The Next Crooked Furrow - Pt 3

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Gee - we ARE getting these posts a bit more often now! Super Cool!

Direct Mail Update:

The response to my direct mail effort was, well, underwhelming. For an untargetted mailing, though, it's within reasonable expectations. So, I'm not concerned. I will just push that down on my list of marketing efforts in terms of effectiveness.

I have, however, discovered something which HAS proven useful: Craig's List.

Now, the most effective ads are the paid ads: job ads. They're $25 per category, and you can post the same ad to more than one category. They just just don't like it when you post the same ad to multiple geographic areas. Guess they don't believe in covering a lot of bases at once.

Still, even these ads are not as effective as one might like. I do get responses, but mostly these are from people who are not looking for anything other than a job. They just want to come in, go over their resume with you, fill out your application, apply for benefits and start collecting regular paychecks.

That's what makes this such a crooked furrow - it's a learn-by-doing type of experience.

So, that said, I developed a new Craig's List ad based on the results of some members of my investors' group who said they were getting the best response from bandit signs advertising for sales rep.'s.

I posted an ad on Craig's List titled, "Sales Rep.'s Needed". The ad read like this:

Must be comfortable working for 100% commission as 
an independent business person. No travel, work 
from home.

Training on products is provided.

Must be comfortable generating your own leads. We 
have a few to get you started and training on lead 
generation is provided.

Licensing fee required, no other up-front money.

Commissions are unexpectedly good. Details 
provided during training.

I thought was appropriate because the real estate school this revolves around does pay referral fees or commissions. It's about as close as one can come to any kind of opportunity which pays its own way. I do have to cover my own marketing costs, as would anyone else. So, there is some expense incurred aside from the licensing fee.

I did get one very promising response the first time I ran that ad. He's currently in a sales position and has construction and construction supervision in his background. If he has an entrepreneurial spirit as well, I think he'll not only come on board with us, I think he'll do very well. One of the group leaders was also in construction - remodelling, actually. So, these two will have a lot to talk about if he comes on baord with us.

So that's my current status. I did sign up for the basic classes offered by the real estate school. I started that today.

I'll also be keeping up my marketing efforts.

Follow along with me. The best is yet to come!

Your comments are always welcome!

We'll talk again soon!

Take care - be well!

Much Success!

Debt Reduction - 101

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Wanted to share some insights on the topic of debt reduction I've picked up along this journey.

The first comes from a Multi-Level Marketing company I hooked up with back when I was first laid off, back in the fall of 2009.

To get on track toward your debt reduction goals, you first need to assess what you owe and what are the interest rates on those accounts. Order them first by the lowest balance, then by the highest interest rate.

The first goal is to achieve the first pay-down.

"Pay-down"? Don't you mean "pay-off"? Well, not quite. We'll discuss that in more detail in a moment. For now, let's just focus on that account we can knock down easily because it has the lowest balance.

What you want to do is pay above the minimum on all your accounts except your house payment. Most of all, you want to figure out how you can pay down the lowest balance first as soon as you can possibly get it paid down.

Once you get that first balance knocked down to 10% of where it was when you started your pay down plan, pull this payment back to the new minimum payment and apply the surplus to the second account on your list. If you can, pay $100 plus the amount of finance charge on the current statement. If that's too much to handle, do what your budget will allow, but by all means do as much as you can to knock these debts down - they're literally killing you, financially!

In fact, if you can, pay the minimum payment plus $100 or more. It will be uncomfortable while you're working your way out of the hole, but you'll feel SO good when you're done!

Do the same when you've paid the second account down to 10% of the balance it had when you started your pay-down plan: pull the second account payment back to the new minimum and apply the surplus to the third account. Again, pay at least $100 plus the amount of finance charge on the current statement, if you can, or the minimum payment plus $100 or more. This should be getting easier as you knock these balances down.

...and so on. The technique is called "debt stacking". You pay the same amount toward your debts every month, even as accounts get paid down. You just shift money around so it goes toward the next highest balance or interest rate account.

Now: Why "Pay Down" and not "Pay Off"?

Well, perhaps anecdotal evidence will explain it better than I can.

I recently commented on an article in an on-line publication regarding the topic of credit. I saw a post from a fellow calling himself, "Justin".

