The James Dicks Blog

I’ve noticed recently that we seem to be worrying about everything.  Yes, the past year has been tough on a lot of people and a lot of businesses. We agonize about the current state of the economy, we are concerned about the horrific possibility of terrorism in our local communities, we worry about whether we’ll be ready for retirement, and we are very concerned about how our children will fair in this highly demanding and , at times, difficult world. 

I usually find that if I’m not certain of where I’m going or how I’m getting there, I will tend to have more concerns than if I actively sit down and plan for the future.  We hear on the financial news programs every day that investors are “worried” about a variety of things that will move the markets lower.  What’s the point?!  Let’s start planning our personal situations and stop creating the anxiety.  The summer months are over and we are now preparing for autumn and the changing colors of the trees, feeling a nip in the air, and the smells of the season from cinnamon to evergreen.  I don’t know about you but I think this is a great time of year.  

Sure, there are some challenges ahead which could complicate our national and personal finances.  The negative scenarios that the U.S. economy is pushing through today along with the ever-increasing cost of energy could certainly cause a drain on our personal finances and put tension on the retail sector as well as pressuring the trade gap.  But there’s not a lot we can do personally to generate solutions for these hot topics.  The one thing we can do to sustain our personal “corner of the world” is to develop a positive and constructive attitude.  It really does help.  When you decide to carve out your personal path using even a small amount of confidence, you can’t help but develop the belief that you can succeed at anything you set out to do, no matter what the odds.  Believe me, I’ve done it. 

Positive thoughts and actions create positive results. If you have the wrong attitude then your trading could also be affected.  Doing anything with the wrong attitude will lead you in a direction that will be a burden rather than a blessing.  Individually, things can be tough to deal with but collectively – as an encouraging population – we can do anything.  As we approach the final quarter of the year, I’m hopeful for the months ahead and I hope you are too.  We’ve proven this factor in the past and I have no doubt that we will bear it out again in the future. Become proactive and cheerful by developing your attainable goals while staying focused on the situation(s) at hand.

The improvement of anything you do in life requires you to get the education you need, whether formal or informal.  If you feel like you need to improve your personal investing skills why not find a trading group in your local area and work with others to perfect your skills or take a formal class.  You’ve heard me say it before – it’s all about education.  If you are learning to play golf, I’m sure you have to practice.  If you are trying to master algebra, you have to study.  The same is true for an effective and profitable financial life.  Never give up! Determine your direction, get educated and you will get results! 

Happy trading!

I practice what I preach and I preach diversification.  The answer to keeping your financial head above water in this unpredictable market is all about diversification.  That doesn’t mean to spread your investment opportunities simply over a number of stocks or within a few commercial sectors.  It means to broaden your investment opportunities over a wide variety of investment vehicles.  What you ultimately invest in is entirely up to you but you must always be sure that you are involved in a number of investment mediums.

For instance, while a certain amount of your portfolio will, no doubt, be invested in the equity market, you should also be involved in other areas of opportunity like commodities, options, bonds, real estate, and you should also consider the Forex (foreign exchange) market.  The Forex offers you another method of diversifying your investment strategy to protect your financial future.  I advise you to consider the potential benefits of the Forex and invite you to learn all you can about this unique method of investing.  One way to learn is to get a copy of my best selling book, Forex Made Easy…6 Ways to Trade the Dollar.  I wrote the book to be very investor-friendly and it will help you understand the Forex market and how to trade it.  It’s actually very simple and that’s why I like it so much.  The way I trade the currency markets only involves the U.S. dollar against six other major world currencies. That’s it!  Not 40,000 or more stocks or mutual funds…just six currencies!  I like that kind of simplicity.

Plus, if you are considering investing in the stock markets, you might want to consider issues that offer dividends with yields that exceed the 2.5% mark.  That’s probably much better than yield you can get at your local bank.  Check out companies that are showing brisk growth in such industries like the financial, energy or consumer sectors. Just do your homework and you’ll find something that will fit the mold and desired direction of your portfolio.

Determine what types of investments make you most comfortable and which investments make you uneasy.  If you have trouble sleeping at night because you’re worried about your investments then you shouldn’t be there.  Educate yourself daily through various media sources available to you; books, magazines, the Internet, television and radio.  Go to workshops and perhaps consider taking a class at the local college.  Always practice trading on paper before you invest any of your hard earned dollars in anything you are not familiar with. 

