Chapter 22: Summary
Unless you already have substantial real estate investment experience, the chances are you now find yourself rather overwhelmed with the knowledge you’ve just gained. That’s a natural reaction. There is a lot to learn. Yet, would you be surprised to also learn that you’ve only just scratched the surface? One of the most difficult aspects of trying to write a book such as this one is to determine where to limit the discussion. How much detail should I go into as the author? Where is the line drawn between tweaking the reader’s interest and drowning the reader with minutiae? Should I have provided a sample contract and then spent pages explaining the “why” behind each entry? Recognize that there is a separate contract for each and every concept discussed in this book. Where does one draw the line?
I suggested at the opening that I would try to respect your time and mine. Hopefully I have done so and still presented enough in the way of facts and examples to enable you to proceed at your own pace. That was certainly the intent.
Where do you go from here? Anywhere? Within Pareto’s Law, are you part of the 80% or the 20%? Furthermore, are you part of the 20% of the 20%? If you’ve read this far, I’d certainly like to think (hope) that you’re part of the 20% of the 20%. But the decision is yours. There is no law that says you have to be poor. That is a personal decision. There is also no law that says you have to be rich – also a personal decision. Note that both require a decision. You even make a decision by not deciding one way or the other. No-decision automatically ranks you in the 80% category. So what’s it going to be? Can you step outside your comfort-level box and make something happen? If you can’t or won’t, I promise you that tomorrow will be exactly like yesterday and all you’ve done is waste another couple of days of your life.
I bought my first stock when I was age 10. I’ve remained an active investor for over 65 years. I’ve worked for others and I’ve owned my own businesses. The first and most important aspect of everything I’ve ever done is that it be fun. When it was no-longer fun, I quit and tried something else. I’ve tried many, many ways to make money over the decades. While I’ve generally succeeded at most, the best way I’ve found, bar none, is real estate. I’ve concluded it’s because I make the decisions rather than having to trust someone else to make those decisions on my behalf. I’m less likely to be swindled by a Bernie Madoff or a Jon Corzine. I know who to blame if I fail. The buck stops here.
We now live in an environment where we have unheard-of access to information not even available just a decade ago. Dare to tap that information-source and go make yourself a bundle while helping folks solve their problems.
Numbers tend to frighten many people. To save you time and to facilitate quick calculations, I’ve computed the multiplication factors to be used based on what minimum investment return you are willing to accept. To use the numbers listed below, pick the minimum investment return percentage you would be willing to accept. Then use the multiplier factor that I list and multiply that number times the NOI of the building you’re considering to find the maximum price you’d be willing to pay. As you would expect, the higher the return you demand, the less you are willing to pay for the property. This is just a convenient shortcut calculation method.
MINIMUM INVESTMENT RETURN MULTIPLIER FACTOR
I became a teenager in 1948. All I could think of at that time was building and drag-racing hot rods plus I dreamt of one-day owning a functioning Dick Tracy 2-Way Wrist Radio. We got our first TV that year which was a 6-inch screen in a huge cabinet. There were no personal computers; we used slide rules. The Internet did not exist. We had a 3-party telephone meaning two other families shared the same phone line. We had to listen carefully when we picked-up the phone to make sure there wasn’t already someone talking on the line. Times have changed a tad.
Today, we carry more computing-power in our Dick Tracy Wrist Radios (Smart phones) than was contained in the entire Apollo Command Module. Yes, we went to the Moon with slide rules and vacuum tubes. That means that today you have access to more information than we could even dream would ever be possible.
In those days, I drifted from one idea to the next since I didn’t have any specific idea what I wanted to do for a career. I consider myself extremely fortunate that a friend told me Bill Nickerson had just published his “how-to” book and that I actually bought the book ($2.25 for the original hard cover if I correctly recall). Then I actually read it. Then I actually took action. What a concept!
You’ve just read approximately 80 single-spaced MS Word pages suggesting various ways you can move from the 99% to the 1% class. Hopefully I’ve tweaked your interest in at least one area that might possibly be profitable for you. I didn’t even charge you for this information (unlike the self-appointed gurus that think you should pay them thousands of dollars to attend their so-called boot camps because “everyone knows” you can’t learn what you need to know just from a mere book). All you had to do here was invest some time reading and considering the various alternatives offered in this summary. Why is this important to me? (I can assure you I am NOT an altruist!)
Back in the early 1960s, President John F. Kennedy said one thing with which I totally agree: “A rising tide lifts all boats.” No single person can do everything. Our society has developed and become the most prosperous the world has ever known because of a concept called “Division of Labor.” You’re free to choose what work you enjoy and are competent doing. I benefit because my interests differ from yours. That gives all of us the opportunity to work at what we enjoy while being able to also benefit from the efforts of others doing projects they enjoy. I can concentrate on my interests without having to also produce my own food, gather wood to heat my home or grow sheep to gather wool from which to make my clothing. Yet the folks in Washington, DC don’t understand this concept. They think that they are the source of our success. “If you have a (successful) business, you didn’t do that – others made that happen.” What they don’t understand or even want to understand is that unless we, you and I, produce something of real value, they don’t survive. The real world works exactly the opposite from what they tell us. So the more successful ‘the collective you’ are in your real estate program (or whatever you decide to do), the better the life I, my family and the rest of society can enjoy. I have a high proprietary interest in your success! The “Pie” is NOT fixed in size (Michelle)! The more success you and I achieve from our respective work, the larger that “pie” grows. Our success does NOT take away from someone else’s pie; in fact everyone’s pie keeps getting bigger when our economy is allowed to prosper (meaning when Government gets out of our way).
I analyzed what is happening in this country these days and realized it is not the America into which I was born and raised. I have zero interest in politics yet I wondered if there was something I could do which might make a difference in the direction our country is heading. I’ve been quite successful in helping other people manage their financial affairs and, as a result, become wealthy. Wealthy people do NOT demand that “Government Do Something.” So to whatever extent you follow my suggestions and become personally wealthy, you will have repaid me for my expertise and efforts to prepare this book. Meanwhile, I’ve derived a great deal of personal satisfaction by honoring and paying gratitude to the man that helped make my life more productive and enjoyable: Thanks again Bill Nickerson!
About the Author
As indicated in the Foreword to the book, the author started investing in real estate in the late 1950s. His first property was a store-front in Garden City, MI. It was purchased on behalf of an engineer-friend and his two brothers who wanted to open a retail paint store to complement their house-painting business. They were successful and per their agreement with the author, purchased the property for themselves at the end of the first year.
Then, Bill Nickerson’s book was published and as they say, the rest is history.
The author graduated from university with a degree in Mechanical Engineering. He spent the last half of the 1950s working in the Advanced Engineering Department of the Ford Motor Company. In 1960, Ford transferred him to their Aero/Space division in Newport Beach, CA. During the 1960s, he worked on the Mercury, Gemini and Apollo systems. Nine hardware items he designed, developed and manufactured went to the Moon. When Neil Armstrong stepped on the Moon, the author left engineering and spent the following 30 years running his investment advisory and personal financial planning business that he’d started on a part-time basis in 1965.
In the late 1990s, he sold his financial planning business and retired to the Hill Country of Central Texas where he has a home on a 23,000 acre lake. He also has a second home overlooking the Pacific Ocean midway between Los Angeles and San Diego. He is married, has 2 sons and 4 grandchildren.
He is still trying to decide what he wants to be when he grows-up but has never promised anyone he would grow-up. Any reader’s suggestions will be appreciated. :biggrin