (!) with some billionaires who told him the future. He went to Delphi to see the Oracles. You other posters are pretty good Oracles yourselves.
Furnishedowner
Risk takers?..I consider myself an oppurtunist…I only take a shot when I know I have an edge…Risk taker?..Risk takers shoot from the hip…I do not…The mentality to invest inverse of the herd is hard to do…Thats what I do…I know its a difficult concept for many to comprehend but that’s how u make money…But em when they hate em…Problem is that everyone wanted in on the real estate game when the banks were lending to anyone with a heartbeat…Thats what the problem was…Business is meant for people with capital…Real Estate has been devastated because of people in the game who were given loans that shouldn’t have been…Wall st has been demonized meanwhile its the mortgage brokers who signed these people up…Business is a zero sum game…Someone has to lose for someone to win…Take advantage of these times if u have capital…Even I have considered buying more units but I truly hate residential tenants…People with money put it to work in times like this…This is not the time to put it under the mattress…
Can someone remind me what Tony Robbins knows about business?...
I’m sure he’s come to associate himself these years with a pretty good circle of friends that know the markets well…
and is it just business…or also sentiment?
still need to get around to reading this one:
-Mike
allagash,
Please read it and condense it here for us! Looks like a great book.
Rookie,
Okay, maybe I am an opportunist like you. When I started renting out furnished houses people here told me I was crazy: “They are going to steal you blind and trash those houses!”
Now there are several dozen other people renting out furnished homes, and the rental agencies, too. I always had the backup plan of just pulling out the furniture and renting out like everyone else. I got rid of the SFR that didn’t pencil out.
Now that it’s difficult to get a mortgage loan, it’s the time to pressure sellers into carrying the note. Now that’s an opportunity. I just have to get my risk-averse spouse on board with an expansion.
I’m gonna shake the lint off that sock that was under the mattress.
Furnishedowner
FO,
Who says you have to take on all the risk and buy up every cheap deal you come accross? This is a time when Supply exceeds Demand. With so much supply you want to be very picky on what you hold onto. You don’t want crappy low end homes. You want GOOD homes in good neighborhoods at a cheap price.
I honestly don’t think we have seen the end of this downword spiral in house prices, I think there is more to come. You may or may have not have heard, but the banks and government institutions are currently holding back a HUGE dam of forclosures. They probably won’t release many of these at once, but they will slowely. All you need to do is gain MLS access and start making offers. I’m talking about lowball offers, the kind that make you blush!! It will be like throwing spaghetti at a wall, many won’t stick but some will. Take the ones you want and the rest you can flip to an investor, OR fix up some things up to make it look presentable and put it back on the MLS cheap. Trust me, people come out of the woodwork trying to get these cheapo properties.
As for the good homes you want to keep longer term, find some people with cash that want to put their money to work and get a better ROI than a CD can give them. Show them your current business model and the success you’ve had over the years and you should have no issues getting $$ to get your deals done.
This is def not the time you want to be sitting on the side lines. You don’t want to be one of those people 5-10 years from now saying " I shoulda, coulda, woulda but didn’t" when looking back.
I agree…Approach sellers and ask them to hold paper…U know the numbers FO…Make offers and see what sticks…As for the downward move I say you have to start to nibble at some point…A bell doesn’t go off to signal the bottom…The bottom is looked upon years later…If you are making a good ROI on your money what else matters…Its not like a decaying stock…Real Estate cannot go to zero…I firmly believe if being a landlord is your expertise then there is no better time to start building that portfolio of units…
I love hearing about all you guys being successful.
Some positive attitude on REI.com hasnt been very common in quite some time.
Throwing out lowball offers is fine, but some people will pass up perfectly good cash flowing deals hoping for that “home run.” Don’t dismiss a good deal just so you can say “I bought a house for 5k.” During the time it took you to do that, I bought 5 of them for 15-20k…and they’ll cash flow just fine.