debt free

A Few Influential People I Need to Thank

November 27, 2013 by admin

I believe I’m fortunate to be living in this era. There are certain individuals that are in my life to one degree or another who have influenced my mindset which has resulted in my successes over the past 6 years. I’m going to gloss over the obligatory “Jesus” as that’s just a given in my life. Without Christ, I don’t believe I have much to stand on. So THANK YOU almighty creator of all things. Onward.

Let me first start with Michael Barrish. A strange individual who I “met” online in 2001 or thereabouts through a new medium called “blogging.” He was publishing under Moveable Type (a blogging platform) and his blog still looks the same as it did back then. There’s one thing I remember distinctly about him which involved his fingernails. I exchanged a few e-mails with him about it back then, but nothing came of our connection, other than my burgeoning passion for writing about every stupid thing I could think of. Thank you Michael Barrish. You started me on this online path.

Alas, that was 13 years ago, just before I purchased by first house, and, this is more about those who have influenced me in more recent years, which in my profession, are often measured by the real estate crash of the 2000’s.

Second on the list is a small pairing of quirky individuals who happen to have a pair of flip flops for a logo, and an Australian outlook on business (it’s not really a cultural outlook, but more of a geographical metaphor.) They do it the way everyone else says “you’re nuts” for doing it. These two characters and I (plus everyone else mentioned here) must have nailed all of the same branches on the tree of life when we fell out of the sky. I’m speaking of Kevin Kauffman and Fred Weaver of Group46:10, two “outback” thinkers who opened my eyes to the possibilities when the real estate market was pooping on the locals in Phoenix and all we could do was work through the notorious and now relatively elusive short sale. Without you two, I wouldn’t have “seen the light” and my first few years in real estate would have been a nightmare. So, to you, gentlemen, I offer a heartfelt THANK YOU.

Third on this list is a man who seems to figure out how to hack every skill in life to better himself in record time. At about the same time I became licensed in real estate, I “met” Tim Ferris through a client of mine via the 4 Hour Work Week, a New York Times best seller. He challenged my way of thinking and put a name to the very things that I was feeling about corporate life. As a result, I am a devout follower and will always hold what Tim writes in high regard, as he is willing to do the experimentation that many of us are not, to ultimately make all of our lives easier to work with. So, Tim Ferris, THANK YOU.

Fourth on this list, and by no means are these numbers in any particular order, is Seth Godin. I would argue Seth to be the most brilliant marketing mind on the planet, currently. Every time he writes on his blog, I’m informed, and enlightened, and his points are so concise, clear, and brief, that it’s as much a pleasure to read his posts as it is to glean wisdom from Harvey Mackay, who also tops this list as the fifth. Thank you Seth, you truly open my eyes to ways of thinking that should simply be…obvious.

Thank you Harvey. My father continually sends me newspaper clips in the mail despite the fact that I get your newsletter electronically. I thoroughly enjoy both you and Seth Godin, so THANK YOU!

Sixth on this list is Dave Ramsey, the Godfather of Wise Finance. Dave, I’ve met you in person and told you that once I paid my house off, I would ride my bike from Phoenix to Nashville to scream that I’m debt free. You’re an upstanding steward of Christ to whom I will say, “Isn’t this cool?” when we all get to the promised land. THANK YOU Dave Ramsey, for making my life better by enlightening my brain to the concept of stupid tax. As a result of your ministry, I and a large contingent of the congregation at my church at New Valley Church in Ahwatukhee are debt free.

Seventh on this list is a full on character that just GETS IT. Gary, you are the charisma that I draw from when I think I can’t do it. Your publications are excellent and I enjoy listening to you bitch about how stupid corporate America can be. Plus, naturally, you’re a handsome guy. You signed my copy of Crush It in Mesa a few years back and I’ll never forget seeing you in person and hearing your story. Keep it real, stay strong, and most importantly, THANK YOU!

And lastly, but not leastly, is a man who dominated the blogging scene in the Phoenix Real Estate Market and subsequently went on to be a part of a giant real estate website. That man has modeled technologies in the WordPress world that I have mimicked over and over again. His name is Jay Thompson, and I’m thankful that he’s alive, given the nature of the past year or so of his life. Congrats on your life-changes my friend, and a heart-felt THANK YOU!

So to all of you who have been at the forefront of business innovation, teaching, and general awesomeness, THANK YOU! I can’t wait to see what comes down the line in the future!

A Few Critical Money Tips for Real Estate Agents

October 16, 2013 by admin

When you’re self employed, YOU are responsible for more than you think. As an employee, which you may have been familiar with up until the point you decided to become self employed, your employer handled your taxes and social security for you.

Now that you’re self employed, you MUST have a simple roadmap to account for what you’ll owe the government simply for doing business.

Tip #1: Taxes and Crap Like That

When you get your first commission check, or your next commission check, for those of you who have not planned well, you will apply the following formula to the check. As an example, I’ll use a $100,000 sale with a co-broke of 3%, you being the buyer’s representative, without the broker’s cut considered in the calculations to make round numbers and .

