As you might remember in my last post I was beginning to get into why I decided to broaden my investing horizons and what I decided to broaden my investing horizons into. I had also gone over some key requirements for the type of investing I was looking to do. I want to briefly review those here.
- 100% control over where I invested
- 100% control over what I could invest in
- 100% ability to mitigate the known risk in the investment
- Have that investment INSURED against loss and damages
- Have the ability to hedge against the market utilizing my own methods. Methods I felt would protect me, not the interest of someone else whose whole career was based on keeping my investment with them.
- Work with an adviser whose SOLE purpose was to make me wealthy... myself
- Invest in something simplistic yet powerful
- Know that my investments were making my community, town, city, state and even nation a better place to live and creating jobs....
Now there are many different assets out there for me, and you to invest in. There are many different vehicles to use to get you where you want to be. First I want to establish a firm foundation and basis of understanding between you and I when I speak of certain terms. The first here is assets. What is an asset? We have heard that our personal homes, the ones we live in are our "greatest asset". When you go to fill out a loan with a bank and the bank is determining your DTI (Debt To Income) and your assets and liabilities they provide to sections. Now in the assets and liabilities columns you are able to list the same item on both sides. On the asset side you can list the current value of the asset. If that asset carries debt, then you simply add the amount of debt carried by that asset to the debt column. In the end what you have is your Net Worth. The problem is this violates what an asset truly is. I believe Robert Kiyosaki explains it best in his book, "Rich Dad, Poor Dad" as "... an asset is anything that you acquire that puts money into your pocket. Assets are what the rich use to generate wealth over time..." As you may be able to understand, according to this definition, an asset is most definitely what we have been trained to classify it as. By purely using this definition, almost everything we have that we would consider an asset, probably is not. So now the question was, what assets are true assets according to this philosophy? Of course you have your common typical assets broken down into three main markets. When we speak of markets, such as "Ohhh the market took a nose dive yesterday" we automatically assume that person is speaking about the STOCK market. However there is also the REAL ESTATE market, and even the BUSINESS market (in this reference I us business market to simply refer to the purchasing and selling of business's). So now I had to find which one of these markets I wanted to invest in, and what assets within that market I wanted to hold.
Now please remember I was still in the military at this time. Mid 2011, and I was seeking for a way to invest, passively, and where I could invest while I was stationed or deployed anywhere in the world. This automatically knocked out two asset classes. The BUSINESS and the REAL ESTATE markets, right? I mean I cannot start or buy a business while over seas right? It would fall apart and be a complete waste of money! So I started looking at Real Estate, but there is so much work and the time requirement for my career in the military took ALOT of time. This was while I was in the states, not counting my time over seas. So I looked into the stock market. But if you'll read my requirements, as mentioned above, the stock market could not meet those requires, for me anyway. So now what? How could I build my families generational wealth, still do what I loved (being in Special Forces) and do this remotely? To invest in the stock market over seas or remotely is fairly simplistic, I had met alot of military personnel who did this. My problem was the stress of possibly losing all my money when the market changed in a mere matter of seconds, combined with the stress of fighting the Taliban and Al-Qaeda in Afghanistan, was to much for me. I had enough on my plate! So I continued to search and research what was available.
This is when Is tumbled across an incredible investment vehicle! The Private Lending business! This was a business I could do anywhere. I could do this remotely, I was not geographically confined. There are licensed professionals that handle every aspect of this business. I would simply become a manager of people, which is something I already did.
In the next post I'll share with you how I began and my path down private mortgage investing!