November 1996 The dictionary defines money as: ‘anything that serves as a common medium of exchange, a store of value, or as a means for the payment of debts or services rendered’. Try to imagine a world in which money had not been invented. How would trade or businesses be able to operate? What would be the common measure of value and method of accounting between people with different needs? Without money, we’d be back in the dark ages bartering for survival.
October 1996 About 45 years ago, with no prior training or experience, my widowed mother was able to support herself by managing rentals for a well to do local investor. It may be hard for today’s managers to believe that back then most people could earn enough to support themselves. Most paid their bills, including rent, promptly, with checks that cleared the first time through. Most formed stable households. Most could provide good credit and personal references. Most stayed the entire term of the rental contract. Most were able to pay deposits plus the last month’s rent. Would you believe much of the above applies today!
September 1996 Once upon a time I worked in an assembly plant producing circuit boards under contract with the government. To be able to price contract bids competitively, we had to figure out how many of which parts went into each sub-assembly and how many sub-assemblies it took to make the final product. A GZNTO chart explodes the entire product into each of its parts down to the very last component and depicts exactly how many of each goes into a widget, then how many widgets goes into a whatsit, and how many whatsits into the next assembly, etc., etc. Thus, GZNTO stands for ‘goes into’.
August 1996 If you recall, that question is associated with the fable of the three little pigs. They were jumping around singing it just before the wolf huffed, and puffed, and reduced the real estate portfolios of two of the little pigs to nil. As with all fables, there’s a lesson to be gleaned here for those interested in protecting their assets: (a) Don’t go around tempting fate and assorted predators when you’ve got something to lose. (b) Consider structuring your assets in such a way as to protect and preserve them prior to the wolf’s arrival.
July 1996 I get asked that question all the time. Turn it around. Suppose you were a young person just entering the adult labor force. What decisions would you make differently about what you did to earn a living or to how you invested your time and money? Looked at from another angle, what advice would you give your kids, if they were in the same position? We’re facing a brave new world with shifting values and economic tides. How can someone become an economic ‘winner’ just starting out in these unsettled times? To begin with, it helps for a person to write down what he/she might want to accomplish in terms of a field of endeavor and desired income.
June 1996 When I was a kid, the above question, a hold-over from the ‘30s depression, was written on one of my paper route customer’s walls. Would the slogan apply to you today? Do you find yourself mystified by the fact that, despite all your education gleaned from seminars, books, tapes you’ve ingested; and techniques you’ve mastered for discounting mortgages or negotiating shrewd purchases, or running a business, or investing, you still don’t seem to be getting ahead?
May 1996 In many parts of the country, vacancies are down and rents are rising. When business is good and asset values are being driven up by the low-interest rates, few people take the time to get their financial houses in order. Good solid cash flow, though possibly temporary, has a way of making the recipient real estate owner or manager feel confident in his/her ability to expand and to increase his/her holdings. It also makes it easier to refinance and to pull equity out of properties for use as down payments on more properties. Little thought is given to raising cash through equity sharing with investors in order to pay down risky debt.
April 1996 Each of us tends to define asset protection in terms of what would damage us most. At different stages of our financial lives, and as we grow older, we tend to see potential losses from different perspectives. Owners of low income, high density rental units might focus on tenant liability. Investors in mortgage notes or securities markets might worry about inflation’s effects upon adjusted earnings and portfolio values.
March 1996 The word on the street is that investors are beginning to return from the securities markets to real estate investment. Today, with after-tax market stock and bond yields dropping while the market climbs higher and higher, investors are becoming jittery. How much lighter can the stock market go? If it drops, how far will it drop? When?
February 1996 At about this time each year I like to take stock of my situation. Where am I in relation to the goals I set this time last year? Where do I want to be a year from today? What obstacles – especially financial – must I overcome? What will be my cash flow and capital resources? What claims will there be on the income that comes in? How will income and outgo match up? Am I going to have to raise additional money in order to overcome any imbalance? How/where can I do this? How much tax will I have to pay if I sell something to increase my income rather than to borrow what I need? If I borrow what I need, how much will it cost me? How will I pay it back? When? From what sources of cash? How could political or economic changes harm my plan?