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Why Timing the Market is a Bad Idea

Here are the headlines that I saw when I googled “stock market” today:

 

“Is a global recession led by a US Stock Market crash in the offing?”

“Dow slides as US stock market suffers worst week in two years”

“Chart analysts see bigger market pullback if interest rates continue to shoot higher”

 

These headlines are going to affect everyone differently.  Let me share with you how it affects me.  Normally, I would never read it.  But today,

I laugh at it.

It’s useless information.

Let me give you a little background on me.

I worked for Fidelity Investments as a stock broker while I was in college before I joined the military.  I’m an avid finance nerd and real estate investor.

I’ve studied the markets long enough to know that index funds are the smartest way to invest your money.  Trying to beat the market is pointless.

I also know that a lot of what you see in the financial media space is useless information.  They try to predict where the market is going.  When they get it wrong, they try to explain logically why they got it wrong, which ends up being the perfect definition of hindsight bias.

Hindsight bias, also known as the knew-it-all-along effect or creeping determinism, is the inclination, after an event has occurred, to see the event as having been predictable, despite there having been little or no objective basis for predicting it.

Financial magazines, newsletters, cable programs, videos, it’s all meant to capitalize on either fear or greed.  A few weeks ago, it was greed.  The markets were kicking ass.

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9 Debt Payoff Hacks that Work and 3 that Don’t

 

payoff debt pen

These are 9 debt payoff hacks that actually work.

I did some research before writing this post.  I’m always horrified whenever I realize the amount of advice at the top positions in google search results that is bad.  The subject of paying off debt is no exception to this rule.

More on that later.

Every blogger writes an obligatory post on how they cut corners to payoff debt.  This is my attempt at that.  This is an updated post.  Originally, this was my third blog post.  It’s now reformatted.

Another thing about this research I did.  The stuff that tends to hold a lot of the top positions is easy Band-Aid solutions to paying off debt that doesn’t involve actually solving your problem.

It’s usually a matter of taking out a new loan or opening up a new credit card to transfer debt from one location to another.  You might save money on interest, but you aren’t fixing your problem.

These are ways to payoff debt without earning any money.  All your doing is replacing old debt with new.

The debt is still there!

The debt payoff hacks I talk about actually work.  They involve lifestyle changes and changes in thinking that enable you to payoff the debt you owe.

Nothing else will work.

It’s just clickbait.

Any success I’ve had with paying off debt is 99% attributable to my wife. She is Chinese and grew up in Taiwan. She has no formal training in investments or finance. She has never read a personal finance book in her life. But she came from a family and, to a certain extent, a society that frowns on debt.

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payoff mortgage fast

5 Surefire Ways to Payoff Your Mortgage Fast (Video)

“So you want to payoff your mortgage faster?”

I wish I had read this before paying off my mortgage!

 

Some banks or other financial institutions offer a mortgage accelerator program.  It’s usually some type of program that helps you payoff your mortgage faster.  The deal is, they charge you for this.  It could be anywhere from a few hundred bucks to several thousands dollars.

Do not use these programs.  They are a total rip-off.  You can use any of the methods below to payoff your mortgage faster without spending a penny.

Paying off your mortgage faster is something most homeowners consider at some point.  There are practical and psychological reasons for doing so.  We’ll hit the pros and cons after discussing the 5 top strategies to payoff your mortgage fast.

Make sure that your loan doesn’t have a prepayment penalty built in.  They are uncommon, but out there.  Be sure you understand how much it will cost and if it makes sense to pay this fee.

By the way, when you get a loan, make sure there isn’t a prepayment penalty!

In my case, I bought a townhouse in 2003 in Alexandria, Virginia for $280,000.  I put 10% down, financed 10% of the loan at a 7% interest rate, and then rest was a mortgage at 5.5% on a 30-year fixed rate loan.

While reading Dave Ramsey’s Total Money Makeover book one day, I saw the section in there where he suggests paying off your mortgage after paying off debt and funding retirement accounts.

I thought, wow, that’s a crazy idea!

But the idea of paying it off intrigued me.  I liked the idea of having no debt!

I threw everything I could at that loan over the next six years and paid it off.

And I LOVE the feeling of it being gone.

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5 Secrets to Finding the Best Property Manager

 

I will give you my 5 secrets to finding the perfect rental property management company.

Maybe you think you can manage the property yourself?

Perhaps.

But if you use my tips to find an outstanding management company, they’ll save you more money than the fee you’re paying them.

Think about that.  You’ll do less work, but save more money.

The perfect rental property management company earns their management fee and more. They do things better than you could if you did it yourself.

They have more experience:

  • Finding tenants
  • Dealing with dead-beat tenants
  • Collecting late rent
  • Doing evictions
  • Finding fair prices and getting discounts from contractors
  • Knowing what repairs are necessary (and unnecessary) for rentals
  • Knowing which locations are best for rentals
  • Pricing rentals
  • And much, much more…

To reiterate, these companies end up being worth far more than their fees just through their contacts, expertise, and understanding of the rental market.

Again, this is only true if you find the right management company.  There are also plenty of bad ones that will cost more money and be as much work as doing it yourself.

That’s where following these tips come in!

