How (not to) to retire well beginning when you’re 20-35 years old!

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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If you are like the average Canadian I have something extremely important you need to know: You don’t really want to retire with a lot of money regardless of what you think.

Now, this may sound harsh, but it's true. Today's post will focus on priorities and my hope is that, over time, your retirement will become a higher priority than it currently is.

The are very few people reading this post who will fall into a different category; those who truly desire to retire well in every way (not simply with money, but also strong relationships with family and friends, feeling healthy and strong, and a leader in your field). For the second group... I would recommend not even reading this post because you're well beyond it and you will simply read what you've already known for quite some time.

How can you work to quickly destroy your dreams of retiring well? I'll focus in this post to change your mind, even if just a little bit, in order to provide you with something better now and in the future.

7 ways to quickly ruin your retirement at a young age:

1. Finance a new car

The reason this is a killer is that you take on terrible debt on a depreciating asset that keeps you stuck for years and addicted to ‘new stuff’. Owning a car costs way more than simply the monthly instalments and gas. Insurance and loss of value (both of which cost even more if it is new vehicle), wear and tear, winter tires, car washes, and many other small expenses that creep up cost a significant amount on a monthly basis. The fact is that a vehicle is always much more expensive than the advertised payments and drain your bank account each and every month.

Solutions?

Buy a less expensive used vehicle with cash. Don’t have enough cash? Don’t buy it.
Move closer to work and walk, ride a bike, or take public transit to work until you have enough cash to purchase a vehicle.

2. Rent OR purchase a home to live in by yourself or with only your immediate family

A mortgage is never an investment. At best it is a savings plan. When young it is best maximize your ability to invest rather than get stuck in a place with a large family. If you disagree with whether or not a house you live in is an investment, simply take time to read authors who specialize in investing in real estate. Robert Kiyosaki’s rule of thumb is: anything that costs you money each month is a liability and anything that puts money into your pocket each month is an investment. In other words… mortgage, taxes, insurance, maintenance, etc. all take money out of your pocket each month you own a property you live in.

Solutions?

Rent a property making sure you can sublet to roommates. This allows you to break even or even make money while learning to manage tenants
Purchase a duplex and rent out the other unit. Again, you can come close to breaking even and, when you are ready and have enough money to do so, you can keep the property as a full rental and move into another duplex. If you play your cards right and focus on property investments you can even eventually move into 4-plex, then an 8-plex, then possibly a 12-24 unit building. If you could do this (it isn’t actually too difficult if you know what you are doing) before you are 30, you can now marry, have kids, purchase your own property to live with just your family and the multi-unit property will pay you an ever-increasing amount each and every month for the rest of your life!

3. A financed degree

I could go on and on about this. I myself have a master’s degree in the field of psychology and love education, but borrowing money to do so is a terrible idea for most people. One of my degrees I paid for in cash and another with debt and I would never pay for a degree with debt again! The major reason not to finance a degree? You are spending borrowed money to not work for up to 4 years of your life (which is lost income of a 4 straight years!) in order to get a job that may not pay much more than the job you could currently gain with a few thousand dollars spent on informal education.

Solutions?

Work full time at whatever job you can currently get and use the next 4 years of your evenings to learn the skills you need to develop a successful business. This is well worth your time. During this period of time I highly advise you to hire a mentor/coach who will help you fast track toward success. Even an expensive mentor typically doesn’t cost more than around $10,000 as of this writing (though it can cost a lot more) and is often less expensive. There are less expensive options as well such as working for a person you desire to learn from for free in order to learn on the job. This is a win-win scenario because you will be learning from a master int he field and the only cost is your time. Sometimes you can even develop a relationship with this person and do business deals with them in the future.

4. Travel (because we've all heard it will be difficult later on in life)

The question is: Do you really do the best travelling when you are young? Would you not rather travel with your family because you have the money to do so? I have travelled straight out of high school and am currently planning a year-long trip to France with my family… Guess which of the two will be best remembered later in life?

Solutions?

Work hard when you are young so that when you have a family you can take more time off and do the things you want to do. Let’s be honest… If you really want something you will do what is needed to get it. If travelling is a top priority for you I’m positive it will happen. Practice some delayed gratification rather than spending $3,000-5,000 each year wasted in a week or two that really does not add a lot of value to your life and, instead, take $50,000-100,000 later on to create memories with your family that matter while educating them in cultures and languages around the world.

5. Work like a dog for your current company

This will kill you physically but, more importantly, it will kill your spirit. Do what you are paid for and work hard, but realize that life in the workplace for any company is tenuous at times and carries it's own risk. I have worked at a government job and can assure you that even those jobs aren’t as secure as every believes.

Solutions?

Develop a business on the side or invest with someone who does. When it is making enough money to quit your 9-5, you can then realize a completely different freedom than you have ever had with a J.O.B.
Invest in yourself; your own education and ability to do whatever you want.

6. Keep doing what others around you are doing and what is advertised daily to convince you it is the best way.

If you have doubts about whether ‘the heard understands how to live well financially’ simply Google 2008, 2009, 2010, or 2011 and read all you want about how well the largest banks in Canada and the US of A's bank's protect their assets and make safe decisions. The 'best' banks took advantage of average people (people who dream of mutual funds and stocks because that is what the banks advertise) in order to line their own pockets.