“Justin” posted, “had about 8K on credit cards, always paid on time, never had any credit issues, I was paying it down slowly (leftover college debt), then I came into some money (overseas assignment) and paid it all off in about 3-4 months. I thought, wow this is gonna be good for my credit...wrong! All the credit card companies cancelled my cards and said I was a credit risk. I had a mid 700 credit rating, well paying, solid job and always paid on time. Makes absolutely no sense to me, any insight?”

A fellow calling himself "Peter" chimed in.

“Peter” responded, “Yeah, if you have no debt, the bank isn't making money. Therefore why should they give you a credit card?”

This was my response:

While Peter kind of missed the mark, the essence of his thought was valid. I'm guessing Justin’s creditors got nervous from the sudden, radical change in his fiscal habits.

Bankers can't handle radical changes - they're greed-driven, not rational. They will always assume the worst (picture the comic-strip character with his own private storm cloud over his head). Best to break it to them gradually, no more than 10% per month of your starting balance when you begin the payoff, then carry a small balance - say, 10% of what you had before you paid it down, just to show them you're still a reliable source of income.

I know, should we come into a large sum of cash, there's a tendency to want to "cast off the shackles of yesterday" and run free. I'd like to do that myself, actually.

I do have some personal financial issues - not related to credit - I will want to dismiss with the first big payouts I get from my entrepreneurial pursuits. No bankers involved there, so I'll clear those up post-haste.

After that, though, I'll begin a gradual reduction in my credit utilization so it becomes clear from my credit report that I became able to reduce my balances without appearing to be "spending wildly" or indicating huge changes in my fiscal habits.

I will, of course, resume building and then begin using the credit of my LLC, so large expenditures and subsequent payoffs do not appear on my personal credit.

Your comments are always welcome!

We'll talk again soon!

Take care - be well!

Much Success!

The Next Crooked Furrow - Pt 2

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Gee - we're getting these posts a bit more often now! Cool!

In the last post, I promised a URL to my "squeeze page". Before I do that, let me explain: this will be most useful to those in the Chicago Metropolitan area. The squeeze page takes you to an ivitation to a local meeting - remember, we talked about that last time: this group is based in the western suburbs of Chicago. They also have an office on the City's northwest side, in Indianapolis and in the Greater Rockford area.

So, that said, here's the link: www.DJEDevelopmentGroup.com

The video is short, about five minutes.

The "squeeze page" asks for your name, your phone number and your e-mail address. It's o.k., I won't be calling or e-mailing you without your permission. See, when you enter that information, the first message you get is by e-mail asking permission to continue to correspond with you. Seems redundant, but it IS required by law that I do it that way.

Click on the "authorize email" link in that message and you will receive a "Thank You" message from me. In the "Thank You" message, I tell a bit more about the group and the folks who lead it. Don't want to spill the whole thing here. This is a blog, and that's information for folks who choose to pursue a business relationship with me and with the group.

Still, you can unsubscribe at any time. I don't plan to do e-mail campaigns or any of that.

If you do choose to continue with me, we will be in touch regularly by phone, e-mail and in person, if you're local to the Chicago suburbs.

What I am doing a bit different from most folks in the group who choose to use the squeeze pages is that I'm using their ability to do on-line "relationship building" via e-mail. I've had a good two years of exposure to on-line marketing, though this is my first attempt at on-line relationship building, known in the larger business world as "CRM": Customer Relationship Management.

This may catch on, depending on the response I get. So, please use the comments space here on the blog to voice your opinions. I'd really like to know your thoughts to help me build this business further, hopefully with some of you alongside me. We can earn, learn and grow our businesses together.

Here's the best part: this group holds a workshop every month, usually the third Saturday. For $50, whether you join in any other aspects of the group or not, you get a whole day of content and learning, from 9 to 5 with a 90-minute lunch break. Note that the focus of the day is content, not a sales pitch. For $50/month, you can't beat the learning opportunity. Others would charge hundreds for a single-day presentation.

Otherwise, the group meets on Thursday evenings and Saturday noon time for the business presentation, and then on Friday at noon time and Monday evening for a follow-up, question and answer session.

