Welcome to Chez Cliff!

After several days of nothing being done, I called the Handyman.  He still has work to do but he is stalling.

SFX:  Phone Rings
Handyman:  Hello Clifford.
Clifford:  Hello Handyman.  How are you?
Handyman:  I’m fine.  How are you?
Clifford:  I’m doing great.  Thanks for asking.
Handyman:  Good.  What can I do for you?
Clifford:  I’m calling to find out what you’re going to do today.

And with that, he went to work.  I didn’t want to ask him "when" but "what" he was going to do.  I think he got my point.  When I mentioned this to my mentor, he simply said "Cliff, it’s the people who understand the time value of money that get ahead."

He’s right.

First, Handyman is in process of getting the new kitchen window done.  I can’t believe I don’t have a good photo of the old kitchen window.  But this window is twice as long as the last window.

And with the removal of the back windows, you can’t even tell that they were there.

He does great work.  When he works.

Now it’s up to Wonder Woman.

All the work has been completed inside.  She’s now going to finish the plumbing and the electrical.  After that, the dry-wall goes up.

Photos to come  . . .

Someone made an observation the other day.  I communicate a lot with people from other countries.  I call these my "international friends".  One topic of curiosity:  How other countries view Americans.

The observation was that Americans in general seem to have an entrepreneurial spirit.  Moreso than in other countries.

This made me smile.

I tried to think of why this might be true.  It certainly wasn’t television that influenced me.  The television I watched as a small child consisted of "Scooby Doo" and "Sanford and Son".  Not hardly television for those wishing to become the next Bill Gates.

Then this article came across my desk and it hit me.  "Of course!  Monopoly!"

My education in Monopoly started with my knowledge of snow days.  In my little neighborhood, every kid would be sitting in front of their television set and just praying that "Vassar Public Schools" would be read aloud as being closed for the day.  Once those three magical words were spoken, the telephones would start ringing.  The biggest question on our minds:  What can we do with this glorious day?

Build a snowman?  Pffft!  Snowmen are for wimps.  No, we had to build tunnels and go sledding in the ditches.  Snowball fights?  Maybe.  Only if water was included to make them nice and hard.  If you didn’t have red welts on your face, you weren’t invited back for hot coco.  You had to earn that; battle scar.

Where was I?

Oh yeah, Monopoly.

After dressing down in front of the door, we would all pile up into our giant basement.
  In our wake, chunks of snow that landed on that day’s newspaper that my mom put down.  The fat man with the hat hit the floor and we all claimed our pieces.

"I get to be the car!"

"You’re always the car!  That’s not fair!"

"Here Peewee, you can be the shoe."

"Screw you Jimmy!  I hate the shoe!"

Immediately, five future real estate baron’s had their pieces and money assembled.  Let the dice roll!  Win a beauty contest?  Sign me up!  Get out of jail free?
  Who wants to give me $50 for it?

I tell you, I had the bankruptcy part down!  On more than one occasion, I mortgaged the property I had to pay that rent.  "Crap!  There’s a hotel?  I’m dead!!"

Every kid on my block had this board game.  I even remember this game coming out at our family Christmas events.  Nothing says "I love you" more than a salivating relative, asking you for $2,000 to stay in his 5 star hotel.

To this day, my dad still plays the Sega Genesis version of Monopoly.

Maybe it is a part of our culture?  Something that is engrained into our heads since the time when we were little.  It’s something that our parents knew.  Even our grandparents.

Of course these days, this is more my speed.

Why am I in real estate?

That is an excellent question.  I’m glad you asked.

I’ve been involved in numerous conversations with people who are stock market advocates.  To them, this market is the end all, be all of investment opportunity.

I don’t see it that way.

For those that have already read the Rich Dad book on this subject, this will be a repeat of that material.

Anyone who is considering getting into investing should consider strongly the word "leverage".  Leverage is a decisive, and strategic difference between investing in the stock market and the real estate market.

What do I mean by leverage?

It’s quite simple.

The author of the book makes this simple observation.  In the stock market, $10,000 buys you $10,000 worth of stock.  In the real estate market, $10,000 buys you $100,000 worth of real estate.  That is leverage.

With that in mind, a 10% increase in the stock value will make you $1,000.  I get this number because of the formula 1.10 x $10,000 = $11,000.  Congratulations, your ten thousand dollar investment got you $1,000.

In real estate, a 10% increase in property value will make you $10,000.  ($100,000 x 1.10 = $110,000).  You’ve essentially doubled your initial investment.

But with programs these days, this is even more crazy.  With these 30 year fixed, zero down programs, you don’t even have to have down payment to secure a sizable chunk of real estate.

It’s amazing that with $5,000 one can purchase a $300,000 property.  And if that goes up 10% in one year?  Pffft!

I have yet to see a stock market program where $5,000 can control $300,000 worth of stock.  Of course, my challenge still stands.  If someone can send me how this is possible I’ll gladly eat crow.

Of course, as with any investment vehicle, there is risk involved.  Risk is part of the game.  If you can’t stomach a drop in any market, then you’re better off not being in that market.  But you already are.  Odds are, if you’re reading this, you’re putting money into your 401k.  Whether you like it or not, you’re in the market.

And one more thing.  Unlike companies that can go bankrupt or just close their doors, real estate does not do that.  The percentage of the time where real estate loses all value, is confiscated is relatively small versus the percent of businesses that go out of business.

There’s one point about real estate that won’t change.  Demand.  With 1 million new customers every single year, an increasing population, and life expectancy on the rise, you have to ask yourself one question:

Where are all these people going to live?

Economics 101:  Supply and Demand.

Either the handyman read my blog or he became super motivated.

He has finished it all.  The framing, the drywall removal, the new window . . . all complete.

Now, it’s the Wonder Woman show . . .