Solutions?

At the expense of sounding repetitive I will again recommend that you educate yourself. Hire mentors/coaches, spend some free time learning instead of watching hockey or the latest show that doesn’t matter and grow into the person you need to be to manage your money better than others around you can manage theirs.
If you honestly don’t have the desire to manage your own money you need to hire someone to do so. The best way to do this, in my opinion, is to enter into a joint venture partnership where your partner only makes money if you do. An example is that you put up the cash for an investment property and your partner finds and manages the property (only if they have a proven track record and this matters to them). This way they only make money if you make money and they will work harder and better for you and themselves.

7. Negative friends or, even worse, investing in a negative partner by getting into a long term intimate relationship without your eyes wide open.

If you are living every day with a negative person who does not hope in the future or has so much fear than s/he cannot allow you to pursue your financial dreams… this won’t end up well.

Solutions?

a. The simple solution here is to simply take your time. The world doesn’t end for anyone if you don’t have a serious relationship at the ripe old age of 25! Statistics I’ve read state that the wealthiest people are generally those who get into a long term relationship a little later (at least after the age of 30), have already set up their business, and then never separate from their partner. People with multiple relationship endings often find difficulty finding wealth in life (there are always a few exceptions).

Summary

Why sacrifice the enjoyment of now in order to work for your future? Because while our world typically sacrifices a lot for small thrills, deeper satisfaction from life ALWAYS helps more in managing the day to day if you believe in what you are doing... We come to another problem: What if you don't believe what you need to in order to feel deeply satisfied right now? That's another post (or many actually). Stay tuned!



Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html

WOULD YOU RATHER BE RICH OR WEALTHY?

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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What's The Difference?

If you are rich it means you have a lot of cash coming into your hands. Typically the rich are those who have high paying jobs. Rich people also typically spend about as much as they earn, though not all of them. I have worked with and know people who earn about $250,000, after taxes, each year and spend at least that much. Actually, it isn't uncommon for people to make a lot and spend a lot, typically on liabilities.

If you are wealthy it means you have a lot of assets that actually are assets. Remember from my early posts that an asset, I agree with Robert Kiyosaki, is something you own that puts money into your pocket each month (cash flowing investment properties or business are the best examples) and a liability is something that takes money out of your pocket each month (vehicles, your own home, and material possessions that you may be able to resell, but do not cash flow or grow in a controlled or expected way).

Here's the thing... Wealthy people are often rich, but rich people are seldom wealthy. Think about the people around you; it doesn't matter whether they are athletes, dual income families where both adults have decent paying jobs, doctors, lawyers, dentists, wall street brokers, etc. These people look like they have the world by the tail and yet often are struggling financially in many ways to keep up the facade. These 'rich' people tend to drive the newest BMW or Mercedes and live in a very nice area of town. They dress well and go on lots of holidays, and yet they often are people who experience bankruptcy or, at the very least, have to work like dogs to make make enough in their 50s and 60s in order to retire in a way that keeps up the lifestyle.

Now think about some of the people you know who tend not to drive the newest vehicles or live in the newest houses yet hold a bunch of real estate investment properties or own a few franchises or even have worked a farm to pay off the debt they needed to purchase the land. This second group of people don't look like they have a ton of money and yet they typically enjoy longer intimate relationships with their partner, are far more rested when they take a day off and, when they choose to retire, live a comfortable life no matter how long they live. In my experience these people tend to live even better in retirement than they ever did during their working years. Many of them retire in the early 50s and spend a ton of time with their grandchildren. If you've ever read "The Millionaire Next Door" you will know exactly what I am talking about. Good research shows that those who have a lot later in life and live well are those who did not look rich for a lot of their lifetime.

So.... Back to The Question

I would much rather be wealthy than rich. I would much rather make certain sacrifices for the next 10 years in order to live like very few others do later in life. Most of the people I know tell their children to have a lot of fun in their late teens and early twenties because 'they won't get a chance later in life'. I completely disagree. I'm hoping to teach my children to work hard and make sacrifices early so that they can retire wealthy when they are 30 and enjoy marriage and kids and travel and giving to others and figuring out deeper purposes in life for the last 50 years of life. I believe we often have it backward and the statement that people won't get a chance to travel and enjoy life later on shows that many people around me do not believe they have a chance at wealth. With this mindset it makes sense to enjoy life as much as possible and as early as possible with very little focus on the future.

A Challenge

Here's my challenge to you. First you need to ask yourself what you want in life. Do you want a midlife crisis from working hard but without a true purpose in life? If so, pay no attention to posts like this (actually, if that's what you want you have already probably stopped reading). If you want more in life and you want to life like very few others live, then you need to begin asking yourself another question: What am I willing to sacrifice now in order to live well later on? It is a worthwhile investment to spend weeks or even months figuring out the answer to that question and to begin putting a plan of action in place.





Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html

MINDSET: WHAT DO YOU BELIEVE ABOUT YOURSELF? PART II

By: Mark Frentz
www.akerahomes.com
mfrentz@akerahomes.com

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Part 2: Self-Image

In my previous post on belief about self I focused on the basic idea that what we talk about has a strong influence on how we feel about people, jobs, and situations. In this post I'm hoping to develop an idea that is more difficult to understand. To get more out of this concept and understand more completely you can purchase the book "Psycho-cybernetics" by Maxwell Maltz. It is a classic that is under-appreciated in what it teaches. 

I recently heard a story about a person who asked Bob Proctor what the one thing he would most desire to pass on to the next generation. Bob said something along the lines of: give every effort in life to protect your self image. That's it, and from a man who has accomplished quite a bit in life and understands motivation and success on a greater level than any average person does. 

"Self image is so important. The way we see ourselves determines how we interact with others and, eventually, what we realize in life."  -Maxwell Maltz-

Each person typically has 2 images. One is an image we present to the world and hope others will see, a second is the how we see ourselves. A good question to ask yourself is: how do I view myself and is it any different than what I hope others will see? If the answer is that you present someone else to others, it most likely means you struggle with your own self-image. Now, I'm not saying this is good or bad or right vs. wrong. All I'm stating in this post is that it is helpful to understand this all better so that you can begin to realize more out of life than you may be experiencing right now. If you are experience shame when you see yourself you will not reach the same level in any areas of life (fulfillment in relationships, material wealth, success in a sport or activity/hobby that you enjoy, etc.).

The Secret

How you think affects your emotional state and outlook on life. It also affects what you get out of life. If you have watched the movie "The Secret" or read the book you could get the idea that there is a simple law to life and that if you simply think about something, you will receive it. While I'm not a hater of The Secret, I don't believe it portrays an understanding of life that is accurate. I don't believe there is a magical way to get everything you want out of life and I believe the movie suggests this magic. Here is how I believe what you focus on and think about affects you; how I believe the law of attraction works. 

Are you most likely to talk to a person on the bus or street that scowls at you when your eyes meet, or gives you a warm smile and asks "Isn't it beautiful outside right now?" Are you most likely to invest with someone who is upbeat and asks questions about you, or a person who simply talks about a product and never invests or even knows what you need? I know someone who is brilliant at her job and truly a genius in what she does, but she is extremely negative. She wonders, at times, why she isn't getting out of life what she wants and my simple explanation is that while I admire and respect her for the hard work she has put into her chosen field and believe she is excellent at much of her work, I typically don't want to spend too much time with her because I don't feel as good afterward. I don't think other people do either. It's pretty simple really.

I think the key to the law of attraction is two-fold. One part of it is that if you present yourself to others in a certain way, you are more likely to find people respond in a certain way back more of the time. The other part is that if you want to present yourself to others in a certain way, it will have to be genuine to get the best results and to be genuine you will need to actually think in a different way and have a different outlook on life. There is a third element to this, but it applies to more of life than simply the happy things we want out of it: confirmation bias. Confirmation bias basically means that we notice in life what we are focusing on. I'll give two quick examples:

1. If you are looking to purchase a certain make and model of a vehicle isn't it amazing that, all of a sudden, you start noticing that vehicle everywhere on the road... It almost seems as though every third vehicle is now the one you are thinking of buying.

2. You read a fortune cookie or read your horoscope and you begin to realize that it was extremely accurate in its prediction.





What is actually happening here is not that everyone purchased the same vehicle you are looking at purchasing last night and are now all driving them or that the fortune cookie has any basis in reality (sorry for those who love your astrology, but I don't believe there is any real accuracy to it).

While I could go on about the law of attraction at some length, for this post I simply want to present the idea. I sincerely believe that when a person changes the way they think about themselves they will begin presenting themselves in a very different way to others and they will begin realizing different results from what they are doing.

So What?

I had a professor who, after teaching us something about history or anything else would yell: SO WHAT?! What he meant was: information is important, but it is much more important to know what to do with that information. Here is a way you can begin to work on your own self image. This is simply a way to begin moving in the right direction and not the be all end all of everything you can do. Again, I'd highly recommend Maltz' "Psycho-cybernetics". It honestly is a classic.

1. Your subconscious mind is very much like a computer or guidance system in many ways. It will begin influencing you to go in the direction that is suggested by what you put into it. If you put in a lot of television you will be motivated to buy stuff and drink cheap beer. If you consistently put in statements like: you don't need money to be happy, or I'm not very creative, or there's something wrong with me... you will begin moving toward not having money, doing nothing creative, or consistently making poor judgement calls on anything in life. If, on the other hand, you begin to put in your head things that will motivate you toward the things you want: Money allows me to help myself AND others, or I'm learning new things and skills all the time, or I am becoming someone I'm proud of... you will realize the exact opposite.

I'll leave you with a final statement for today's post... It's already getting longer than usual. I think these last words are far better than anything I would come up with myself (even if I forget where I got the quote... probably Bob Proctor).

"Your results are a direct reflection of your image"



Here's to your future of risk-averse investing!

If you would like to learn more about investing in real estate please contact me at the email address listed at the beginning of this article or go to my website at: www.akerahomes.com/investing-in-real-estate.html