Capital, Income and Net Worth are not the Goal

Have you ever had that experience where you set an important goal for yourself, get intense about achieving it, work hard and grit your teeth to push it over the finish line and when you arrive there’s absolutely no joy? Just a whimper. I have - and it feels like you just ran a whole marathon only to find out that the actual marathon isn’t until next week. And you were wondering why participation seemed so low this year. You get the wind knocked out of you and all that’s left is a deep … [Read more...]

Regret > Loss

The current strategy most Americans use to save and invest for retirement is fundamentally flawed. In order to evaluate the effectiveness of any strategy in an empirical way let’s look at the final results.  Then let’s compare them to the results you employed the strategy to achieve. We will go through that very process using two well known and often quoted studies. First, a 2007 study performed by the Employee Benefit Research institute found that the average Baby Boomer had an average … [Read more...]

The invaluable lesson a Roger Federer video taught me about long term real estate investing

Roger Federer, arguably the best tennis player in the history of the sport, visited the Google campus in Mountain View a few weeks back along with his coach Stefan Edberg (one of the game's greats in his own right). During that visit, they put on Google Glass and shot a fascinating video that showed a tennis match from the perspective of these two great players. Take a look: As I was watching that video, an interesting thought crossed my mind. As good as Edberg was in his day, he never … [Read more...]

On our need for structure and escaping the affordability mentality

Most of the articles I have written for Investing Architect revolve around strategies, ideas and plans you can apply and reach your retirement and wealth goals. But I am a firm believer that even the most brilliant of strategies would not be executed properly in the absence of the right mindset. So, I've been thinking about a couple of concepts that can substantially influence our mindset and I'd like to share those thoughts with you. On structure First, let's look at an instance … [Read more...]

The number one rule of investing

As the Sage of Omaha eloquently put it, the number one rule of investing is Don't Lose Money. At first sight it is a blatantly obvious piece of advice although I suspect most investors don't realize just how sophisticated it really is. The Case Study Allow me to share a hypothetical case study with you. Suppose you invested $100,000 in the S&P 500 on January 1, 2006. For the purposes of this example, there are no management fees or costs. During 2006, this index grew 13.62% so at the end … [Read more...]

The number one rule of investing

As the Sage of Omaha eloquently put it, the number one rule of investing is Don't Lose Money. At first sight it is a blatantly obvious piece of advice although I suspect most investors don't realize just how sophisticated it really is. The Case Study Allow me to share a hypothetical case study with you. Suppose you invested $100,000 in the S&P 500 on January 1, 2006. For the purposes of this example, there are no management fees or costs. During 2006, this index grew 13.62% so at the end … [Read more...]

A two word mantra for Blueprint real estate investing

Lately I have been thinking at length about what is at the  core of our Blueprint real estate investing strategy. There are many moving parts and elements to consider when putting together such a strategy: Location of properties, assets specs, financing, asset protection, tax implication, exit strategies etc. But as crucial as are all those aspects, at the end of the day, the Blueprint real estate investing strategy can be summarized in a simple two word mantra: Buy Quality When you buy … [Read more...]

What catching monkeys can teach you about real estate investing

The story goes that in ancient India, the natives used a clever technique to catch monkeys. Unable to catch them outright since the monkeys were much faster, they dug a hole in a tree trunk that was just big enough to fit the monkey's open hand. Inside that hole, they placed some nuts to lure the monkey and hid. When the monkey would reach in and grab the food, he would make a fist that was bigger than the hole in the tree. The monkey was trapped and the natives would come out of hiding and … [Read more...]

Real Estate Investors: Know thyself before you wreck yourself

Real estate investors come in different varieties. Some are so risk averse that they keep six months of payments in cash reserves for each investment property they own. Others don't really feel like they're investing unless they're going "all in" on some deal every week. But no matter where you fit into the risk spectrum, you should know exactly where you stand before you start investing. Then pick investment vehicles, strategies and advisors that suit that investment "personality". I know that … [Read more...]

Your most important wealth building tool

I'm writing this from Terminal D of Houston's Intercontinental airport so I'll be brief. Brevity notwithstanding, the concept I want to talk about today will deeply affect your success with real estate investing. Most aspiring real estate investors think that success in this business looks like a series of home runs. You know, you buy a house, flip it, double your money - then rinse and repeat till you get to your desired number of millions. Or the other popular choice: Buy five dozen homes, … [Read more...]

Everyone is a genius in a rental bull market

The rental market in Houston Texas is hot. Rents have been rising steadily for the last 4-5 years with average time on market dropping to under 30 days. Landlords are in the driver's seat and the high demand for their properties allows them to ask for longer term leases, higher credit tenants and rent escalations built into the deal. What's most important is that this rush of demand is fueled by real economic and job growth, not some artificial inflation. Under the current conditions you could … [Read more...]