Listen, these are some extremely volatile days.  It seems like the financial markets have tried to maintain some kind of balance but recently this hasn’t been all that successful on a global basis.  Political rhetoric, deep concerns about the world’s economy, the growing federal budget deficit, and the daily fears of terrorism around the world has taken its toll on all of us over the past couple of years but now is the time to rebuild.  You should always keep in mind that no matter what the Dow is doing, no matter how the NASDAQ is trading, there are always investment opportunities that are increasing in value.  Just remember to always practice the one method of cutting the odds of losing your valuable investment dollars.  Assure that your portfolio is as diversified as possible. 

You’ve probably heard about how to make the most of your time through proper time management your entire professional career.  I ran head first into a project the other day that suddenly made me realize that appropriate time management techniques didn’t just help me get through my busy day – but it also helped others.  If I could effectively answer requests on time or ahead of schedule, those requesting the information would also be able to better handle their time more efficiently.

I know, most of us just think we’re much too busy these days and if we had more time in the day we could handle all of our tasks more easily and on time.  But you know, we all have the same amount of time; and some are very good at managing our daily 24 hours while others are just pitiful.

It’s a common error of many new managers to believe they can accomplish the job more efficiently on their own.  I learned a long time ago that it is much more important to train others in the organization in a specific task and then delegate.  It will do wonders for your peace of mind and for the successful completion of the task. Plus, training and delegation is important to develop a solid team spirit within the organization. 

So, where do you start? I guess the first step is accepting the fact that you could do much better when handling your time.  Don’t waste a moment during the day.  Start by;

-         Getting back to basics and write up your daily, weekly and monthly “to do” lists.  Knowing what you have to do and prioritizing the tasks is half the battle.

-         Set a deadline for each task

-         Determine which projects will you delegate and which you will do yourself

-         Make a list of the individuals who can help you complete each task…who is the right person for the job?

-         Schedule the work to be done, assign it to the person(s) involved and then move on to the next project. 

Remember, corporate management is always looking for the professional employees who can handle the job in the eight hours allotted each day.  If your deadlines are constantly being pushed forward to a later date, then how effective are you perceived to be by the corporate elite…also known as your boss.  It’s understandable that in these volatile times, as we approach 10 percent unemployment, people would want to “look” busy for obvious reasons.  But better than being busy is being productive…being creative….being efficient.  The proper management of your time (and the time of your subordinates) will help you and your company locate a path to success. 

In today’s challenging business environment, we are all being asked to accomplish more with less – fewer dollars, and, at times, fewer people.  That’s why the proper management of your time has never been more important. And remember, just because YOU think you are too busy doesn’t necessarily mean you actually are too busy.

You have a choice of how you accomplish your daily schedule but before you even start, prioritize, delegate, schedule and make it happen.  There will be some things that just didn’t seem to be important yesterday that will move to the top of the list today.  And others will disappear completely or get pushed to the back of the priority list.  Today’s daily calendar must be fluid and changeable.  We all must be prepared to turn 180 degrees at a moment’s notice, if the situation calls for it; just keep your eyes and your mind opened to the changing situation and adjust, when necessary.

Take control of your time, starting today.  Your personal level of “busy-ness” will affect your professional life and the professional lives of those around you who you are tasked to support. Remember, what you do (or don’t do) affects others. Begin taking on a creative approach to getting your job done.  Your proper approach to time management has never been more important.

Whenever I speak to customers and investors at my conferences or while traveling I always seem to get the same sort of objections.  I am always telling people how I am no different than anyone else; I made money and I lost money, more than once.  The difference is….I learn from my mistakes and the next time I don’t make the same mistake. 

One of the most profitable times in my life was during my dedicated real estate career; I say that because, at the time, that is all I did.  That period also taught me about diversification and the importance of good money management, but that is another story.  Anyway, during this time (the late 90′s) I began to invest in real estate.  The market was a good buyers market so there were lots of opportunities, however interest rates were a little higher and I had pretty bad credit.  As I was growing up through high school and after my graduation, I didn’t maintain my credit as I should have.  Contrary to what people believe, think or say, you can fix your credit. I did but it took many years.  I was able to eliminate all the bad and replace it with all good. Yet again, that’s another story but you can do that to.

