re investment news feb 2016

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The RE Investment News is the monthly newsletter of Mid-America Association of Real Estate Investors.

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  • N E W S

    CHANGE is Easy

    from MPacktWealth

    N E W S L E T T E R F O RM I D - A M E R I C A A S S O C I A T I O N O FR E A L E S T A T E I N V E S T O R S

    February 2016

    What EveryPrivate Lendershould Knowabout Goals!

    After You Change the Way You See the World

    W E A L T H B U I L D I N G M Y T H S D I S P E L L E D

    3

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  • SUCCESS

    CHANGE IS EASY AFTERYOU CHANGE THE WAYYOU SEE THE WORLD

    by Chuck BaumanPhotos from Canva.com

    Any real change impliesthe breakup of the

    world as one has alwaysknown it, the loss of all

    that gave one anidentity, the end of

    safety.

    How many of us have tried to make asignificant change in our life and failed?Why is it that New Years resolutionsfail so often that even the mention ofthem now carries the connotation offailure? Yet, sometimes people do makethe change and it seems like it happensimmediately and effortlessly.what isthe difference and how can we use thatto get more of what we want?

    Science tells us that we developpathways in our brain when weconstantly reinforce a certain patternof thinking. The neural connections inthe brain grow and literally make moreconnections along certain pathways tomake the speed of that patterned way

    of thinking more efficient. I simply call itwalking a path. When you walk a certainpath in the woods long enough it gets worndown and it just becomes the easiest way toget through the woodsanywhere else youwalk requires walking through underbrushand breaking through low hanging limbswhereas staying on the path is easy andcomfortable. The brain works very much thesame.

    What this means is that we carry a view of theworld in our head that we are comfortablewith and any thoughts outside that viewrequire some work as we are now off thebeaten path of our normal way of thinking.

    Any real change implies the breakup of theworld as one has always known it, the loss ofall that gave one an identity, the end ofsafety. James Baldwin

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    Most of us have a very simple model of howbehavioral change works in our head as well. Itis a very simple model.

    We see the world a certain way, out of thatview flows what we DO, our of what we DOflows the results we GET, and out of the resultswe GET flows our view of the world. When wewant to GET different results than what wecurrently getting we work backward on themodel and try to DO something different andtherein lies our problem. It is impossible tofundamentally change what we are doingwithout changing the way we SEE theworld first. I will use a simple example toillustrate my point.

    Most people know they need to eat less salt intheir diet, they may have been told by theirdoctor to eat less salt and they may have evencommitted to eat less salt in their diet, they may

  • know how to play golf, it was because heneeded an objective opinion to give him immediate feedback on the things he wasdoing wrong that he was unaware of. Notall coaches are paid, you may be able tofind a mentor who will help you out of thekindness of their heartif not, paysomeone.

    GET IN A MASTERMIND ORACCOUNTABILITY GROUP. The otherthing that helps me is that I participate in anumber of mastermind and accountabilitygroups. There is something that happenswhen you surround yourself with goodpeople who have read your written visionand understand what you are trying toaccomplish and are willing to hold youaccountable to what you said you wanted.

    I didnt say change was easy, I said it waseasy after you change the way you see theworld. Sit down today and decide what youwant your life to look like and then takecharge of changing your view to align withwhat you want. If you dont plan your life itwill just get planned by those around youand sadly most of us take more timeplanning a wedding or a birthday partythan we do planning our lives. Do yourselfa favor, invest a few hours in planning yourlife and you may just reap a fulfilling lifethat is more joyous and peaceful than youcould ever I imagine. I know I have.

    Chuck Bauman has extensive experienceas an executive coach helping to developleaders and a documented backgroundwith helping to develop profitable smalland medium sized businesses. Hiscertifications include SPHR, CPIM, SSMBBand CQM just to name a few. His insightsare profound and often shock thoseunfamiliar with his skill with their accuracyand wisdom.

