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1. Ca$hFlow
EXPRESS
No. 1 / Vol. 1 2012 Passive Income for Today & Tomorrow FREE
Learn How to Create Stock Investors Manifest a
Market Wealth Today “Cashflow” Mindset
By Doug Carver estate investing, trading stocks, building
Organizer Pasadena and Burbank a strong MLM business, etc. You will not
I
Cashflow Meetup Groups succeed. It’s like trying to grow corn in
a field of sand. The seeds will not germi-
can remember my first time play- nate and you’ll end up with next to noth-
ing Robert Kiyosaki’s Cashflow ing to harvest in the fall.
board game about eight years How, you ask, does this relate to the
ago and how it Cashflow game?
started a chain Well, after playing
of events that continues the game a bunch
to this day. What stuck of times, I learned
with me most was not the the “how to” of
“how to” of playing the getting out of the
game but the people that rat race, but I still
I met at the event. These was not able to
were not like the normal take what I learned
people in my life that from the game and
By Tyrone Jackson companies and products with which would tell me I was crazy Dougthe Cashflow gameChris Hanson dis-
play
Carver (left) and
to group members.
apply it to my real-
you are familiar. for trying to start my own life financial situ-
TheWealthyInvestor.net
Yes!
If you’ve ever opened a can of real estate business or ation. However, I
You can be Coca Cola on a hot summer day and that financial freedom was impossible realized that the time I was spending with
rich from felt refreshed and invigorated, why without a steady well-paying job. The my new Cashflow friends was changing
owning real not own the stock? It’s a product you people I met were excited about learn- the way I thought about money and my
estate and trading stocks. know with a story you understand. ing and expanding their knowledge on financial future. I no longer viewed the
We’ve all heard the story of the When I say “a story you understand,” how to achieve financial freedom. They stock market as a giant rigged system for
little old lady who lived modestly I mean to say that you understand were active investors in real estate and losing money. I began to see the tremen-
and worked as a school teach- how the Coca Cola the stock market. They were small busi- dous opportunities in the sinking real es-
er for 40 years. She never Corporation makes ness owners with a passion and vision tate market even as many people I knew
earned more than $35,000 per money, or to ex- for creating more financial success in were losing money on deals that had gone
year, owned a modest home, press it in Wall their lives. Overall, they had a mindset bad. Overall, I saw for the first time op-
and shared her life with two Street terms, you for prosperity that I like to call a “Cash- portunities all around me to create wealth
cats. Once she died, her rela- understand how flow” mindset. even as the newspapers talked constantly
tives discovered a $150,000 the company earns A lot of people complain that Kiyosaki of the “Great Recession.”
life insurance policy and $1.5 revenue. The more does not provide the specific details on Today as a result of my ongoing in-
million in stocks that she left bottles and cans of how people should implement his strat- volvement playing and organizing local
to the elementary school’s Coke that Coca egies to create financial freedom in his Cashflow events in Southern California,
scholarship fund. Cola sells around books and programs. Truth is he never I have a thriving real estate investing
The national media loves the world each day, spells out a step-by-step “how to” for business. It was after speaking with one
to air these stories. It seems the larger the com- building long-term financial freedom. of my Cashflow friends who was a real
there are several old ladies pany’s profit. Over What he does teach is far more impor- estate investor that I was encouraged to
who fit this seemly unique the past ten years Coke stock (symbol tant, and that is how to create a “Cash- start wholesaling distressed properties. It
profile year after year. How could KO) has risen from around $40 per flow” mindset. Kiyosaki describes it in turned out to be a great decision. More
that be? share to a high of $71 — $1000 in- his book Cashflow Quadrant moving recently, I’ve begun to learn how to suc-
Investing in stocks is not the vested in Coca Cola stock ten years your mindset from the E (employee) and cessfully trade in the stock market using
world’s most challenging task. In ago would be worth $4,100 today; S (self-employed) side of his Cashflow options. As a self-proclaimed real estate
fact, at its core, it’s very simple. The $10,000 invested in Coca Cola stock quadrant to the B (business owner) and “zealot”, I never would have dreamed of
truth is that the stock market creates would be worth $41,000 today. I (investor) side of the quadrant. In lay- investing in the equity markets. Howev-
millionaires every year. Investing in If you spend more than $100 per man’s terms, it’s the mental shift from er, after playing Cashflow 202 with my
stocks, with wealth in mind, is easier year eating fast food, why not own someone who seeks financial security at Cashflow friend ,who is an active trader,
than you think. the stock? Over the past ten years all costs to someone who can confidently and learning about his trading system, I
McDonalds stock (symbol MCD) has and knowledgeably take measured risks. was able to see the opportunity before
Invest In What You Know risen from a low of $15 per share to a This is a simplistic definition but a very me. I now fully expect that investing in
high of $95 per share. important one to understand. Without the the markets will be a huge part of my fu-
Wanna be a good stock market in- correct mindset, it really doesn’t matter ture financial success in addition to my
vestor? Keep it simple and start with Continued on pg. 12 how much you learn the “how to” of real
Continued on pg. 2
Personal Finance News from the Publishers of Realty411 Magazine - www.Realty411Guide.com
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E
ample, if you are a first-time home
veryone buyer (or even an empty nester), be
yearns for open to the idea of purchasing a du-
abundance plex or other multifamily property
and financial instead of a typical single family
security, it is a human residence. This way, you can live
desire we all share. It is in one unit and rent out the other
a motivation ingrained for income. As a landlord myself,
in us as part of our I know it’s not easy to live near
survival mechanism. tenants, but if you screen your pro-
While we all have this spective renters correctly, it will re-
in common, only a lim- duce future nightmares. Be smart,
ited few ever actually reach true financial let other people pay off your mortgage!
