Archive for the ‘Real Estate’ Category
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11
Jan
2010
Professional partners improve your credit chances
Professional partners are a special category of partners. They do not invest money. Instead, they invest their professional services in exchange for a share of your invention or your business. Patent attorneys, patent agents, professional prototypers, accountants and contract attorneys all have the potential to be a professional partner. Before you get too excited that this will be a way that you can dramatically decrease your expenditures, be forewarned that professional partnerships are hard to come by. Some independent inventors think that when their patent attorney sees their great idea, he will eagerly barter his services for a share of the invention. This is rarely the case. Keep in mind; patent attorneys earn their living by seeing inventions every day, all day. They couldn’t make a living if they traded their services for a share of each invention that came across their desks.
We have heard of cases where a patent attorney did become a professional partner to an inventor but these cases are extremely rare. We mention it here only because it does happen on rare occasions and it may be worth it to you to suggest it if the individual you are working with indicates a strong enthusiasm for the invention. It is something that every patent attorney or patent agent has had suggested to him at one time or another. It doesn’t hurt to ask. and he will not be offended if you ask, but don’t get your hopes up.
5
Jan
2010
Credit card interest rates are high for high amounts
If you do not have personal savings with which to fund your invention, you could use your credit cards. This is a slippery slope, however. Never charge more than you can easily pay back within a reasonably short time. Credit card interest rates are among the highest and using credit cards for large amounts that must be paid back over an extended period of time is not a wise course of action. It is appropriate to use your credit card for small purchases of prototype materials or prototyping services, for example, especially if you are like us and like to get air miles for nearly everything you purchase.
5
Oct
2009
How swiftly can you process your emotions?
Stocks trade on exchanges. Because dividends are either small or nonexistent, the value of your stock is determined solely by what other investors are willing to pay for it. In a calm market, you will experience a sense of unmanageability, because there is nothing you can do to force others to raise the price of your stocks. Even small losses in calm markets can be troubling because investors rarely want to admit their mistakes, feel the pain of loss, and move on. Focusing on prices rather than the cause of the losses, they hang on to losers until they can break even.
Optimism can grow into fantasy. Investors sometimes fall in love with their companies. They fantasize about new products and skyrocketing stock prices. All evidence of deteriorating fundamentals is rationalized away or ignored. Individual stocks can decline for years or decades. Believing fantasy can lead to many years of pain even in calm markets. However, we have seen few calm markets in recent years, and volatile markets are more troublesome.
In most markets, stock losses happen quickly. A bad earnings report can cut a stock price in half. An unexpected rate hike by the federal government can knock the whole market down 15 percent in a month. For still unexplained reasons, the whole market dropped 22 percent on October 19, 1987. Few investments move so quickly. Real estate rarely moves 1 percent a month. Unless you can process your emotions quickly, stocks will cause you a lot of pain.
7
Sep
2009
Difficulties with employees is not going to change
I want to point out that difficulties with employees is not going to change. The interests of shareholders and employees have always been and always will be opposed. In fact, in the last two decades, employees have increasingly siphoned off a larger and larger share of profits. According to a 2001 study by Sanford C. Bernstein & Co., accounting tricks disguised the fact that there was no growth in profits between 1995 and 2001. Nevertheless, salaries, bonuses, and stock options soared. Industries in which shareholders have no chance to make a profit may soon be the norm. Claims that stocks are the best investment for the long-run ignore this trend.
You cannot change the fact that employees have an advantage over shareholders. This is an inalterable, long-term fact of stock investing. You must focus on yourself, not them. If you can handle a long-term relationship with decades of built-in conflict, stocks may be for you. If you currently have great difficulty with conflict in relationships, yet you really want to own stocks, you may be able to change. Always ask how you can change, not how you can change them, or how they can change themselves. However, be realistic about how much emotional turmoil you can handle and how much you will have to change internally if you are going to stay in stocks. Even if you can handle the conflict of interest with employees, there are other equally difficult issues.
28
Aug
2009
Bank loans are taken out and bonds are issued
Highly public maneuvers can dilute your interests as well. Bank loans are taken out and bonds are issued, taking control of the company away from you and granting it to bankers and the whims of the bond market. New shares issues are sold to the public, diluting your stake. Mergers and acquisitions of other companies further dilute your power and tighten the hold of management over your earnings.
Investor relations departments are set up to divert your attention from what is really going on and to placate your reaction. Companies often buy back their own shares, indicating that this will increase your ownership interest. What is really going on is that your interest is transferred elsewhere.
