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Can You Find Your Number on Craigslist?
As I prepare for my entry in to MM201, I'm finding that my game plan is changing. My original play book was aimed at achieving an annual compound growth rate of 38%. However, in my previous post, I noted that recent increases in my net worth have reduced that requirement to just under 30% (29.28% to be exact).
That's great for a couple of reasons
1. My number (10 Million by 1/1/19) just became more achievable.
2. I can take a step down on the risk ladder and still have a reasonable shot at achieving my goal.
As Adrian pointed out in a post over at 7million7years.com about Masterson's Table
1. Real Estate and Stocks can produce an annual compound growth rate of 30%
2. Real Estate, Stocks and a small business can get you to 45% annually.
When I needed 38%, I was planning to take aim at the 45% growth engine to ensure I hit my goal Higher returns tend to require greater risk and I was going to assume some to get where I wanted to go. That extra risk is not necessary right now, so I'm going to put my business plans on hold and focus on REI and individual stocks.
In an attempt to jump start my progress (and to have a little fun) I placed two ads on Craigslist. Who knows, maybe I'll find my Number on Craigslist.
Wanted: Value Stocks for Long Term Investment
Seeking Value Stocks for investment opportunities in companies that possess consumer monopolies and a demonstrated history of strong financials. Each company's leadership must be passionate about the enterprise, care about its employees, provide value to it's customers and keep the best interest of shareholders in mind. Serious recommendations only, new risky start ups need not apply.
Wanted: Good Real Estate Cheap!
Seeking Good Real Estate Cheap. Must be move in ready in good school districts. Must be worthy of high quality tenants who want to fork over loads of cash in exchange for a roof over their head. Commercial real estate offerings will be considered on a case by case basis, but must come with tenants already in place.
I'm relieved that my growth rate doesn't force me to own a business right now to continue making scheduled progress toward my number. As much as I want to start my own business, I suffer from two hold backs. The first is I am not in a position to devote the time necessary to pursue any business plans because of my military commitment. The second is that like Ryan, I'm struggling with settling on "The Big Idea."
It's not that I don't want to lead my own company...quite the contrary. I really do. My life's purpose is to "Lead and Develop Leaders." Owning, running, and leading my own business would pack a double punch. Progress toward the number and an early fulfillment of my life's purpose.
I'm fortunate that in the military, I have a job that requires me to Lead and Develop Leaders...and I'm getting paid to do it at the same time.
To this point in our experiment we've been saying that we need to achieve our number so that we can retire and start living our life's purpose.
I'm finding myself in a unique situation where I'm nowhere near my number, yet I'm fulfilling and living my life's purpose already.
Does anyone see a problem with this? I do.
That's great for a couple of reasons
1. My number (10 Million by 1/1/19) just became more achievable.
2. I can take a step down on the risk ladder and still have a reasonable shot at achieving my goal.
As Adrian pointed out in a post over at 7million7years.com about Masterson's Table
1. Real Estate and Stocks can produce an annual compound growth rate of 30%
2. Real Estate, Stocks and a small business can get you to 45% annually.
When I needed 38%, I was planning to take aim at the 45% growth engine to ensure I hit my goal Higher returns tend to require greater risk and I was going to assume some to get where I wanted to go. That extra risk is not necessary right now, so I'm going to put my business plans on hold and focus on REI and individual stocks.
In an attempt to jump start my progress (and to have a little fun) I placed two ads on Craigslist. Who knows, maybe I'll find my Number on Craigslist.
Wanted: Value Stocks for Long Term Investment
Seeking Value Stocks for investment opportunities in companies that possess consumer monopolies and a demonstrated history of strong financials. Each company's leadership must be passionate about the enterprise, care about its employees, provide value to it's customers and keep the best interest of shareholders in mind. Serious recommendations only, new risky start ups need not apply.
Wanted: Good Real Estate Cheap!
Seeking Good Real Estate Cheap. Must be move in ready in good school districts. Must be worthy of high quality tenants who want to fork over loads of cash in exchange for a roof over their head. Commercial real estate offerings will be considered on a case by case basis, but must come with tenants already in place.
I'm relieved that my growth rate doesn't force me to own a business right now to continue making scheduled progress toward my number. As much as I want to start my own business, I suffer from two hold backs. The first is I am not in a position to devote the time necessary to pursue any business plans because of my military commitment. The second is that like Ryan, I'm struggling with settling on "The Big Idea."
It's not that I don't want to lead my own company...quite the contrary. I really do. My life's purpose is to "Lead and Develop Leaders." Owning, running, and leading my own business would pack a double punch. Progress toward the number and an early fulfillment of my life's purpose.
I'm fortunate that in the military, I have a job that requires me to Lead and Develop Leaders...and I'm getting paid to do it at the same time.
To this point in our experiment we've been saying that we need to achieve our number so that we can retire and start living our life's purpose.
I'm finding myself in a unique situation where I'm nowhere near my number, yet I'm fulfilling and living my life's purpose already.
Does anyone see a problem with this? I do.
Comment
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Comment by KC on June 21, 2009 at 2:52pm -
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Looks like great returns from residential - did I read this webpage wrong?
MarketWatch Residential REITs Index
KC
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Comment by KC on June 21, 2009 at 11:18am
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@Adrian. Yes I take your point.