security. The statistics can be depressing. You can always save money and then buy
According to the Retirement Confidence another home later, after you build a pas-
Survey (2006), 53% of Americans have sive income stream.
less than $25,000 in retirement savings.
Plus, 30% mistakenly believe that they 2. Increase Your Formal AND Finan-
will only need $250,000 or less in total cial Education. Did you know that earn-
retirement savings. ing a bachelor’s degree can increase your
One of the problems in our society is income by $25,000 annually? Plus, it gets
a lack of discipline in regards to saving. better: According to Census Data, earning
In fact, a recent study by Harris Interac- a graduate degree will net a person an-
tive found that 57% of households do not other $20,000 per year — that’s $45,000
even have a budget (2009 Financial Lit- more, year after year! Now, don’t com-
eracy Study). plain about the high cost of education or
In my 20 year plus career in journalism, how “hard” it is to go back to school. My
I have interviewed many successful and former neighbor was in her 50s, running
wealthy people, from her own business and
celebrities to company attending graduate
CEOs. Undoubtedly, a
perk to this profession
school part-time. It’s
never to late! Real Estate
was being able to unlock
their secrets. I’ve com-
piled a list of important
It’s also important
to keep in mind that
universities do NOT
Syndication Lawyers
guidelines, which were teach people how to Private Placements • Group Investments
followed by many of get rich. So on top of LLC/Partnership Agreements • All 50 States
those who transformed your formal educa-
their mediocre life and tion, start taking class-
average paychecks into Linda with real estate mogul & educator es about investing. www.SyndicationLawyers.com
Dave Lindahl (www.REmentor.com)
extraordinary wealth. Financial classes are
These steps are not taught at most adult For information, call: 949-855-8399
easy to follow, but they will get you started schools and colleges for a nominal fee.
on a disciplined path and lead you toward I have also attended real estate seminars
creating a wealth-conscious mindset. for many years and have learned great tips
1. Reduce Your Household Expenses.
from top mentors, such as Dave Lindahl.
Looking for a Turnkey Rental in Kansas City?
In California, we have some of the highest 3. Be an Aggressive/Conservative In-
real estate prices in the nation so reducing vestor. Although it may sound like an
living costs can be a sacrifice. One move oxymoron to be both aggressive yet con-
that I have seen many real estate moguls servative, it isn’t. It’s all about planning.
make is that they start off their portfolio
with a multifamily investment. For ex- Continued on pg. 9
ebsite
The W nched Sign Up Online
t Lau ut
tha Deb
Our zine! for our Pocket
Maga
e-Mail Listings!
CASHFLOWCOWS.com CashFlow Express • Page 3
4. Focus vs. Diversification your control over your investments. It’s
extremely important to continue to in-
crease your financial intelligence in order
Diversification is not required if a person
knows what they are doing.” So if diver-
sification is a protection against ignorance
A CPA/Investor’s Analysis
to protect yourself. Unfortunately, finan- then when you diversify who’s ignorance
cial intelligence is not taught in schools are you protecting yourself from? Your
because such a large portion of the popu- ignorance and your financial advisors’
lation, including teachers and politicians, ignorance? Focus, not diversification, is
do not have a very high financial IQ. the key to more sophisticated leverage,
By Mathew Owens, CPA vesting in non-paper assets (i.e. not mutu- When financial advisors say that an higher returns, and lower risk.
