- There needs to be incoming, additional currency that then is altered, this is important, to high ROI, return on speculation real estate.
- That’s what the currency goes into and then what that’s going to equal, that’s going to equal the affluence.
- Winters in the northern hemisphere you’re buried in snowfall
- As that happens it gives you more currency. As it gives you more currency, more real estate.
- Now you’ve got a snowball that’s getting even bigger.
- You have your RE that’s giving you even more coin and then you’ve got even more coin to buy more real estate.
- Your snowball’s get bigger. Now you’re getting even more as you get the idea and this right here, as they say in engineering, the positive feedback loop, is how it gets done.
- The actual snowball represents your wealth
- We’re going to unpack this and we’re going to do it with assistance from a classic board game, Monopoly. This board game was developed in 1903 by Elizabeth Magie. In detail it was announced The Landlord’s Game. Wasn’t even announced Monopoly until 1935 when Charles Darrow drew it to Parker Brothers and made a couple of adjustments to the original competition. Interestingly enough, they announced her Lizzie. She never made any coin from her own invention. It was Charles Darrow that made all those royalties.
Using This in Real Estate
You start off with some coin and then you also can deliver go to earn an extra two hundred dollars and there’s a got a couple of other ways to make a got a couple of bucks as well. Your goal is to buy these different belongings on the members of the commission and then hopefully over age, those belongings compensate you more coin which fetches in more coin and then you can then eventually beat all of your race by owning the most real estate and bankrupting everybody else. You’re starting off with currency, you’re buying high ROI real estate. Tell me clarify. This is not a game of mere luck as numerous parties think it is. In detail it is a game of strategy. You have to know which belongings have the highest ROI. Tell me give you a little secret. The railroads have a very high ROI. Your practicalities do.
From a mathematical standpoint your oranges and your reds are the absolute best.
Robert Kiyosaki Rich Dad Poor Dad
His original father, Richard Kimmey that he had a formula of four dark-green the homes and one red hotel. The way it works in Monopoly is if you get four residences on a property you then can sell up to put in a red hotel.
Richard Kimmey Formula
He applied the following formula right here, the original rich father did, to build his affluence but that may or may not sounds like a good notion because it may not be the highest return on speculation. It may not be the most important one ROI for each specific situation you’re dealing with.
The key here is that your cash is being altered in hard assets which have a high ROI in comparison to all the others. That way you’re slowly but surely building a whole lot of affluence. We’re going to go through all sections now, currency, ROI, and affluence.
is critical to making this formula work. If you’ve watched a lot of my other videos you might be saying, wait a time Phil you even have videos that talk about how to buy real estate without currency or credit.
- That’s true but often what these types of transaction structures are used for is for short term fund, which precedes me into how did I get this formula travelling when I get started homeless?
I did it by creating big hunks of cash by turning homes. I have a bunch of videos on this topic. I still do this today and I also mentor and set others. I call my apprentices and I divide profits with them. I’m turning homes with them as well. I create big chunks of cash with turning houses and then that’s lane more than what my overheads ever were and they are today. What happens is I’m able to take that cash and buy high-pitched ROI real estate. You don’t have to be a full time real estate investor for this formula to work at all.
What Richard Kimmey Did?
- He started a series of infantry surplus storages right after World War Two. That’s when there was a whole bunch of military quantities available.
- He took that fund and he bought real estate with it.
- Then he took all that real estate and he sold it and he built, an inn in Hilo, Hawaii on the large-hearted island of Hawaii and that was a gamble because most people visit Honolulu
- He discontinued the prices low-pitched enough to make it worthwhile
- Ended up creating a huge inn chain in Hawaii.
- It all started because he had, here’s the key, he had a business.
- That’s the main place to generate cash, is if you have a business.
- It doesn’t “ve got to be” real estate.
- It can be any business that’s productive.
What I’ve noticed about business in my business is this:
Business tends to be great for producing slews and lots of this but not always growing long term affluence. What’s hot today might be cold tomorrow.
