Lessons from The Force

Lessons from The Force

When most people learn that I formerly was a police officer, they raise their eyebrows and will usually say something like, “Really?  Why would you quit?”

To most, the idea of being a police officer has an exotic feel to it.  It’s because they have envisioned the Hollywood cliché of law enforcement – heroic exploits of men and women in a daily struggle against crime and corruption.  While there are some of those moments on the street, that’s not what happens behind the scenes within the department.  Most of the stuff that happens is boring, day-to-day decisions just like you have at your job. 

Who do I want to work with? 
Am I correctly filling out this new paperwork?
What educational path should I pursue for my career?
Where should I go to lunch?

Most of that’s not interesting to share.

However, why I got into law enforcement, what I learned about it and personal finance, and why I eventually left are things I believe are worth sharing.

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What are the Poor Four?  And are They Keeping You from Being Wealthy?

What are the Poor Four?  And are They Keeping You from Being Wealthy?

I read the most astounding paragraph in the June 19th, 2018 edition of USA Today.  In Wealth of Millionaires Surges 10.6% to top $70 Trillion for the First Time, David Carrig was reporting on the World Wealth Report 2018 recently released from global consulting firm Capgemini.  It was the third paragraph of the article that really caught my attention,

The number of high net worth individuals (HNWI) – which Capgemini defines as those having investable assets of $1 million or more excluding primary residence, collectibles, consumables and consumer durables – grew almost 10 percent, or 1.6 million to 18.1 million in 2017.

After reading the title of the article, I wondered if this was supposed to be a shocking paragraph?  Was it something to get the readership wound up enough to raise their collective fist in anger and yell, “Life’s unfair?”

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You Don't Buy Things With Money

You Don't Buy Things With Money

I was recently talking with a colleague who said he was close to retiring.  Gil (not his real name) is in his early fifties and slightly quirky.  He’s the type of guy who marches to the beat of his own drummer.  Although he works for a large, corporate-think company, he sports a long beard and tattoos.  He’ll freely talk about politics and other matters that most folks would shy away from.  With his wife, he lives in the country – far away from the hustle and bustle of society.

It had been a while since I talked with Gil so his mention of retirement was exciting.  I told him congratulations.  He said he was more than ten years ahead of what society had scheduled for his retirement, mostly because he’d been debt free, including his home, for many years.  He’s got a rental house which has some debt on it, but that payment is being covered by someone else.

I loved hearing he was free of consumer debt and asked him what led him to that point.  Almost everyone who is debt-free has a story about a moment of awakening to the soul crushing weight of financial liability.  Gil said he got himself into a position to retire, based upon some advice he was given when he was young.  Gil said once he fully grasped that concept, his life changed.

Being on a quest for knowledge that can help me grow, I immediately asked, “What was it?”

The advice, he said, was, “You don’t buy things with money, you buy them with time.”

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I am Deeply in Debt and I Feel Fine

I am Deeply in Debt and I Feel Fine

I read an article recently wherein the writer stated that all debt is bad.  I paused on his stance and reflected for a bit.  It seemed extremely militant.  I’m not saying the author can’t take that position, it’s just that I don’t agree with him.

I battled consumer debt for many years before I finally cleaned up my act.  I’m not perfect now by any stretch of the imagination, but I’m doing a heck of a lot better.

Part of my growth was getting a better understanding of debt - on how to use it and when to avoid it.

I don’t hate, nor do I love, debt.  It took me some time to get comfortable with what debt is and how I could use it properly.

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Amortization 101 - #3 - The Greatest Trick Ever Pulled

Amortization 101 - #3 - The Greatest Trick Ever Pulled

The Difference Between Residential and Commercial Loans

The majority of my previous two posts have focused on home loans and how the game isn't in our favor while most of the population is tuned out.

Guess what?   It's the same in the commercial arena and no one notices it there either. 

Here's the main difference between the two loan categories:  Commercial loans will be amortized over a certain period, 20 or 25 years, for example.   However, they typically require a balloon payment at some fixed point, way before the end of the amortization period.  10 years, for example.

Take that in to consideration for a moment.

In ten years, you either need to come up with all the money owed to the bank or refinance.  At 10 years, you will have paid roughly 70% of the total interest owned on a 20 year loan.  Time to refinance.  

Do you see the scam?

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I Was Broke Because I Wanted To Be

I Was Broke Because I Wanted To Be

In early 2009, a broker friend of mine asked if I was ready to start investing in commercial real estate.  I was a property manager at the time and my personal finances were a mess.  Unfortunately, I had to wait and told him to think about me the next time around.  I had a burning desire to be in a real estate deal and realized there was only one thing I could do to get there: grow up.

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Growing your wealth? Manage your perspective.

Growing your wealth?  Manage your perspective.

I would like to think I was smart when I was 27 years-old.  I had already served four years in the military, earned a degree from a state university and had just entered the real estate world as an executive assistant earning a whopping $20,000 / annually.  Okay, I didn’t blow the doors off with my starting salary, but I was excited to be learning the real estate game.

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