As far as this story goes, I identified a great place to make money in the real estate market place, most specifically rentals, and investor rehabs.  The problem was I didn’t have any extra cash and poor credit. So, I set out to accomplish my goal. I had to use private money; in fact I was paying interest as high as 18%, one year notes and five points.  Yikes, you say.  Me too!

The difference was this; if you aren’t putting any money down or little money down then your return is infinite regardless of what you are paying for the use of the money.  I always get the terms of the money first then I look for a deal that fits within those parameters.  That way I can still make money paying whatever the terms are.  That’s what I did.

I bought literally hundreds of properties and then started buying multi-family properties.  As I have written before, you need to move the ball along.  I was able to eventually find better pricing that was still high but not as high.  The point of all this is to show you that credit and using private money is a possibility that you can consider and today’s financial landscape offers a great opportunity to go out and find deals.

Let’s talk about no money down deals and better yet getting money back. First, there are lots of them out there. Maybe not as many no money down deals as in the past but certainly little to no money down deals are still available.  When I first started out I was able to do a lot of deals that actually paid me when I closed.  The key is to find someone that will deal with you.  Do your homework and keep moving the ball forward. 

It’s here the next great cycle in real estate.  If you want to make some money in real estate then now is probably the time to think about getting in.  I have been investing in real estate for nearly 20 years, and my family has been in the business for a lot longer than that.  I have personally invested through several cycles and have seen many more.

It seems that the real estate market runs in cycles, about five to ten years.  We just got through a big one where everything was going up.  Homeownership in the U.S. has risen to nearly 70 percent.  Now we are on the down side and we are already near homeownership levels of 1985.  The time for rentals is back.

But what you will see is that most of the apartment buildings that sprung up during the last great rental period have converted to condos, and thus have started to experience foreclosure.  Today we are facing a huge inventory of foreclosed properties, and all of the people that lived in those properties will be looking for places to live.  Why not in your condo or home?

The next great real estate cycle is now at your feet.  When is the best time to get into the real estate rental market?  How about when interest rates are low and prices are even lower?  Ah…..would that be now?  I think so.  Now what we have to do is get creative and we have to find out how to get into the market using leverage or better yet – cash.  I personally have begun a life of living debt free, I simply believe that cash is king and credit will enslave you.  However, with that said, leverage and finance have their place and you may not be able to run out and pay cash for your next rental property.

There is no question that buying bank-owned properties for cash will get you the best deals, but banks are now more motivated than ever before to get real estate they own off their books.  They are motivated by their own business model and oversight by the federal government.  So, these banks are more willing to loan you money now than ever before.  Laugh out loud if you will but it is in their best interest to do so.  You can get creative and work some pretty good deals out with them and they will be the bank.  It is better for them to loan you the money on the house than to have the bank sit on it.

The way this cycle will work is that you can go out buy a house or a condo for dirt cheap prices – I mean 30 cents on the dollar.  Remember that the real estate market will run in cycles (trends, if you will).  On average a typical home in the U.S. will double in value every eight to ten years.  And we saw that prior to the last pull back.  If you bought or buy at the end of the cycle you can get hurt, so we buy our home now when prices are at an all time lows; we rent the home and start using the strategy in which we pay extra principal payments.  With interest rates so low you should be able to have enough extra principal payments that will allow you to pay this home off in eight to ten years. 

You are then sitting on a piece of property that is 100 percent cash flowing, even if the market pulls back again you will still have cash coming in with little overhead which will allow you to make the next cycle.  But this is the best part, let’s say you buy a home for 50 cents on the dollar.  Say a $200 thousand home that in today’s value is $100 thousand. Believe me, you can get them for far less today.  Over the next 10 years you pay it off and the value of the home increases to nearly $400 thousand.  But you own it free and clear; so let’s say you have another correction.  It would have to go a long way down before it really starts to affect you because you own it free and clear.  Even if it went back to 10 year lows you still have equity to pull out. 

On a side note you can always get a mortgage or refinance later and pull cash out to invest tax free later.  Although this is not a debt free type of mentality, there are circumstances when leveraging money will be to your advantage.

With all that said, keep looking for more articles from me on this subject as I am personally doing this.  I love real estate as a way of diversification and now is the time to make your next fortune in real estate.

Happy investing,

James Dicks