Posted on February 3, 2010 @ 8:46 am - Written by BawldGuy
Early last month I wrote a piece about growing capital and creating solid cash flow, much of it sheltered, while experiencing no appreciation whatsoever. The bottom line was surprising to many. Their capital nearly quintupled — while simultaneously creating reliable retirement income. Regardless of whether the capital grows by a factor of four or five, or less, the result will be far more palatable than a 40% loss a few years before your scheduled retirement, which is what’s happened to so many good people.
BawldGuy Axiom: Figuring return on disappearing capital is oxymoronic. Treating appreciation as anything but a luxury is akin to walkin’ in an unmapped minefield. Read the rest of this entry »
Posted on January 28, 2010 @ 6:00 pm - Written by BawldGuy
Many aren’t aware of the new rule allowing conversion to a Roth IRA from a traditional IRA. — regardless of either your income tax filing status or your income. Income? Yeah, those makin’ over $100,000 annually used to be restricted from creating Roths. That rule has now been eliminated for good. It became effective the first of the year. You’ll be happy to learn it also allows you to spread the conversion’s tax hit over three years — AND — you’ll be able to skip 2010 totally. This makes it possible to split the tax between 2011 and 2012. This tax split is only available this year. As you might imagine, this bundle of carrots offered to taxpayers has generated a buncha IRA owners to dive into the conversion pool.
Here’re a few other facts you should know about converting to a Roth IRA Read the rest of this entry »
Posted on January 5, 2010 @ 5:19 pm - Written by BawldGuy
Lost a ton in your 401k at work? Most show about 35-45% losses from their peak. Man, that hurts just to write it. Here’s a way you can very safely and prudently build a basket of retirement income without bankin’ on any appreciation. I promise — you can do it.
Here’s an example, using real properties recently purchased by real clients. I’m gonna modify some of the numbers, but the modifications will not in any way make the bottom line better by an inch. (Worse in fact.)
What if you paid $245,000 apiece for four properties, each with an annual gross scheduled income of $28,800. The renters sign year long leases, and tend to stay a little longer than two years. We’ll set the operating expenses and vacancies at just under 40% — $10,950 a year. This results, when using currently available loans, in a negligible cash flow of less than $250 monthly — essentially a break even. Read the rest of this entry »
Posted on December 17, 2009 @ 4:11 pm - Written by BawldGuy
What matters most when implementing a Purposeful Plan is the thought process preceding it. That process involves the application and integration of several principles and concepts. The foundation though is the all encompassing drive for safe, reliable retirement income, preferably as sheltered from governmental taxation as possible, given the individual investor’s unique circumstances.
Many who like real estate as both a capital growth and cash flow vehicle, fail to clearly understand what roll both approaches play in their retirement. Possibly the #1 myth is that buying real estate for cash flow is always the way to go. It’s that attitude which has led many an investor to mediocre retirement income, and/or the forbearance of millions of dollars in net worth. It’s the latter you can blame for most of the disappointment when talking ’bout retirement income.
Maximizing your retirement income through real estate investing is all about timing. Read the rest of this entry »
Posted on December 15, 2009 @ 3:48 pm - Written by BawldGuy
When any particular resourse we have is finite in nature, trading it for something on our menu means, by definition, there’s something for which we didn’t trade. Though we chose ‘A’ over ‘B’, part of the cost of choosing ‘A’ was passin’ on ‘B’. Much of the time we learn what that exact cost was by way of hindsight. Best case scenario is that cost being, more or less, about what we thought in the first place.
This concept is called opportunity cost — the economic consequences of choosing one thing over another. Sometimes the cost isn’t just economic. For example, did you attend college? Did you have a wide choice? Years later, are you happy with the one you chose? Opportunity cost. Read the rest of this entry »
Posted on December 14, 2009 @ 4:18 pm - Written by BawldGuy
BawldGuy Axiom: The farmer who plows and plants in spring is never shocked to be harvesting bountiful crops in autumn. (How’s that for openin’ up a big ol’ can of Duh!?)
What comes before constructing a Purposeful Plan?
What comes before buying low and selling high?
What must come before anything you and I choose to do or accomplish?
What precedes a college diploma?
A decision must be made. Read the rest of this entry »
Posted on December 8, 2009 @ 5:10 pm - Written by BawldGuy
The cliché about partial knowledge often being more dangerous than downright ignorance has proven true in my professional experience. We humans seem to desire absolutes when we learn new things, especially when it comes to investing. Allow me to smash that fantasy once and for all. The old saw sayin’, “The only absolutes are death and taxes” is as real as a heart attach. Ironic, cuz the consequences of behaving as if things are narrowly defined in the Internal Revenue Code as infinitely incontrovertible truths of the universe, impervious to changing facts, are sometimes heart stopping.
Consider the following. I wrote about this earlier this year, but in the last several weeks, there have been similar requested consults. Sadly, a couple of them came to me too late for me to really help much. Pay attention, cuz this particular story gets played out every year across the country. Gettin’ a huge tax bill as a complete and shocking surprise is no fun — I know, I experienced it as a young man. It was gut wrenching to say the least.
This particular story has a pretty happy ending — not always the case, unfortunately. Earlier this year an agent called me out of the blue. I’d never met them, but they’d been reading my stuff here and over at BloodhoundBlog.They had just one question, which led to a boatload more, as usual. Read the rest of this entry »
Posted on December 3, 2009 @ 2:28 pm - Written by BawldGuy
Just when ya think ‘they’ can’t come up with any more ways to retard any chance of a credible real estate recovery, the goobers at Freddie Mac steps up to the plate. They’ve decided, no kiddin’, to require new investors to prove they have a couple years experience in property management — or no loan. Huh? What? Am I on Candid Camera? Is Ashton Kutcher filmin’ this? Will someone from Freddie Mac jump outa da shadows shoutin’ to real estate investors ‘You’ve been punked!’? Duh doesn’t even begin to cover this silly policy. Read the rest of this entry »