www.ocgproperties.com al funds or CDs) allows you to use lever- increase in returns means an increase in The point I am trying to make is that
M
age as well, which increases your wealth risk, they are right when speaking about if you increase your financial intelligence
ost of by making your the paper assets they recommend to inves- about specific asset classes, like real es-
what money work harder tors that they make major commissions tate, you will learn how to control your
h a s for you. Most finan- on BEFORE showing performance. They own financial security and wealth cre-
been cial planners will are wrong when speaking for all assets. ation, instead of relying on some finan-
drilled tell you that using Financial advisors are simply salespeople. cial advisor who probably does not know
into our heads about in- leverage increases Most people invest in paper assets such as what they are doing. Look at the massive
vesting in mutual funds, risk. That is not al-
Most financial advisors
CDs paying down our ways the case if you
mortgage and diversify- have the right finan-
cial knowledge to
recommend diversification
ing is nothing but smoke
and mirrors. The financial control the invest-
services companies like ment and enable
Fidelity, Charles Schwab
and financial planners are
safety controls on
your leverage use. but they do not really diversify.
the ones making all of They will also tell
the money. The problem you that real estate
is that most people have is a risky invest-
very little financial edu- ment. The reason savings, stocks, bonds, mutual funds and wealth transfer that just occurred when
cation in order to invest for for that is that finan- index funds because they do not want to the market crashed while bailing out the
retirement properly so they hand over cial planners typically lack the financial take responsibility and control over their banks (i.e. the top 1% wealthy individuals
their money to someone they HOPE will knowledge about how to control real es- financial well being. All they want is to increased their wealth while the middle
have the right knowledge base to safely tate and make it profitable. Most finan- turn their money over to an investment class and poor decreased in wealth). This
increase their wealth. The problem is cial planners put people into paper assets advisor who hopefully does a good job. happened because most people do not
that these investment types are HUGE- where the investor does not have control Out of sight, out of mind. If people want have the financial intelligence to protect
LY RISKY. These types of asset classes, and therefore it is hugely risky to use more control, the first thing they need to themselves.
paper assets, do not allow the investor leverage. In real estate investments the do is increase their financial intelligence Starting to get financially educated is
control. Then during market crashes, all value of the property should not be based and, hopefully increase their financial the key to wealth creation. So get to the
most investors can do is watch helplessly on the “opinion” of an appraiser but on controls and leverage ratios. bookstore and start reading. Take classes
as their wealth gets whipped out along the income that it produces through rents. Most financial advisors recommend di- on financial intelligence and ways to in-
with their financial security. The value of the rental real estate is de- versification but they do not really diver- crease wealth. It is key to your success and
If you have more control over your as- pendent on jobs, salaries, demographics, sify. First they only invest your money preserving your wealth so that financial
sets then you are not affected as much by local industry, and supply and demand of in one asset class, paper assets. Second, predators (i.e. the government, financial
market crashes. For example, if you in- affordable housing. In a housing crash, mutual funds are already diversified in- advisors, and large mutual fund peddling
vest in assets like real estate that produce the demand for rental units often goes up, vestments which are invested in a pool companies) do not take all of your wealth
cash flow through rental income after all which means rents increase causing the of good and bad stocks which does not away by investing it in asset classes that
of your expenses are covered, if the real value of your property to increase. You increase the value or decrease the risk do not allow you any controls over those
estate market and stock market crash you can control rental real estate and which of the investments. Professional inves- investments.
are still in great shape. While everything geographic areas you invest in unlike pa- tors DO NOT diversify. Warren Buffett
is crashing you are still receiving your per assets that allow no control. Finan- put it perfectly when he said, “Diversifi- To contact Mathew Owens, please see
rents and do not need to sell the asset. In- cial intelligence is the key to increasing cation is a protection against ignorance. OCG Properties’ advertisement below.
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CashFlow Express • Page 4
5. Jump Start a New Year of Success Cash vs. Cashflow, pg. 6
If you get nothing from this article,
please get this. First, if you ever expect to
By Geraldine Barry tic but now as I grow yourself, this is a process it does not hap- create wealth and experience any sort of
Founder of SJREI and REI Voice and learn to navigate pen over-night. financial independence while you’re still
I
this game called life, I young enough to enjoy it, you’ll need to
t’s a New Year — time to re- have come to embrace • Lastly, live in the moment — whatever adopt, embrace and implement a residual
evaluate, improve and refine this gift that I have been you are doing give it 100% of your atten- mindset. Second, don’t get stopped in
our daily habits and actions blessed with every day. tion. Walking the dog, having tea with a your pursuit of residual income by con-
for success. Small, incremen- How do I do that? I start friend, working, talking to your children - fusing the value of cash and cashflow.