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Should You Go to the Military Influencer Conference Next Year?

For the past two years, I’ve attended FINCON.  It’s a conference with about 2000+ attendees geared at financial media.  I’m an active duty airmen who has a small real estate blog, so Curtez Riggs suggested I attend the first Military Influencer Conference taking place at the same location as FINCON a few days before it begins.

Two for one!

It was hard to know how this new conference would turn out, being in it’s first year and all.  Lots of things were up in the air.

  • Would it have enough attendees?
  • Would it attract big enough talent? (speakers)
  • Big enough money? (sponsors)
  • Networking opportunities?
  • Well organized?

I’m happy to report, Hell yes on all fronts!!!

The conference was a massive success and everyone that attended had glowing reviews. Everything was amazing.   Here are some of the things that stuck out to me:

It started off with a keynote by Emily Cavness, CEO of Sword & Plough.  She came up with an idea for making bags and other things out of military surplus items just as she was coming into the army.  It’s became a massively successful business and her insights and story was amazing!

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Investor Profile of Rich on Money

Chad Carson of www.coachcarson.com did a profile piece of me on his website.

Chad has become a friend, and he is one of the best real estate bloggers out there.  He’s got something like 90 properties in a small college town.  He has reached financial independence, and is currently living in Ecuador with his wife and kids.

Read his piece on me at his website.

My Secret Weapon for Real Estate

I’m in D.C. for some leadership training.  I’m glad my organization gives us two weeks to focus on leadership before we take on a supervisory job.  It’s a great time for personal reflection.

In this training, we do stuff like take personality tests, find out what our leadership style is, and discuss how to deal with common personnel challenges.

We also examine what our values are.

I was surprised how different my core values were from many of my military peers.  The typical military member has values that center around the following things:

  • Honor
  • Loyalty
  • Duty
  • Integrity
  • Trust
  • Teamwork

All the things above are clearly important, but they weren’t values that drove me.  They don’t define who I am.

Our deepest values often manifest themselves during significant events in our lives.  I mapped out the significant events in my life and was surprised at what trait stood out.

I believe the trait that is most important to me has been key to my successes in life.

It’s clearly been the key to my success in real estate.

Let me share two significant events with you.

YOU’LL NEVER RUN AGAIN

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Debt Pitfalls for Military Members

The military has some unique debt traps that are easy to fall into.

Buying New Cars

One is this whole military car sales thing.

“Let me go talk to my manager!”

You’ve seen them lurking around the BX preying on new enlistees just getting started out in life.

They try to sell you a new car when you are overseas.  They’ll tell you it’s an amazing deal because you are in the military.  They sometimes try to sell it as a military benefit.

It is simply not true. A military benefit is when the US government subsidizes the cost.

Here are examples of actual military benefits:

  • Commissary
  • BX
  • Medical and dental care
  • Space-A Travel
  • Tax-free housing
  • Montgomery GI bill

Here’s an example of what is not a military benefit:

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Real Estate Investing from a Distance

I’ve done it again!

Trying to expand my readership, I’ve asked another friend from the blogger world to let me post on their site.   Mr. 1500 from www.1500days.com is someone I first met at FINCON.  We crossed paths again at Chautauqua attending on separate weeks.  Super-cool guy with a great website.

This post, I give some tips on how to invest in real estate from afar:

Hey.

My name is Rich.

I love real estate.

I grew up in Southern California.  I remember thinking about buying real estate as a kid.  I was twelve years old.  I thought if I could buy a house then, I would be able to sell it when I was eighteen and have enough money for a car!  I was always fascinated by how fast real estate appreciated in certain places, especially near the beach.

Real estate is tricky for me.  I’m in the military, which means I move every two to three years.  Ten of the last sixteen years I’ve been overseas, including currently.

What kind of real estate investor moves every two to three years? 

That will never work!

I’ve found a way to make it work for me.  Over the past three years, I’ve purchased several buy-and-hold rental properties with cash.  The income they provide has made me financially independent.  Most of these purchases have been made from overseas.

Maybe some of my methods could be useful to you.  I’ll summarize my advice in three main points:

Click here to read more…

3 Steps to Retire Early on a Military Salary

This week I did a guest post on one of the most popular military financial independence websites.  This website was started by Doug Nordman.  He retired from the Navy in 2002 and hasn’t worked since.  He currently lives in Hawaii and surfs often when he’s not traveling the world.

Not a bad life.

What he did is what I’m writing about.  Working 20 years (or less), and then retiring, never needing to work again!

Here we go…

BLUF: In college I paid off $32k in student loans in a year. On a military salary I paid off a $280k mortgage in seven years. I’ve bought several rental properties with cash. I did this through paying off debt, having a high savings rate, and investing well.

My name is Rich. I’m an Air Force Lt Col of 16 years. I’m married with 2 young kids.

 

Here is my message:

Don’t work until you’re 65. Not even 55. You can save enough money to retire in 20 years or less. I mean after 20 years of work, NEVER WORK AGAIN (unless you want to). This method doesn’t depend on a military retirement, that’s just a bonus!

I currently make enough money from my investments to live on. I could quit working today, but I’m less than four years from a generous military retirement.

Continue reading…

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