This is what you don't get from the "gurus" who do the 90-minute sales pitch webinars: a place to learn and to build an on-going relationship with the people in the group. As we go along here, I'll point up more of the differences, but that's a big one, and even though you're getting this blog for free, this little bit of knowledge can be worth many, many millions of dollars to you.

If you've read my earlier posts you know that I DO advocate listening to the sales pitch webinars. In the first place, they're "free". You're paying to run your computer and have internet access anyway. This is one way to make it productive. If you listen to enough of these "gurus" you can pick a LOT of good information out of their presentations. You just have to get past the sales pitch to find the information.

Here, this group doesn't offer up sales pitches. The Saturday Workshops are all content. In fact, when you come, bring a fresh pad of paper and a good pen or two to each one because you WILL want to write down a lot of information. You won't want to run out of paper or have a pen run dry on you.

Here in this area, I know of only one other group which holds "no sales pitch" meetings. The group is known as "the WCRT", for no special reason. The letters don't really mean anything according to the group's leader, Ryan Steele. Ryan is a successful investor in own right and does do one-on-one mentoring, for a fee. The WCRT meets the first thursday of every month, except where that falls on a holiday. Take a look at the WCRT website for more information. Every month features a speaker - pure content, no sales allowed.

Having the group for support and making local contacts is by far the most valuable resource any group can offer. The "gurus" don't seem to get that - their presentations are pure marketing from start to finish - just being brutally honest, no offense intended.

As to part 2 of the latest crooked furrow, I dispatched my first direct mail campaign this afternoon. 556 pieces to two carrier routes in a local zip code. We'll see what kind of response they draw. Untargetted direct mail gets the lowest response rate, usually. So, I'm guessing less than 1%. Out of 556 pieces, maybe 2 or 3 people will pursue it. I'm hoping to do better, of course.

We'll talk again soon!

Take care - be well!

Much Success!

The Next Crooked Furrow

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Well! We went another more than a month without a new post. I've been busy and there's good news coming!

First, let me thank those who expressed support while I was recovering from the changes that went down this past Spring. Your warm wishes meant a lot.

Secondly, I'm still plying my IT trade and shopping the job market while working toward my financial independence goals. Working on a new job that's more in-line with the bulk of my experience. Looking good, but I don't have the offer yet. Wish me luck!

Third, I have some REALLY great news on the financial independence front.

I've connected with a local group of investors. I was going to make that a longer sentence, but thought better of it because it contains an important point: I've connected with a LOCAL group ...

The key word there is "local". That means I can visit them, attend their gatherings, sit and take notes as often as they hold their events. That's SO much better than buying something off the web and trying to figure it out without some active support. It means so much to have the group to whom I can turn with my questions because SOME one is there who has some kind of answer. There's typically more than one answer to questions not involving legal issues, and even that is not 100% certain.

That said, there is something connected with this group which is strongly in keeping with the principles I set forth when I started this blog: at least SOME level of support for those whose financial means are stretched well past the breaking point.

While this group does do marketing for a real estate "university", they do something that NONE of the other marketers in this space can even pretend to do - and many of them do "pretend": the school offers financing! ...and down payments as low as 20%!

Unfortunately, even this outfit and their marketers do not have what the true "no cash, no credit" people (like me) need, BUT: they do have a way to generate income that can pay for the classes they offer. By being an affiliate marketer you can earn commissions that can pay for the classes you might want to take from the school. The affiliate licensing fee is $125 a year.

Also, the class material is all self-paced and on-line. You can study at your own speed in your own home office or anywhere you have internet connectivity.

In my next post, I'll do something that might be considered unthinkable by some: I'll post a link to my "squeeze page" where you can be introduced to this group and the school they represent. If you want to know more, you'll have to tune in again in a couple of weeks to get the rest of the story.

In the mean time, ask yourself this question: if you had people with private money looking to you for an opportunity to get better-than-bank returns on their retirement accounts and other investments, how easy would it be to turn some real estate deals and make some income?

Now, what does this have to do with "crooked furrows"? Well, if you read my earlier posts, you may remember that one of my adopted mentors holds that he'd rather see a crooked furrow than a field unplowed. I'm cutting another crooked furrow in relation to my latest venture thanx to the US Postal Service.