tal changes can reap big rewards my day with a prayer of be present, enjoy that moment. Your fam- Making the transition from accumulator
in terms of productivity and busi- gratitude naming the ily and friends will love you for this level to residual-incomer and creating wealth
ness opportunities. As a planner myself, I things that I am grateful for — my fam- of attention — very few people can truly can also take some time, but by maintaing
understand the significance of establish- ily, my warm cozy home, my friends, a do this. Be wary of electronics they can a focus on cashflow, the time it takes will
ing goals to create new outcomes. If we hot cup of tea, a great book, quiet time to be thieves of our time, and our spirit...the be nothing in the remote vicinity of the 40
can break those down into smaller more think, process or write, my warm SJREI things that renew you are not material — year traditional alternative.
manageable components we can achieve business community. they are love, companionship, friendship,
By appreciating these things, and so family, community, giving back. Matt Theriault is an author, entrepreneur
results more quickly.
many other seemingly trivial things I am Be brave, do whatever it takes to ac- and host of the fastest growing real estate
Here are some things to consider as
happier, more content and I realize that complish new results — Make 2012 your investing podcast on iTunes. Visit www.
you plan for another year:
what I appreciate grows more secure, and best year yet! EpicProfessionals.com for more infor-
becomes more defined in my life. Geraldine Barry is founder and president mation and to retrieve his free real estate
• If you don’t like things in your life you
Try it — I think you will like it too. of SJREI Association the premier educa- investing course How to Do Deals — No
have the power to change them by simply
tional and networking association for real Money Required.
changing yourself — things don’t change,
but you can! Any little modification can • There are people who drag us down estate investors in the Bay area. Under
make a difference — an introduction of — nay sayers if you will. Remove those Geraldine’s leadership SJREI has grown
something new, an exercise routine, a dai- people from your life. If they are your from a half-dozen investors to a vibrant Dream of Retiring Early?
T WITH CONFIDENCE
ly reading schedule, journaling, or simply family members, show them a new way three chapter organization with over 400
to be by mirroring for them your great investors attending monthly meetings. Join our Facebook
bonding with your family.
new attitude. My Dad shared with me In addition to leading SJREI, Geraldine Group and Mingle
• How you present yourself to the world (he ran a company, and had a family of is the frequent host of the radio program, with Successful
makes a difference, how you look, how six daughters, two sons and a wife!) that Going Beyond Real Estate, a regular Investors who Share
E D I AT E C A S H F LOW
you speak, how you interact with others, sometimes he survived by “psychologi-
who you interact with, what you read, cally absenting himself” from negative
guest on the nationally broadcasted NT-
DTV, publisher of award winning publica-
Your Financial Goals.
Share Tips • Post Deals
what you spend your time doing. What situations. tion REI Voice Magazine, and producer
D iscover the lowest-risk, highest-quality residential investment properties in the Request & Give Referrals
is your message to the world? Using sophisticated methodology,youbest investment properties areout,
I am here, How do do that? Tune them of the annual Bay Area Real Estate Expo.
country. the Post Links • Interact with
ready to take on a new challenge an experienced investor and rehabbed beautifully to situations,
carefully selected by and I capitulate, get away from secure the Geraldine resides in Silicon Valley, and is
Nearly 3,000 members!
want to change the best tenants. With competent property management, and instant cashdon’t propel
world in a positive people and attitudes that flow, your the proud mother of Colin and Claire, her
investment pays worry-free dividends from day one. Remember to be gentle as
way... it is your choice. you forward. two children. Contact Geraldine Barry JOIN & POST TO THE GROUP BY EMAILING:
• I have always been incredibly optimis- you work on this and have patience with at: sjrei.geraldine@gmail.com retireearlywithrealestate@groups.facebook.com
PROFILE OF YOUR FUTURE PORTFOLIO
INVEST WITH CONFIDENCE Flip or Rent Cash Generating
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Print • Online • Network
I M M E D I AT E C A S H F LOW
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iscover the lowest-risk, highest-quality residential investment properties in the
a free cash flow analysis.”
country. Using sophisticated methodology, the best investment properties are
carefully selected by an experienced• investor and rehabbed beautifully to secure the
www.realty411guide.com | Vol. 4 • No. 1 2011
best tenants. With competent property management, and instant cash flow, your
A Resource Guide for Investors
investment pays worry-free dividends from day one.
d receive one-year of free
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A Resource Guide
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4 • No. 1 • 2011
de.com | Vol.
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CashFlow Express • Page 5