    SUCCESS FEBRUARY 2016

    structure our lives the way we want themto look. I refer to this process as Visioningand it is a process that involves definingwhat you want your life to look like andthen writing some affirmations that makeit sound like you have that life today andthen indoctrinating yourself in them untilthey become the comfortable thoughtpath in your brain. The process is quitedetailed and structured and not a simpleundertaking but it is certainly worth everyminute it takes to achieve it.

    The other thing that is a key to making thechange is to become hyper-aware of yourown negative self talk and learn to replaceit with affirmations of your choosing. Ihave them taped to my computer screen,printed and laminated and carry them inmy brief case and recorded in my ownvoice on a CD so I can listen to them whenI am driving.whatever it takes tointegrate them into my neural pathwaysuntil they become the easy path for mythoughts instead of the trash I have hadprogrammed in my head by society andothers for all those years.

    So if you are ready to learn how tohave the life you want by learning to walkthe path you want to walk there are threethings that I believe are absolutely criticalto making that work.

    HAVE A WRITTEN VISION. I am nottalking about an idea in your head abouthow you want your life to look or what youwant to own in five years. I am talkingabout a thought out considered plan(Think written business plan suitable tosubmit to the bank for funding) with asmuch detail as possible. It must be writtenas if it has already happened (presenttense) and in all positive terms (thinkaffirmations).

    FIND A COACH. I have three differentpeople that coach me on a full time regularbasis (two of which I pay) because I knowthat I simply cant be objective enough tosee all my blind spots. There is a reasonwhy people are willing to pay for someoneto coach thembecause its worth it if youare serious about having a great life. TigerWoods at the height of his career had agolf coach, it wasnt because he didnt

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    have been told by their doctor to eat lesssalt and they may have even committed toeat less salt a number of times and failed ormade little progress in the past. One daythey have a stroke or a heart attack and thenext day eliminating salt fromtheir diet becomes easy and immediate. I amsure you can think of a bunch of examples aswell.

    When an event changes your whole worldyou begin to see things differently.for alot of us that takes a life altering event forus to question our underlying views. What ifthere was a way to take control of the wayyou see the world and alter it when youwanted and harness the power offundamental change to get more of whatyou want routinely? Well, there is!

    Most of us limit our ability to change theway we see the world with what is referredto as negative self talk. Listen to theconversations around you sometime andyou will quickly hear someone walking thepath that prevents there realgrowth.oh, you dont want me to be incharge of that, follow through is one of myweakness.I wish I could get organized, Ijust cant get organized no matter how hardI tryeveryone in my family has aproblem with anger issues, itsjust something in the way we are made.They go on and on and if you listen carefullyyou will hear them everywhere you go, themost difficult place to learn to hear themis..when you say them to yourself.

    We say them so often and so effortlesslythat we dont even hear ourselves say them.The path is so worn and comfortable thatwe dont have to think about it, we just geton the path and walk and no concentrationis needed, we know the path well. Theneural path just gets more and moreefficient at producing the same thought, andthen we wonder why it is hard to changesomething that we really know we want tochange butseem incapable of making any real progress.

    Now that you understand that fundamentalchange that comes quickly and easily startsby changing the way you see theworldwalking a different paththen wecan take control of that process and beginto

    MAREI.org/Life

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    We all want a good life to behappy but our beliefs about whatit takes to make us happy are forthe most part just plain wrong.

    Economist have been obsessedwith this for a long time and thereis plenty of research around therelationship between money andwell-being. All of it says that therelationship we all believe iseither nonexistent or at best

    terribly weak.

    Economist have been obsessedwith this for a long time andthere is plenty of researcharound the relationshipbetween money and well-being. All of it says that therelationship we all believe iseither nonexistent or at bestterribly weak.

    3 Wealth BuildingMyths be Dispelled

    No matter your goals for creatingpassive income, one thing allinvestors have in common is theneed for smart strategy.Unfortunately, it's all too easy forindividuals to follow popular opinionor outdated advice when trying toreach their wealth-buildingobjectives.