USPS has introduced a new service called "Every Door Direct Mail", or "EDDM". EDDM provides delivery to every mailbox on a carrier route within any zip code. It's not targetted at all - there's no provision for mailing lists or special permits, it's just base rate per piece. You need a minimum of 200 pieces in a mailing, which means you may need to start with two or more carrier routes to go over the top of 200.

Here's the USPS link for more information:
https://www.usps.com/business/every-door-direct-mail.htm

I showed my first draft mailpiece to some group members. One of them suggested I need some attention-grabbing graphics. Right now, it's all text, like a sales letter. I'm not a graphic artist. I don't know from graphics. So, I'm considering my first attempt at a direct mail piece to be a "crooked furrow".

Tune in again in a week or two and I'll have more for you!

We'll talk again soon!

Take care - be well!

Much Success!

Nobody's Perfect

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

When we're starting out, getting everything together to start our business, we worry a lot about doing something wrong. Often times, this can lead to procrastination and hestitation to take action. In this post, I want to share a story about a "famous" crew who experienced a major hiccup in one of their projects.

So many of us want to hit the mark perfectly on the first shot. The truth is, of course, very few of us do. Often times, our first attempt is less than perfect, less than ideal. To quote from Warren Buffet, "Business is like baseball: more games are won with base hits than with home runs."

One of my adopted mentors said, "I'd rather see a crooked furrow than a field unplowed". I don't know if he originated that or where he got it from, but I think it makes a great statement. Do SOMEthing, even if the result is less than perfect.

I just saw an episode of "Flip This House" where the team made some major misjudgements. It seemed like a good example because here we see that even seasoned professionals sometimes still get it not quite right.

The subject property was a Connecticut contemporary with a view of Long Island Sound from the deck. It was found by one of their students who initially thought it would be only a few cosmetic fixups.

As it turns out, however, there were some REALLY major issues.

Initially, it seemed that the worst issue to fix would be some water leaking from the attic space, apparently from an air conditioner in that space. The fix wound up being major repairs to the air conditioning unit, including replacing the evaporator coil. The condensate drain also needed to be rerouted to prevent condensate being trapped in the pan and over-flowing into the living space.

When work on the project began, they started outside on the landscaping. Good thing they did, too. It helped them uncover a major issue with the septic system.

Many of us are accustomed to city water and sewer. So, sewers and waste water disposal are easy to overlook, especially when we're not familiar with an area we may have never visited before. In the case of this house, city sewer was not available. So, the septic system had to be dealt with.

By the way: take the word septic *VERY* seriously! I provided the link for a good reason. If you're uncomfortable with strong odors, you'll want to approach these properties cautiously. I remember once hearing an explanation of how to distinguish between chemistry and biology: if it doesn't stink its chemistry. If it stinks it's biology.

When the property was found, it was disclosed that the septic system was not working. This should have been a major red flag.

The initial rehab estimates did not include a replacement of the septic system. So, the initial estimates for repairs were low by almost half of the resulting final amount. While this did not eat up all of the profitability of this property, it was a major hit.

I did not know before watching this show that when a septic system is taken out of service permanently, the old septic tank has to be crushed and left unusable. I'm thinking the main reason for this is to prevent a cave-in at some future point as the concrete buried in the ground deteriorates over time.

In the end, the property was sold at a substantial profit. Still, the repairs did run over budget by more than $25,000.

What's my point?

Sometimes, when we should do "Ready, Aim, Fire!", we focus so much on the "Aim" that we never seem to get to "Fire!".

So, I will encourage you, as others will, to do "Ready, Fire!", THEN aim.

Now, of course, I don't mean that your "first shot" should be entirely random. Once you're comfortable with a general direction, GET MOVING! Take action. You'll have to make corrections along the way, of course, but at that point at least you'll have things happening. Remember: a vehicle which is stopped cannot be turned - it has to move in order to even turn the wheels toward a new direction.

Perhaps you've heard it said that a ship at sea or an airplane in flight is off course most of the time. Small corrections are always being made to keep the craft on track toward its destination.

Likewise, we must always make corrections to our course to keep ourselves and our endeavors on track towards our goals.

Give yourself permission to be imperfect. Perfection is always elusive. Success is achieved by those who pursue it!