Bought-back shares are placed in employee stock ownership plans or financed by bonds and bank loans. When it is all over, employees and lenders own more of the company and you own less.
Ask yourself: How does all this makes me feel? You may feel betrayed or abandoned. Your broker or financial planner never mentioned the fact that simply buying stock is likely to make a sucker out of you. Certainly, a sense of unmanageability begins at this level.
20
Jul
2009
How Bad is it?
When it comes to eliminating your debt, we’ve arrived at that point. It’s time for you to pull back the sheet and see how ugly this thing really is. It’s time to grab pen, paper, and calculator and get the numbers on paper.
For now I just want you to break down your debts between long- and short-term debt. If you’ll recall from Chapters 2 and 3, long-term debt includes your mortgage and student loans, while short-term debt includes credit cards, car loans, medical bills, and everything else.
Add everything up and record the numbers here:
Total short-term debt: $___________
Total long-term debt: $___________
12
Jun
2009
Cross-fertilization of ideas in investing abroad
By investing abroad, not only can you get the benefit of a cross-fertilization of ideas, but you can also benefit from a cross-fertilization of projects. In New Zealand I am involved with a boutique hotel and a small vineyard. To many people, this may just be of passing interest, but my colleague and friend Rich Lamphere recognized a tremendous opportunity to link the New Zealand operation to his extensive project in northern California that also includes a vineyard and boutique hotel.
Rich is a true visionary with a big heart, and is living proof of Zig Ziglar’s maxim that “You can get whatever you want, so long as you help enough other people get what they want.” By offering guests in either country wines from both projects, reciprocal hotel perks, combined frequent-user benefits, and an excuse and incentives to use the other country’s facilities, both projects benefit.
As for the claim that real estate is so complex, and the laws so involved, that it is difficult to keep up with the regulations in your own turf, let alone a foreign country, these critics need to get a passport (I would put money on it that they do not have one), jump on a plane, and go somewhere where they have never been before. Of course real estate is complex, even at home. In fact, it is so complex that even at home you should barely do any of it yourself.
30
Apr
2009
Real Estate and Opportunities of Investing abroad
Bear in mind that one of the tremendous advantages of real estate is that you do not need most of the money required to buy a property—banks willingly provide those funds in the form of a mortgage. In general, banks will not lend money on real estate purchased abroad,1 so if you were to buy a NZ$10 million property in New Zealand, you may only need NZ$1 million or less as a down payment from your own country—the rest is financed locally.
If the value of this investment over time goes from NZ$10 million to NZ$20 million, then not only have you made a 1,000 percent return on your cash investment of NZ$1 million, but the NZ$10 million profit, expressed in U.S. dollars, will also have gone up (or down) according to the change in exchange rate.
Secondly, many people claim that investing overseas is unpatriotic, as it diverts resources away from your home country to other countries. This is pure nonsense for two reasons. As we have just been reminded, when you invest in real estate in a foreign country, most of the funds required for an acquisition are provided by a locally sourced mortgage. Furthermore, claiming that investing abroad diverts funds away from your own country ignores the fact that the explicit purpose of any investment is to generate a return and (should you ever sell) a capital profit, both of which will eventually be brought back to your country.
27
Apr
2009
Panama Real Estate Possession Rights: Buyer Beware
Not all properties in Panama are in the private domain. Many beachfront properties, islands, and real estate in special tourism zones and historically protected areas are owned and managed by the national or local municipal governments. In those areas, possession rights are granted for a determined period of time. Two such protected areas are the archipelago of Bocas del Toro (mouth of the bull), which to many visitors fits the description of tropical paradise, and Portobelo, a beautiful harbor on the Caribbean visited by Columbus and the final resting place of Sir Francis Drake. Some beachfront property is available for purchase but is subject to the law that all beaches are public. All beachfront properties must provide a right of way starting twenty-two lineal meters from the highest tide to the property line.
Because of the lack of uniformity regarding the granting of possession rights, possession rights should be approached with caution.
When considering properties located in such areas, you should ensure that the possession right has in fact been granted by the relevant national or local government authorities and that the length of the time right is adequate for the purpose of the investment. The possession right should also contain a complete description of the property, including boundaries, encumbrances, and any other significant features or details (with an accompanying complete blueprint drawn and approved). You should make sure that any anticipated construction, activity, or improvement is acceptable by the national or local government. Transferring a possession right can take up to six months, depending on many factors, such as the date of recognition of the possession right and inspection by the granting entity.