    Contrary to what financial punditsand so-called experts may say, thereare some wealth-building myths thatneed to be dispelled.

    Myth 1: Saving is the best way tobuild wealth There's no doubt thatemploying smart saving strategiescan be beneficial to your finances.However, while saving will help youaccumulate money, it won't put it towork for you.

    Take high-interest savings accounts,for example. These vehicles can helpyou build up your savings for a rainyday, but they are highly unlikely toprovide you with the funds you needto secure a comfortable retirement,pay for your child's tuition, start yourown business or simply pay for thecosts of everyday life.

    And the wealth-building capabilitiesof standards savings accounts areeven worse. The U.S. Federal Reservereduced the federal funds interestrate through 2015 to between 0.00and 0.25 percent. Since mostfinancial institutions follow thisbenchmark, it means your ability tosave in an average account has likelybeen directly impacted.

    Your goal should be to incorporateintelligent saving habits into youroverall investment strategy. After all,the more money you make throughinvestment, the more you'll be ableto save. More importantly, instead ofjust watching your money slowlybuild in a bank account, an

    From the MPactWealth.com Blog

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  • investment allows you to take themoney you have and use it tocreate more money quickly.

    Myth 2: More risk means morereward

    Many investors mistakenlybelieve that taking on greater riskis worth it because it can result inhigher returns. However, thefigures simply don't support thisview.

    According to a report publishedby USA Today, the riskiestinvestment over the past 50 yearhas not been the mostprofitable.

    Meanwhile, an investmentstrategy like private lendingallows you to minimize risk byputting you in control of whereyour money goes and how. Youcan determine who to lend to andstructure the deal to reduce

    risk factors.

    And the payoff? InvestmentNews reported that privatelending can offer investorsdouble-digit returns, easilyeclipsing the returns offered bymany other investmentvehicles.

    In short, with the rightinvestment strategy, you canensure high returns while alsominimizing your financialexposure.

    Myth 3: Personal knowledgeisn't as important as aprofessional

    Many investors simply put theirmoney in the hands of financialplanners and hope for the best.They believe that their ownresearch and education isn't asimportant as working with aprofessional in the investment .

    industry. This is an ill-advisedstrategy for numerous reasons

    First, you'll often be putting yourtrust in someone you don't know.Many "financial planners" arenothing more than salespeople whomake a commission off of you.Finding a professional who has yourbest interests at heart can be fareasier said than done.

    Secondly, relying solely on a financialplanner means giving up control.Your money could be put intoaccounts and products you don'tunderstand, and if your broker iswrong or the market suddenly takesa dip, your money can disappear inthe blink of an eye.

    If you truly want to reach yourpassive income goals, it's up to youto educate yourself and obtain theproper training. This is the only wayto fully understand how creatingpassive income works and to putyour own plans into action. In theend, you are your greatest asset, sotake the time to learn about yourvarious options instead of relying ona stranger.

    MPactWealth is the experientiallearning company for peer-to-peerinvestment strategies, bouyed by thenation's largest network of privatelenders. They will be teaching atMAREI in February.

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  • Imagine being on a pro sportsteam that wins every game.

    This is kind of like being on theHarlem Globetrotters. Of their22,000 games theyve only lost 345times to the Washington Generals.Thats a 98.5% win percentage.

    Of course! You scoff. Thegenerals are supposed to lose.

    Maybe so

    But the fans love to watch theGlobetrotters great basketballskills. The producers of the eventmake money off of them. And theplayers enjoy prestige, fame andreally fat paychecks every singleday.

    Doubt the quality of the

    WealthyCode

    Maybe so

    But the fans love to watch theGlobetrotters great basketball skills.The producers of the event makemoney off of them. And the playersenjoy prestige, fame and really fatpaychecks every single day.

    Doubt the quality of the Globetrotterswins all you want. But there is a legitteam, with an equally impressivewinning percentage, in the financialworld. You can join it too! But firstyouve got to know what teams youwant no part of.