Business can produce red-hot cash soon, in relative terms, versus the long term play-act that hard resources like real estate give you. If you are building a business right now or you want to be in business that could be a great lane to get this whole happening moving. The cash that gets thrown off from your business can then be shed into this affluence formula.
One other thing is if you’ve got a great profession. Many of you have a wonderful profession. Perhaps you went to institution for eight years and you now are representing great income. In those situations that’s another example of you’ve got the cash being thrown off. I can’t tell you the innumerable storeys of attorneys and doctors and corporate middle both managers and great auctions parties and those that are high income earners, taking the cash and throwing it into high-pitched ROI real estate. That right here is the firstly key. You’ve got to generate cash. Some parties produce their cash in real estate by simply being real estate agents.
There are top producing agents these days that are making a million dollars a year.
You’ve got to have something that is your overtaking go and collecting two hundred dollars.
High ROI real estate is the next part of this formula.
Monopoly does a great responsibility of demonstrating you this. Remember I talked about how boardwalk, how that property’s the most expensive but it actually has a very low ROI but then you have something like the railroads and the railroads have a really high-pitched ROI? It’s not always what’s the most beautiful. It’s not always what’s “the worlds largest” glamorous that produces the highest return on asset. I have a wonderful video called How to Turn a Little Into A lot. There’s a part one and a part two. It’s one of my favorite videos I’ve ever shot. I want you to click on it. I’m going to introduced a little thing right here so you have been able click on it.
CASH FLOW ROI
Sometimes you have been able gather of an amazing ROI deal that’s a conventional one but hardly ever. What happens is if you employer rendering cash then you master how to locate and design these high-pitched ROI real estate transactions and this is how you reach this affluence formula. Again, there are many different ways to gather this off but the key is you’ve got to get into deals with as low-pitched of a down payment as possible but as much of an upside, as much of a cash flow. That’s what I want to has pointed out. When I talk about ROI I’m talking about cash flow. If you set ten thousand dollars in how long does it take to get that ten thousand dollars back?
Let me give you speedy math. If you set ten thousand dollars in and you’ve got a hundred dollars a few months positive cash flow, that’s twelve hundred dollars a year. That’s twelve percentage. Not very good.I shoot for a minimum. My minimum is twenty-five percent cash on cash yield.
Then actually the yields get a lot big because as you will see from another video I’ve put together called How to Increase Your Net Value With Real Estate, I talk about the fact that real estate itself is the ideal investment. First we have the income I was just talking about. That’s the cash flow but that’s just the cash on cash yield.
Which means that you get a specter expenditure. It’s not coming out of your bank account but it’s an expenditure on the tax return and it increases the income which represents increases your tariff bill, but you still have the income in your bank account. It’s amazing.
You buy the property right you have instant equity. When you bought it you have instant affluence as soon as you bought it.
We don’t ever know when that’s going to happen. If world markets isn’t just in a ended receding sometimes you can have vast appreciation as world markets comes back up but if you buy it at the top of world markets you are not able to get the appreciation.
Creative investing, that’s when you can get the best leverage because you can potentially collect property without having to get a bank loan.
How to Improve Wealth
Real owned in and of itself is the ideal investment in my views and furthermore if you go with the high-pitched ROI version you’re that much better and putting that positive feedback loop-the-loop in your kindness over and over, constructs this snowball influence where you build your affluence.
How I’ve built it, like I described to you earlier, I caused all my additional cash by turning houses and then I grow that into the high-pitched ROI real estate and that’s what constructed my affluence. That’s what we teach others. That’s what we do in our apprentice program. We learn them how to is not simply generate additional cash from turning lives but how to find the best ROI real estate. Some of the person or persons that meet our program they just necessitate cash right now and lots of it. Some beings have the cash but they certainly want to do this right. Either practice that’s where we fit in. That’s how we help.
Exercising the Formula
When you exert this formula you are going to produce astonishing causes over meter but apparently it implies some big major items.
Number one, that you can produce that additional cash
Number two, you know how to identify and take down the high-pitched ROI real estate slews, but once you get there you’ve achieved that affluence.