On that $100,000 home, you earn a 3% co-broke, which is $3000.00. You dance your way to the bank, deposit the $3000.00 and have a jolly old time at happy hour with your clients and friends.

Did you really make $3000.00? No. You didn’t, because you MUST set aside a portion of that money for self employment tax and income mcc4tax. So, a basic rule of thumb for a new agent who isn’t sure what their tax bracket will be would be to put 30% of the gross income in a separate basic, plain jane savings account. So, on your $3000.00 check, you put $900.00 away for the piper…whom you’ll pay…quarterly. Isn’t that fun? Look, self employment tax is 15.3% as it is, and that’s on TOP of your tax bracket. So do yourself a favor. Plan according to what you think you’ll make. It’s nearly impossible to calculate exactly what you will owe, but you can get good at estimating, over time.

Tip #2: Plan for your annual dues on a monthly basis.

You have annual fees that you pay. You need to determine how much that annual fee costs you monthly. Add the sum of the monthly calculation of all of your annual dues together to determine what it costs you per month to have all of the compare motor trade insurace business privileges you have. If you can be billed monthly on anything, it’s easier to manage your monthly cash flow if you switch. If you cannot, you need to know what an annual fee looks like monthly. For example, Scottsdale Association of Realtors bills annually, but it can be expressed monthly. Figure out that number.

Then, using your business checking account, set up an online transfer that happens monthly for the amount you need. In the case of a single annual expense of $440.00, you would need to transfer roughly $37.00 per month from your business checking account (account used for business purchases) into a plain jane, separate account designated solely for annual dues expenses. When the bill comes for the annual expense, you will no longer feel like you’re being raped by the system because you will already have grown accustomed to 1/12th of the amount every month being moved into a designated account just for this purpose…and nothing more. You cannot borrow from your own account to pay for other crap. This money is considered spent already.

Every year when I get an annual bill, the money is already there because I move it there in little chunks so it doesn’t seem so bad (that includes things like my annual accountant fee for doing taxes.) And, every quarter, when I estimate that nasty tax bill, I have the money to cover it and if I’m short, it’s not by very much.

Be smart as an agent and a self-employed person and put money that you earn away or they’ll come get it from you, and that will suck.

Slave to the Lender

May 28, 2013 by admin

There’s a relational dynamic that many people neglect or aren’t even aware exists when they consider purchasing something with debt. It’s the master/slave dynamic. When you borrow money from someone, regardless of the time-frame you’ve agreed upon to re-pay that debt, the debt must be repaid, or there’s risk of bad things happening.

As a consumer, I have a say in what products or services are of value simply by choosing to do business with that company. In other words, I vote with my wallet. If I don’t agree with something a company does, I don’t have to use their services.

When you borrow money, something is usually used to secure the loan accompanied by an evaluation of your “debt score.” In the case of a house, the house itself becomes the security instrument that the lender uses to ensure they’ll get paid. That is why your rates can be so low. In the case of consumer credit cards or personal loans, since there’s usually nothing put up for security, your rates will be much higher as the lender shifts the risk to you. They make more money that way.

Collecting payments from you can be a costly process, depending on the type of loan you’ve taken. When you buy a house, your payments are typically handled by a company you never chose to do business with. In 2002, I purchased my home using a mortgage broker who promptly sold the note for my house to Countrywide Financial, who was acquired by Bank Of America who subsequently released the note to Greentree Servicing.

I had no say in the matter except that when I signed my closing docs, I gave consent to this phenomenon. Perhaps I could have retained more control over who I was choosing to do business with had I refused to these terms, but at the same time, perhaps I would not have closed on my first home.

Now, as a debtor, indebted to repay a loan serviced by a company (Greentree) with whom I would never choose to do business, I am stuck with their garbage services and practices until I either pay off the note, or they release the servicing responsibilities to yet another collection company.

This is one example of how borrowing money can put you into a situation whereby you have no control over who you choose to do business with. Thus, the borrower is slave to the lender.

Proverbs 22:7 – The rich rule over the poor and the borrower is slave to the lender.

How Do I Know if I’m a Millionaire?

February 26, 2013 by admin

Let’s first define the term Millionaire. The term millionaire defines someone who has a net worth of at least one million dollars. To understand this further, one needs to know how to calculate personal net worth. This is a simple calculation. Add up everything you owe (liabilities) and subtract it from the value of everything you own (assets) and you have your personal net worth.

If this number is $1 Million, then some would say you are a Millionaire.

Let’s say your net worth is $1 Million dollars based on the following. You own a home, for example, that would sell today for $4 Million and you only owe $3 Million on the mortgage. After it sells, you would have $1 Million left over. Many wouldn’t consider this being a true millionaire because you can’t get to the money without either selling your house, or borrowing against it.

You could have a net worth of $1 Million dollars and hardly have any cash in the bank. This is not what is meant by being a millionaire. Many also define being a millionaire as someone who is a “cash millionaire.”

A cash millionaire, after all debts and assets are calculated, has at least $1 Million in CASH in the bank that they could get to today. If you’re a cash millionaire, then you know that you’re really a millionaire.

Now, get out there, kill it, and drag it home.