    The Financial League Lineup

    There are three teams in the financialleague lineup. We all have theopportunity to choose the team we areon.

    Team 1: Consumers. This team is theone that buys products and services.The cars, the houses, the latestgadgets, the iPhone 86.2++ (blackboardsize), etc. Theyre the ones spendingthe money.

    Team 2: Producers. This team is theone that makes the items that theconsumers buy. They are likewise theones that create jobs and hireconsumers to work for them.

    Team 3: Bankers. This is the team thatkeeps the entire league going. Theyfinance the consumers, enabling themto purchase their goods and services.They finance the producers, enablingthem to produce those goods andservices.

    The Banking Globetrotters

    The banking team is the HarlemGlobetrotters of this league. They areclearly the team with the greatestchance of winning.

    The consumers desperately need theirhelp to keep playing. Mortgage the

    Learn how to structure deals for Passive Incomelike the Top 1% of Investors - the Bankers

    W O R K S H O P

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    LEARNMORE

    MAREI.org/Wealth

    AreyouontheWrongFinancialTeamfromMPactWealthPhtosfromGraphicStock.com

  • mansion? Finance the Ferrari?Same with the producers. Theydesperately need the bankershelp. Make the machines? Financethe factories? Sell the stuff?

    Give them credit the bankers arethe home team.

    And whats more, the Banktrottersare terrific passers. They useborrowed money to lend to theother teams, tie up the other guyscollateral, and shift the risk to theborrowers. When the others cantpay back, they get the collateral.When the other teams pay back,with interest, they get even moremoney. And they use that moneyto spin into even more profits.

    But dont the Globetrotters losesometimes, too?

    Sure. It happens as often as theWashington Generals pick up a win.Rarely, very rarely, those on thebanking side, come up on thewrong end of a contest. Bankerscoming out on the losing end is sorare, its barely considerable.

    Yes, there is an occasionalforeclosure that doesnt resell, or abankruptcy where collateral cantbe fully recouped. But that sort ofthing is so rare as to be negligible. Even the mortgage meltdown afew years back wasnt enough todethrone 95% of the banksinvolved.

    As long as consumers need moneyand producers need money, thegames go on and the Banktrotterskeep on winning. And that streakwill go on and on.

    Lets go courtside

    Just watch this action: Well seeyou at the event.

    The producers decide to make a

    product that they believe theconsumers will love. They take aloan of $100K with 10% interestfrom the bankers to finance it.

    The consumers love the product,and buy it like crazy with theircredit cardsat a 13% credit cardinterest rate.

    The producers get their profitsfrom the consumer, and pay backtheir 100K loan with 10% interestto the bankers. The consumersget their desired product, pay theprices markup to the producersand the interest for the credit tothe bankers.

    The banker takes that moneyfrom both teams and lends againto more producers andconsumers. This means moremoney for the bankers.

    Cant you just hear them whistlingSweet Georgia Brown?

    Theres always room for onemore on the winning team

    Most people assume that youneed to be a Warren Buffet to jointhe Banktrotters team. Or startedstudying balance sheets fromyour crib. Not so. You dont haveto be born into wealth or have alifetime of hedge fund managingexperience.

    As a private lender, you can be onthe banking team. You dont haveto have a ton of money to getmoney to work for you. You needthe will and the smarts to spotyour dollar bills, always sprinting,and always earning moreslamdunks for you.

    As long as consumers need thebankers to finance their wants,and the producers need thebankers to finance theirproduction, the bankers alwayswin. And so will you.

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  • Imagine strolling down the cobbled streets of Paris, a caf au lait in onehand, a fresh chocolate croissant in the other. After losing yourself forhours in the Monet exhibit at the Louvre, youre looking forward totonights performance of The Barber of Seville, followed by a decadentfive-star dinner then hopping a train to Madrid in the morning.But wait, youre not actually in Paris

    Youre sitting at your desk and giving the stink-eye to your friendsvacation pictures on Facebook, for not planning your own elaborategetaway this year.