My earlier comment may have been a bit "over the mark" - residential may well turn out to be a goldmine. Ignore the "nay-sayers" and doubters. (Which I'm sure you & Jeff did - right?)
Sorry, Jeff, I fully respect that you'll make your own judgements - I was just being excessively nervous about the prospect of losing money, which I recognise now was out of order.
So, Jeff, go for it! We're all with you on your journey to your Number. Good luck.
KC
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Comment by Adrian on June 21, 2009 at 2:40am -
@ Jeff - LOL; funnily enough, I think that Dave Lindhal (whose books I recommend to you) got his start by investing in Brockton (I think)!
@ KC - Nice idea about the REITs ... unfortunately, most invest in large commercial (some, of course, in residential ... but, large projects only, which usually means outer suburbs or inner-condo developments) which is just beginning its real crash. So, I think that Jeff is doing the right thing looking at individual residential RE opportunities, and perhaps gearing up to 'steal' a commercial property or two ... but, that's all timing-related, so Jeff will need to make his own judgments (albeit, with this Community's feedback/support).
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Comment by KC on June 18, 2009 at 10:39pm
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@Adrian and @Jeff. Is this a silly suggestion? If Jeff is not keen to enter the RE arena soon and wants to learn more about stocks, how about he spends some time studying RE-related stocks and monitors them and that sector's performance so he'll get the stock market training, and then he'll also be able to alert us all when the RE market is starting to pick up ?
Personally, from a global perspective, seeing the increasing number of boarded up shops and the rising unemployment here in the UK, I would expect current RE occupiers to be begging their landlords to reduce the rent just so they don't go bust and have to vacate.
I admit that probably means that you'll be able to find a lot of RE bargains in a while, but I think many current RE prices don't properly reflect how dire the current economic retraction is, and you can only get rents if people believe they can make money by occupying your property. Who feels like that at the moment?
Owning a place that becomes boarded-up, or remains boarded-up, could really hit your compound rate and be a net drain on your current net worth, but monitoring the sector via the appropriate stocks could give a clue as to when things are starting to turn around.
I wouldn't touch stocks or property yet - the recession has only just started. But in all these things it depends on your own personality - I'd rather keep cash safe at the moment, but risk-takers may have a completely different view.
KC
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Comment by Jeff on June 18, 2009 at 8:43pm -
@ Scott - I'm glad to see I'm not the only one who feels like they are already fulfilling their life purpose despite not being at Critical Mass (i.e. the Number). At first I questioned whether I had really determined my life purpose accurately or not.
Upon reflection, I have. I'm just not sure I really understand yet how hitting my number will change the way I fulfill that life purpose. It will certainly give me the freedom to very creative in how I fulfill it. I guess I have some continued soul searching to do.
@ Josh - thanks for the advice. A stop is a nice way to help take emotion out of the equation and help preserve a profit. That's especially nice when you wind up playing with the houses money.
Thanks for your opinion on the direction of the broader market. I need to get my act together and have some picks ready to go when it's game time.
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Comment by Josh on June 18, 2009 at 1:00pm - As for the stocks, I agree with Adrian. I think the market is correctly priced right now, not cheap. Wait for the pull back, and don't buy until the value your buying is irresistable. Then be patient. I wish I would have utilized a trailing stop in previous investments like LVS. Bought around $3.15 road it all the way down to $1.38 then panicked and sold at $4.75. decent profit, but I could have sold at 11+ if I was patient and maybe used a trailing stop to over ride my emotions. It was a valuable lesson.
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Comment by Scott on June 17, 2009 at 10:11pm -
Jeff, I know what you mean about already fulfilling your life's purpose somewhat. I mean I'm helping people with my knowledge, skills, talent and wisdom right now, just as stated in my purpose statement.
I think the important thing is to stay on course toward your number. My guess is there's something 'magical' about having a number that can fullfill the financial part of your life's purpose, while your actually physically, mentally and spiritually fullfilling it at the same time, but NOT for money! ;)
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Comment by Jeff on June 17, 2009 at 9:30pm
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Holy smokes! Somebody actually answered one of my Craigslist ads!
"I have a two unit in North Attleboro for $210k
and
a fully rented six unit in Brockton for $510k."
Maybe I can find part of my number on Craigslist. :-)
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Comment by Jeff on June 17, 2009 at 5:09pm
- Thanks for the links Adrian.
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Comment by Adrian on June 17, 2009 at 1:47am
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You probably DON'T need the LLC until you actually buy (you can even sign a letter of offer "or nominee/assignee" and put the property into the correct structure at closing). You DO need to find a good RE specialist attorney and Realtor (on the latter, find somebody who actually INVESTS in the same stuff that you want to) ...
I covered all of that in a post answering a similar question from Money Monk: http://7million7years.com/2008/12/12/commercial-re-first-steps/
As for some more background reading, in addition to the post I linked to in my first comment, try these:
http://7million7years.com/2008/12/22/anatomy-of-a-commercial-re-investment-part-1/
http://7million7years.com/2008/12/23/anatomy-of-a-commercial-re-investment-part-2/
http://7million7years.com/2009/01/05/anatomy-of-a-commercial-re-investment-part-3/
... now you're an expert ;)
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