Millionaire Real Estate Investor: MythUnderstandings

by: Brian.Brady on October 18, 2007 21:46:58 Leave a comment »

A Millionaire Real Estate Lender is a mortgage advisor who knows how to help Millionaire Real Estate Investors build their net worth. Recommending appropriate loan solutions, for aggressive investors in the wealth acquisition stage of their life, has been a strength of mine since I started my lending career. I draw upon my background as a securities broker, apply suitability principles, and integrate the loan into a financial plan. This series will deal with the principles taught in Gary Keller's book, The Millionaire Real Estate Investor.

The Chapter about MythUnderstanding will be broken into two parts: Personal Myths and Investing Myths. The author created the word "mythunderstanding" because these fallacies are part myth and part misunderstanding.

The Three MythUnderstandings About the Way People View Themselves as Potential Investors:

1- Your job will take care of your financial wealth. This is perhaps the most common misconception among most people. I wrote a story about the World War Two generation (sometimes called the Greatest Generation) called Depression Economics:

The rules are entirely different today. You see, the federal government, under the leadership of President Roosevelt, moved towards a paternalistic economy. When the veterans came home from Japan and Europe in the 40s, the US government provided them with a free education under the GI Bill. The country was beginning an arms race with the Soviets that required massive government investment in the defense industry. President Eisenhower coined the phrase "Military Industrial Complex" and warned us of our reliance on it. Skilled work in Southern California was a plenty during the 50s, 60s, and 70s. The employers mirrored the paternalistic nature of the government and provided good paying jobs with fantastic benefits.

Yoour job is NOT your financial wealth. In fact, the overload of the Social Security system and Medicare, by the baby boomers, will do two things: demand that you provide for your own retirement and adopt an investment strategy that avoids government confiscation of retirement assets through taxation. Relying on your employer or your government to provide for your retirement is both naive and dangerous. Survival will dictate that investors under 50 take charge of their financial well-being today.

2- I'm not motivated by money (or money can't buy me happiness). The author does an excellent job of pointing out that people have faulty perspectives about wealth that comes from a misalignment of their REAL goals. He suggests that potential investors think of all the things they might do if money were no object (dream) and think of how wonderful it would be to achieve those dreams.

A schoolteacher, whom I advise, was stuck in the "money can't buy happiness" paradigm until he redefined happiness as it relates to his potential to solve societal problems. Armed with the possibility of starting a private school with an emphasis on bi-lingual education, this investor aggressively learned how to "play the game" and set his sights higher. Today, he is over 50% of the way to his goal of establishing his school. Investments Broker, Jeff Brown, refers to this as a "Purposeful Plan"

3- I'm not able to do it. Perhaps the most depressing mythunderstanding is this one. It represents the "beaten down by life" attitude that so many of us adopt after the first ten or fifteen years in the workforce. Rather than fill you up with a pep talk, I'll point out that most millionaire real estate investors come from this limiting belief. Tragedy or dramatic life events disctate the necessity of change that drives them to "believe".

How often do we hear of the dock worker who is permanently disabled, whose spouse rises from meager means and education to accumulate a seven-figure net-worth? My only advice is that it doesn't take a tragedy to start conceiving a different lifestyle and asking for the help of professional advisers.

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