    Theres a big difference between dreaming about the Great EuropeanVacation and actually preparing to take the Great European Vacation.Theres research to do, plane tickets to buy, hotels to book. And you cantgo anywhere without a passport.

    So how do you make it all happen? Goals.

    Earning the passive, private lending income of your dreams isnt anydifferent than your magnificent trip. If you never set concrete goals for

    Setting Goalsyourself youll be forever sitting onthe sidelines with nothing but apretty box of notions.

    Whats the big difference betweena notion and a goal?

    A notion is something you would loveto doit sounds good in theory, kindof like starting a private lendingventure or learning to speak anotherlanguage. The benefits are all there.But what happens when you have toput some elbow grease into turningthat notion into cold hard cash.In contrast, a powerful goal is the firein your belly that drives you to makeone more phone call, even whenyour days been littered with notinterested. You want it so badly, youcan taste it. You can picture yourselfsucceeding so clearly even a strollthrough fire wouldnt distract you.You set a course and without anyexcuses put your rear in gear. Andfailure? The doors to all possible exitson your path have been barred shut.Goalsas opposed to notionsarewhat separate those in love with theidea of private lending, versus thosehustling to create a passive income.

    So what do successful private lendergoals look like?

    If youve never been to Paris, youwouldnt just hop on a plane and go,would you? Of course not. Youd talkto friends and relatives whove beenthere. Youd pour throughguidebooks and scour travel blogs toscope out all the hidden gems of theWestern European countryside. Youdalso make darn sure you knew whichParisian neighborhoods to steer clearof.Why wouldnt you want to do thesame thing when it comes to goalplanning for your private lendingbusiness? Dont be afraid to ask forhelp. Find a mentor. Join one of our

    What every private lender ought to know aboutsetting income boosting goals.

    G O A L S E T T I N G

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  • online communities. Theres anavalanche of resources to help youset, and crush, your passiveincome goals.

    Be realistic too.

    A goal to backpack through Europefor less than $50 in 24 hours isntan attainable goal. In the samevein, you should avoid privatelending goals that are too vague:Get more OPM or Find moreborrowers.

    Thats why you want to getS.M.A.R.T. about your goals

    Being S.M.A.R.T means establishingspecific, measurable, achievable,realistic, and time sensitive goals.What kinds of tasks will help youget more OPM? How manyborrowers can you realisticallyhope to secure in your first year ofprivate lending? Studies haveshown that specific and ambitiousgoals lead to a higher level ofprofessional performance.You want a healthy mix ofmarathon and sprint length goals.

    A brain surgeon did not becomean expert on neurology overnight.Little victories provideencouragement and motivationto press onward. Building yourprivate lending portfolio willrequire energy and focus. Yourlist of goals will help youtenaciously keep on track.

    But tenacity isnt one of mystrong suits

    One of the things we teach atMpact Wealth, is that you donthave to be a super salesman tobe successful. But you do have toknow why you want a passiveincome badly enough to slogthrough the muck of your fearsand doubts to get it.Accountability does wonders formaking sure you build a futureyou actually want to live in. Even iftenacity isnt an issue for you,finding a mentor or community ofother private lenders is highlyrecommended. Together you canapplaud each others successesand encourage one another whenthinking of tossing in the towel.

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    Learn to love setting and hittingyour goals, and success will showup in spades

    Unless you are content to spend lifein the passengers seat, watching allthe other private lending rock starswhiz by in their new, snazzyEuropean sportscars, youve got tostop dreaming and start planning.And then you have to roll up yoursleeves and get to work. No ifs,ands, or buts about it.

    Simply making a list doesnt cut ityou have to put in the time andenergy to see these goals realized.Dont be afraid to look to others inyour peer network for support andencouragement, and always giveyourself grace when you fall. If yourgoals are meaningful enough, youwont stay down for long.

    Article is from MPact Wealth, thepeople who bring you the WealthyCode Workshop February 20th &21st.

    Photo is from GraphicStock.com

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