Tuesday, September 2, 2008

Love, Fear & Money

I have not always handled my money wisely. Like some of you, I made some investments that bottomed out. Divorces diminish a person's net worth. And yes, I could have also set more aside, but chose to spend it instead. So I work a full time day job plus work at developing my own business evenings and weekends, which I enjoy tremendously. I have always figured that I would stay busy until I die, and it would be great if I had enough money so that I might have a comfortable cushion between my necessary expenses and occasional luxuries. Many of us are in the same position, aren't we?

Feeding off our fears of lack of money, there are predators who see us as targets for a renewed recent wave of get-rich-quick seminars. We know that people can make money in the stock market, real estate investing and other methods. And we also know that if we are not impeccable with our execution in these efforts, we can lose whatever we have invested.

For example, it is still possible to make money in the stock market, but you must buy and sell at very quick intervals and use excellent judgment on when to by and sell. You can also make money flipping houses, but you have to be prepared to do most of the labor yourself or be prepared to hold it for quite a while until it resells, perhaps becoming a rental landlord. If you have deep pockets, this is not a problem, but if you only have a modest amount of money to invest, any of these factors can wipe you out in short time.

We get mailers all the time from people sponsoring seminars that offer guest speakers and maybe even a free lunch. Usually these have some ridiculous bogus price attached to them like “$160 value” or "$250 value" but no one ever pays that because these tickets are complimentary if you respond and make a reservation, providing them your name, address, phone and email so that they can continue to send you more sucker bait forever. The real thing is that the free talks may give you a few tidbits of information or some inspiration, but then the rest of the talk is peppered with sales pitches for their “intensive three day seminar” which may only cost $495 if you buy today.Or maybe only $5,000 if you buy today.

One all day series of free seminars in “wealth building” we attended featured a speaker who offered a $100 kit that would help a person figure out how to make money on eBay. This struck me as odd, given that millions of people have already figured out how to use eBay without a kit. Another speaker offered a special three-day training in how to make money in real estate, for only $6,000 with additional “mentoring by phone” available for several thousand more. And this is from a person I never heard of anywhere but in this seminar. Another speaker offered a kit that included the addresses of county assessors offices. Another offered software that would tell you when to buy and sell stocks. And, of course, all these prices were “show specials.” When we calculated up the offers from one of these days, if you would have purchased everything that was offered, you would have spent $10,000 in one day just on kits and workshops.

The attitude of some of the seminar leaders was downright snarky. For example, in response to one person, the leader shot back, “Did you make a million during the dot com boom in the 90s? Why not? This is one of the top markets in the country in foreclosures. Have you made a million in foreclosures yet? Why not?” The implication being that you must either be stupid or lazy if you didn’t.

I mean what else could it be? We have not yet arrived at a point where you can go to a realtor's office, swipe a credit card and walk out with a deed.

But no, I was wrong about that. The whole idea was about making space available on our cards so that the next day we could get all excited and put some dandy purchases on our newly enlarged credit limits. Just imagine that you are offered the opportunity to sign up for a workshop costing $77,863. However, if you signed up right then at the three-day seminar the price was reduced to only $43,990. The least expensive one was $12,975, but only $8,990 if you sign up right now. Look how much you are saving if you sign up today! It never occurred to me for one minute to actually buy any of this. I thought to myself that if I could put $77,000 into property and get started flipping I would have an actual asset.

Then the sleazebag told us that he would pray for us to make the right decision. We decided that returning for the third day of the seminar would be just too disgusting. As it was I felt like I needed to get home and take a shower.

Some of the courses offer information already generally available to the public. If you want to find out about properties with delinquent taxes, the county assessor’s office is the place to find out. You can find any county assessor's office address and phone simply by looking online. If you need an attorney to help you incorporate, or an accountant to help you make financial decisions, you can look them up very easily too. Want to find houses or commercial properties that are bargain priced? Try driving around and looking at buildings with For Sale signs in front of them and either pick up the free flyers or call the number on the sign. Or take a tour of the many websites showcasing real estate for sale.

Watch a few episodes of the TV show, Flip This House and others like it.Yes, a person can make money investing in real estate. It takes some research, planning and perhaps some physical labor. Most people who have made money this way figured it out without spending tens of thousands to attend workshops. Use your tens of thousands to actually invest.

Some people think that these things are worth attending because you get some bits of wisdom and inspiration from them even without buying the bigger packages. Some of the speakers were good, entertaining speakers, but none of them was worth a whole day of my time. This is the price we pay for our education sometimes.

The popularity of these workshops is all based on the fear factor. Nobody wants to look forward to a miserable life where you may become homeless or eat dog food in order to survive, and these speakers will stoop lower than low to try and separate you from your wallet.

But by using your own common sense, books that are readily available in bookstores and libraries, information on the Internet, some creative thinking and looking for opportunities, a person could increase their income without forking over tens of thousands of dollars to the hustlers and shills coming to your town with the most recent wealth building seminar. These carnivals are the modern day freak shows featuring speakers promising that you can get rich quick are somewhat entertaining and do offer a few bits of information. But if you sign up for everything they offer, the only one guaranteed to get rich off these seminars are the people sponsoring them.

As we actually examined some of what was being taught, there were some good ideas, but they were mixed in with some of questionable legality and some that were just plain jaw dropping. What comes to mind was one talk where the speaker laid out a plan to make money leasing properties. The thing is, if you simply pulled out your little calculator and did the numbers, it would be a great deal for the person selling it, but would never add up to a good deal for the person buying it.

I am a capitalist, and I am motivated by love. A person can make money by being ethical and honest, working hard, making smart investments and looking for good deals. There will always be opportunities. We just have to decide when and how to go about them and which opportunities to take and which ones to leave. There still is no free lunch and any deal that sounds too good to be true probably is.

Above all, there is this metaphysical axiom: All things come from either love or fear. Choose love.

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