We'll talk again soon!

Take care - be well!

Much Success!

Life

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Welcome back to the blogosphere!

This post, I want to relate some of what life hands us as we go along.

It is said that "Life Happens". Indeed it does, and yours truly does not escape that.

There was no April 2011 post on this blog. My apologies. Life did indeed happen.

It not only happened, it ended.

Not my life, of course, but someone very dear to me - my own Mother.

Mom was 98, and very much in need of a constant companion in her final weeks. Initially, I'd moved in with her expecting my finances to come crashing down, but with the new job back in September of 2010, I was able to stay afloat. Then, another job came along, and good thing it did. Little did I know that it would make possible my brief stint as Mom's live-in, full-time caregiver. They let me work remotely which was more of a blessing than I can express.

I'd never before been this close to an almost centenarian, so I had no idea how it can go for people of advanced years. In her last weeks, she barely knew who I was. In her last days, she wasn't even sure who she was. In her last hours, she reached out to the objects of her Faith and begged their intercession. When she did finally go, I could almost feel her relief because her trial in this world was finally over.

If you're ever called upon to be of service to someone who needs you, I hope you'll embrace the challenge, and do so with relish. Watching her waste away was by far the most heartbreaking experience of my life, but being there and taking care of her was almost as if I was meant to be there.

I didn't always know what I was doing. Heck, I made most of it up as I went, and yeah - I screwed up a LOT! Still, it all came to me as if I'd done it for years and had only to reach inside myself to remember.

While watching her final moment of life was an experience I will not soon forget, I really can't imagine a more rewarding experience than being there for Mom when she needed me.

So, that's my post for this round - short and to the point.

It's been said by so many, but I'll say it anyway: Be A Servant

I mean that - truly a servant. Give of yourself with no expectation of return or recompense. We each have a gift inside us, a gift that someone around us will someday need. When that day comes, your purpose will be fulfilled when you give that gift because that is why you have it: to fill the other person's need. Only you can give that gift - no one else has it to give.

I believe that a part of my purpose is to be here and share with you my experiences along my journey. Please consider me your servant!

We'll talk again soon!

Take care - be well!

Much Success!

Real Estate Tips

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

This post, I want to pass along some tips I've come across. Again, more stuff you'd pay thousands for from anyone else.

Investor's Research

Now, quite the opposite of real estate, my sister lives with her husband on a sailboat. Still, she was able to pass along this link:

Mapping America — Census Bureau's 2005-9 American Community Survey
http://projects.nytimes.com/census/2010/explorer

This is a fairly high-tech map with lots of "mouse over" functions. So, you may need a speedy, newer computer to use it and get the most out of it. That said, it includes lots of data gleaned from the census - demographics, yes, but also community information. Also, it only covers up through 2009. So, it's a bit dated.

Now - you'll notice its from the New York Times, and NYTimes has said that it plans to start charging for using its website. So, don't be surprised if this is no longer a free service at some future point. Goodies like this seldom stay free for very long.

In keeping with this blog's focus, however, let me also point out: my sister and her husband bought the boat as their first retirement home. Since then, they've both seen former employers - and the associated pension plans - go under. So, the income they thought they would have has dwindled a good bit. The husband recently had a near-drowning experience which could have been much worse and could have caused medical expenses which would have devasted their finances.

All the more reason to pursue passive income from multi-family property.

Property Owner?

In talking to my brother, I was reminded of a common mistake rental property owners make. The first home he and his wife bought is now an income property for them ... or, at least, it should be. He remarked that he still has two houses and wishes he only had one. I asked him if it was positive cash flow. He said just barely. When I asked why, he said it had to do with incidental expenses which crop up: this breaks down, that needs replacement, water in the basement, and so on. When I asked what his maintenance budget was, he just sort of stumbled over his response.

See, any rental property has to be treated differently than your own home. The property has to pay its own expenses - ALL of them! It's up to you, the owner - or your assigned property manager - to include some cash reserve deposits in your "positive" cash flow.

With your own home, when a sump pump breaks, a toilet flush valve breaks, or something else happens, you can usually absorb that into your household budget.

Your income property has to have its own budget, separate from your household and your personal income. Your income property has to carry its own weight, entirely separate from your personal income.

