Wealth Tips Eletter July 10, 2006

This eletter was sent out earlier today. If you want to subscribe to this eletter, just email your contact info to my assistant judy@getrichgetreal.com.

THanks, David

Subject: Wealth Tips and Announcements

Hi Everyone,

I know it’s been over two months since my last posts to the wealth blog and my last eletter on wealth. Please forgive the lag. As most of you know, now that I’ve sold my half of MFG I’ve been semi-retired for the last 6 months and I’ve been loving the extra freedom.

It’s been an incredible experience getting the chance to start fresh and focus my business life about what I’m most passionate about.

I hope you enjoy the wealth tips, some on real estate investing and some on wealth in general.

Also you’ll notice some important announcements and links in this eletter too.

Enjoy!

*********** Wealth Tips 1 of 2 ******************

Changing Your Buying Strategies as the Market Changes

Many of you live in areas of the country where the real estate markets have slowed down quite a bit. This will have a big impact on you as an investor and it’s critical that you adjust your buying strategies accordingly.

If your market has slowed then the biggest shift is for you to tighten up on your deal criteria. What used to be a hugely profitable deal two years ago may be only a marginal deal in today’s market conditions. Make sure you build your profit in right from the very start.

For those of you who buy for cash (your money, your bank’s money, or outside hard money lender’s money): make sure you get a much lower price than you might have settled for several years ago. You can’t be buying for 70-75% or higher of the as is value in a flat or declining market and be confident that you’ll make enough money to make the deal worth your while.

I suggest you tighten up your minimum margin to at MOST 65% of the as is value, and ideally lower than that.

For those of you who are buying on terms (lease options, subject to the existing financing, owner carry deals): make sure the property will cash flow with a cushion if you have some longer vacancies or a small decline in market rents of 5-10%. In a really soft rental market I want my MINIMUM cashflow cushion to be a spread of at least 10%, ideally 15% or more, between my total payment and the market rent. A down market is a GREAT time to pick up bargains that you can hold for 2-5 years until the market turns, then you get to ride up the appreciation curve on the other side.

The smaller the cashflow cushion you have, the more equity you need in the deal to build in security for yourself so that if worst comes to worse you can sell the property and exit from it fast.

I hope these reminders help spark you to take a fresh look at the deals you are willing to take in a buyer’s market.

Below I will be sharing the Five Core Financial Wealth Skills.

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Wealth Blog Update:

I will be posting WEEKLY updates to my wealth blog from here on out so make sure you go check it out. I’ll share strategies on wealth, investing tips and techniques, and other wealth insights. It’s located at www.GetRichGetReal.com

I’ll be sending out this eletter once or twice a month so make sure you add this address to your “safe senders” list or you might miss out on these important ideas.

Wealth Workshop for Charity!

On July 22-23^rd, 2006, Diane and I will be personally leading a 2 day wealth workshop to raise money for charity. Diane and I will be paying for all of the costs for the event so that 100% of your $500 ticket price goes straight to charity (The Justa Center, a homeless shelter that works with families to get them off the streets and back on their feet).

Below is a quick description. To register go to http://www.taxloopholes.com/index.php?s=stldetail&id=52

The workshop is laid out in six parts:

Part One: Upgrading Your Wealth Operating System™! Learn a powerful five-step process to literally reprogram your belief system about wealth, money, and financial abundance so that making money is easy and automatic. Never again will you unwittingly engage is self sabotaging wealth destroying behaviors because in this section of the workshop you’ll learn the key distinctions that will put you in charge of your own wealth program.

Part Two: Dreaming Big! In this section of the workshop we’ll guide you to be bold and create those big dreams in the seven important areas of your life to serve as the guiding star for all that you accomplish. Plus, you’ll learn how to tap into other people’s dreams to build a lasting joint venture to accomplish even more.

Part Three: Masterminding Your Way to Millions! You don’t need to do it all alone. You’ll discover how to create a highly functional mastermind group that will push you to even greater accomplishments. You’ll learn the five critical elements of a powerful mastermind to keep it operating at the highest possible level for breakthrough results.

Part Four: Building Level Three Wealth and Enjoy a Maui Lifestyle! It’s not enough to just make a lot of money. You need to build your wealth in such a way that it truly creates secure and thriving financial freedom. In this section you’ll learn the secret Maui Financial Freedom Formula™ and a breakthrough new system for measuring your real financial progress. You’ll learn why “income” is the worst predictor of financial success and how to powerfully build with the five pillars of wealth to create enduring financial freedom.

Part Five: Tapping Into Maui Giving to Create a Legacy that Lives On Beyond You! One of the hallmarks of a Maui Millionaire is the sustained giving that he creates throughout his lifetime.

Once you’ve learned these essential strategies and technologies to leverage from where you are to where you want to be, we have one more important area to focus on before you go home...

Part Six: Your Personal Financial Freedom Plan. Before you leave on Sunday night you’ll take with you a highly detailed, personally created, action plan to take you to financial freedom. This way when you get home you’ll hit the ground on Monday morning with a clearly laid out plan of exactly what you’ll need to do to turn the ideas from the workshop into dollars in your bank account.

************ Wealth Tip 2 of 2 *****************

The Five Core Financial Wealth Skills

One of the biggest roadblocks I see for wealth builders is not knowing where to start. Below is a list of the five most important financial skills you will need to cultivate to become wealthy.

Go down through this list and pick out on area you see that you need to develop and buy a book on this subject and begin reading it in the next 14 days. Don’t delay. Your financial freedom depends on you taking action!

Skill One: Learning how to invest for forced appreciation. Forced appreciation is when you buy an asset and increase it’s value by changing it or leveraging it in some way. For example, you can buy a foreclosure house at 50 cents on the dollar and massively increase it’s value by both fixing it up and also changing the circumstances of the owner. Or you can buy an apartment building that is in a prime location and convert it to condos. This change to a higher economic value is another example of forced appreciation.

Skill Two: Once you’ve accumulated a solid asset base, learning to invest for passive, residual cash flow. This was a hard lesson for me to learn. There is a big difference between investing for capital gains and investing for residual cash flow. To be financially free you need to create streams of income, not a nest egg. Your nest egg is only a resource from which to create income.

Skill Three: Fluency with the language of business—Balance sheets, Cash flow statements, and Profit and Loss Reports. I don’t love math myself, but for me to build and grow my wealth it was critical for me to learn a basic level of fluency in financial statements.

Skill Four: Fluency with the language of contracts. Every deal you ever do will be expressed in the legal language of a contract, so you better take the time to learn how to understand that language.

Skill Five: Upgrading your Wealth Operating System™. This is the sum total of your emotional associations and beliefs about money, wealth, and your ability to earn and enjoy it. This is such a key part of wealth that I just finished co-writing a book on this topic with Diane Kennedy called, The Maui Millionaires™. The book will be released in late October or early November of this year.

Okay, so there you have the skills laid out. I’ll make sure to post some more detailed ideas on how to best master them on my wealth blog and in future Wealth Tips eletters. The key for now is to highlight what they are for you.

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That’s it for this letter. Make sure to keep checking weekly on my wealth blog (www.GetRichGetReal.com) for more updates and ideas on creating wealth.

I hope your week is a GREAT one!

David Finkel

P.S. If you want to find out more about that two day wealth workshop where ALL the ticket price will go to charity just go to http://www.taxloopholes.com/index.php?s=stldetail&id=52 to register!

P.P.S. It’s nice to be back in the game since my extended vacation!