Category Archives: Cash Flow

Streams of Income – Video

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Ever wondered if multiple income streams are good for anything other than, well, income? I have. :)

 

Transcript:  Hi, I’m Jeff Brown the “BalwdGuy”. What we’re going to address today is the idea of multiple streams of income. Everybody talks about them, but the examples we’re going to use today are going to be streams of income, that before you start getting them in retirement, you might be able to use them to enhance each other. Here’s an example: so you buy some real estate and it generates income and over time you may even get them free and clear of any loans. Meanwhile, back into the ranch, you’ve been investing in EIULs which gives, ultimately, retirement income that is a tax free. But what if the tax-free part of your EIUL income begins coming in say, five or ten years before you retire? You can start speeding up some free-and-clearing of your existing portfolio on the investment side. Or, you can begin reinvesting that tax-free income in the years preceding your retirement, because you don’t need it now, and all of a sudden, you’ve applied a turbo-charging effect to your ultimate retirement. Everything doesn’t have to been the same; it doesn’t have to be real estate. What you want you to keep in mind is that when you’re using multiple strategies and maybe even different kinds of assets — some not real estate — is that you want to do this on purpose, with an end goal in mind that is easily describable and understandable and that you know exactly what you’re setting out to do. When you’re doing this with real estate and you’re paying off loans, sometimes your other streams of income can be used this way to not only make it happen faster but allow you to make moves earlier than you had anticipated. This is Jeff Brown the “BawldGuy”, thanks for joining me and we’ll catch you next time.

Real Estate Investors — Is Your Timing Off?

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Those who’ve read me for awhile know how I view the subjects of cash flow and capital growth — I love ‘em both. I have a soft spot for steak tacos. Jamocha almond fudge ice cream is my definition of Heaven. Yet you don’t see me adding ice cream to my tacos. It’s about timing. I’ll eat my tacos first, relax a bit, then dive into the biggest bowl of jamocha almond fudge I can get away with. To the extent I ‘mix’ the two, both suffer.

Cash flow vs Capital growth

Principle #1: To the extent the investor structures a transaction to generate cash flow, capital growth is hindered.

For instance, if you have $50,000 to invest, (forget closing costs for now) you can buy one property for $100,000 with 50% down — OR — you can acquire two for 25% down apiece. Continue reading →

Success Formulas For Real Estate Investors — You Already Know Better, Right?

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When it comes to real estate investing for the long haul — read: retirement income — formulas are good for a few things.

Derisive laughter, missed opportunities, and severely retarded cash flow and/or net worth at retirement — or worse.

OK, so the one tellin’ us to buy low, sell high has stood the test of time. :) But even that one ignores too many factors to list here. I can’t resist listing at least one — timing. If we make a decades long story short, here’s the difference the lack of timing can make when a so-called formula is being adhered to slavishly.

Lady buys a San Diego duplex for around $30,000 in 1975. If she sold at the top of the latest bubble, around 2006, she easily netted a gross pre-tax profit over $500,000. Sweet, eh? She bought low, and boy, did she ever sell high. Half a million does sound sexy, doesn’t it? Thing is, timing tends to change things up a bit. If she’d sold/bought/exchanged when common freakin’ sense dictated, she’d of had — conservatively — far in excess of $2 million. Now what does that half a mil look to ya? Yesterday’s meatloaf, that’s what. For the most part, formulas share one thing in common: A built-in lack of flexibility. Continue reading →

Real Estate Investors: What’s The Shelf-Life Of The Current Perfect Storm?

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This will serve as a nudge for some, a reminder of the historic, rather, Historic times we’re in as it relates to real estate investment. Over 42 years, and this is the first time I’ve ever seen anything even approaching this convergence of positive ‘storms’.

  • Rising rents
  • Rising demand for residential rental property
  • Falling vacancy rates in the right regions
  • Rent/Price ratios harkening back to the 1950s.
  • The ability for ‘regular folk’ real estate investors to acquire property in blue chip locations.
  • The lowest investor interest rates since Truman was in office.
  • The ability to acquire property in faraway regions — safely.

This Perfect Storm has been raging for a couple years now. I’ve said it might have a 2-4 year life. I’m beginning to think four might be a bit much, but then again, my crystal ball is as reliable as yours, right? For all we know it could go on another several years. I don’t believe that, but it’s certainly possible.

BawldGuy TakeAway: Regardless of the shelf-life of this Perfect Storm, when it’s over, it’s OVER. I suspect this incredibly beneficial window might be akin to Halley’s Comet, which only shows up every three generations or so. We’ll see. Bottom line? If you have the ability to take advantage of it, what the heck could you possibly be waiting for? Years from now those who hesitated and lost will be telling epic stories of coulda woulda shoulda. Those who take advantage will spin tales of the only positive Perfect Storm in over half a century — and how it helped produce their magnificently abundant retirement.

Are you waiting for the right time to call me? Stop. Waiting. Get a hold of me at 619 889-7100. This Perfect Storm will be a huge factor in turbo charging your ultimate retirement income results. If you’d rather write me, simply go up top and click on the Contact BawldGuy button. Have a spectacular Memorial Day weekend.

The Practical Ins and Outs of Present and Future Values

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I’m often asked about the relative value of investment capital and/or cash flow. The question refers to the present and future value of money. A simple example would be the query:

If you know the yield on invested capital will be 10%, what’s better to have — $100,000 in 5 years — OR — $55,000 today?

I’ll leave the answer to you. :)

A reader made a comment. He asked if the income from an EIUL I’d quantified, was present or future value. The income was structured to begin 25 years from the inception of the policy.

My answer Continue reading →