Income property -MUST- be treated as a business. It has to stand on its own, first and foremost. If it can't, consider selling it to someone who can afford to rehab it so it can command a higher rent and cover all of its own expenses with a little left over for the owner. You could rehab it, or pay someone to do it, unless you're competent and available to do it yourself. Just remember that any work you do or have done has to be to code and must pass inspection.

In my case, I'm looking to acquire large multi-family properties. So, I'll be hiring a property manager, hiring tradesmen and rehabbers, and so on. I'm only one man with physical challenges. I need to hire a team to do what I myself cannot.

Remember also to control everything - own nothing. Your rental properties should be assets of a business or businesses you control so you personally cannot be sued to gain control of those properties. We've talked about this before. See my earlier posts on this blog. Remember also that I cannot give financial or legal advice. Consult your legal and financial professionals for guidance.

We'll talk again soon!

Take care - be well!

Much Success!

Entrepreneurship

Hello! David J here again bringing you more of the steps on my journey toward financial independence.

Part of what financial independence is all about includes entrepreneurship - looking for a need in the community and building a business by filling that need.

So, to help, here's an idea or two from my personal experience.

Two of the most under-served markets I've found are products for the elderly, especially the Vision Impaired.

Needed products for the vision impaired include:

- Laundry gear: Washers and Dryers
- Microwave ovens
- Radios, music players
- Clocks
- Others

One of the biggest challenges to the vision impaired is the appliance industry's near-total reliance on tiny buttons, membrane keypads and digital displays. The vision impaired can't see the keypad to press individual spots, can't see the digital displays to get visual confirmation that their inputs were correct, and can't find the start "button" on a membrane keypad. Among the elderly, vision impairment is typically coupled with hearing impairment. So, audio feedback is similarly useless to them.

To be the most useful to the vision impaired, such appliances must have simple controls.

For a washer, for example, the vision impaired should be able to just drop the clothes in, pour in some liquid detergent, close the lid and press one over-sized, easy-to-find button to start it.

Same for a dryer: toss the clothes in, add a piece of a dryer sheet, close the door and press one over-sized, easy-to-find button to start it. A self-cleaning lint-screen would be big selling invention, also!

Microwave ovens need a mechanical keypad laid out like either a telephone (top, down) or a calculator (bottom, up) with big, easy-to-find keys, and press one over-sized, easy-to-find button to start it.

Radios need presets, like old-style car radios: big, easy-to-find buttons that someone sets for them once (or they can maybe learn to set themselves!), over-sized, easy-to-find volume knob, over-sized, easy-to-find on/off switch. Same for music players: over-sized, easy-to-find controls and other features.

(Forget about remote controls, by the way - the vision impaired can't see them.)

Clocks need voices - actual digitally-recorded human voices, not stilted, hard to understand speech synthesis, and need to include the day of the week, day of the month, month of the year and the year. Again, press one over-sized, easy-to-find button to start the announcement. Remember also that among the elderly, vision impairment is typically coupled with hearing impairment. Recorded speech must distinct with clear enunciation, and IT'S GOTTA BE LOUD! ...or have the ability to be loud!

Another market which needs to be served: the elderly and physically impaired who cannot operate can openers, microwave ovens or stoves to prepare their own meals.

This market needs tasty, nutritious products that either keep at room temperature or above (since the elderly typically prefer to live in sauna-like conditions) or in the refrigerator.

The key feature MUST be: open it, and eat it - no further preparation required.

Oh, yeah - I've thought about granola bars and such. Y'know, the kind of provisions one might take on a camping trip or keep in stock for disaster preparations. To paraphrase a line from the movie, "Crocodile Dundee": "Well, you can live on it, but it tastes like dirt!"

So, there's a couple of thoughts for nearly totally unserved markets. Living with an elderly, vision impaired mother with mobility challenges, I've been searching for products fitting these needs for years.

With the aging of us "boomers" and our offspring, those markets will certainly grow by leaps and bounds over the next decade or two or three or ... Fill those needs, and you could be the next Steve Jobs, Nikola Tesla, Howard "Rory" Johnson, or other great inventor.

We'll talk again soon!

Take care - be well!

Much Success!