Happy Independence Day!

Independence. Freedom. These are values that all Americans support. As investors, we believe that freedom includes financial freedom - the freedom to live our life as we choose because there is enough financial security to do so.

But exactly what is financial freedom, financial independence? And how do we attain it?

If you are like me, summer is a wonderful time to catch up on more reading on topics of interest. So here is another book recommendation for you, dear Blog Readers: Lifeonanaire: Real Prosperity by Steve Cook and Shaun McCloskey.

"Life -onaire," like "millionaire," but with the emphasis on LIFE, rather than money.

Lifeonaire is the subject of some special training that the Real Estate Association of Puget Sound will offer this month to its real estate investor members in a special three-day retreat. For more information, go to www.reapsweb.com

The book itself is written in the form of a story, taking its characters on a journey of financial self-discovery. The premise is that debt enslaves the borrower, and to truly live a prosperous, abundant and financially free life, one must focus on the things in life that are most important. Too much time may be spent chasing after money, instead of after one's passions. Simplify and de-clutter your life. Focus on what you want. Do not believe everything about the American dream.

My favorite quote on money and happiness comes (not from this book, but) from Jonathan Haidt:

“Those who think money can't buy happiness just don't know where to shop … People would be happier and healthier if they took more time off and spent it with their family and friends, yet America has long been heading in the opposite direction. People would be happier if they reduced their commuting time, even if it meant living in smaller houses, yet American trends are toward even larger houses and ever longer commutes. People would be happier and healthier if they took longer vacations even if that meant earning less, yet vacation times are shrinking in the United States, and in Europe as well. People would be happier, and in the long run and wealthier, if they bought basic functional appliances, automobiles, and wristwatches, and invested the money they saved for future consumption; yet, Americans and in particular spend almost everything they have – and sometimes more – on goods for present consumption, often paying a large premium for designer names and superfluous features.” 
― Jonathan Haidt, The Happiness Hypothesis: Finding Modern Truth in Ancient Wisdom

Happy Fourth of July!

Abundance and Prosperity

abundance: plentifulness of the good things of life; prosperity.

prosperity: the state of being prosperous.

synonyms: success, profitability, affluence, wealth, opulence, luxury, the good life, milk and honey, (good) fortune, ease, plenty, comfort, security, well-being

Have you ever heard that you should not mix business with pleasure?

Well, why not? What if your business actually was your pleasure (or one of your pleasures)?

I believe that is possible. And so do the upcoming speakers at the Real Estate Association of Puget Sound (REAPS). Why?

Because we live that vision almost daily.

See, I believe that you probably became a real estate investor or an entrepreneur because you thought it would create something different in the way that you live your life, your lifestyle.

Some of you have found it, while many of you are thinking that real estate investing seems to consume just as much if not more of your time as your job! Even without the "security" of a consistent paycheck.

Believe it or not, there are likely to be habits that you are practicing from your past way of life that are getting in the way of your success at whatever entrepreneurial pursuit you may have now.

Bad habits, like procrastination, distractions, lack of focus, busy work, lack of belief in success, may be self-limiting. You may be spending time with negativity, or with people that do not believe in you.

Good habits like clear goal-setting, focus on income-producing activity, balance in all important aspects of your life, and a success-oriented mindset are what are necessary to succeed. Surround yourself with like-minded people, and refuse to follow the herd.

A purely economic or financial focus may be detrimental or other important aspects of your lifestyle, whether physical health, spiritual or social relationships. I am excited to hear more from the Lifeonaire experts who will be speaking at the REAPS May meeting, as they preach that lifestyle is an important consideration in anyone's personal pursuits. A balanced approach to life may result in an increase in both prosperity, abundance and happiness. And isn't that a worthy goal?

May you lead a happy and abundant life!

Happy Investing!

Giving Back

Service Above Self

That is the Rotary motto, and our University District Rotary Club exemplifies its spirit. I just returned from a weekend in Vancouver, British Columbia with the Rotary District 5030 clubs - of which our club is a member. My neighbor and landlord Ezra Teshome was this year's District Governor, and he is pictured here addressing this weekend's district conference.

Ezra has been personally responsible for eradicating the disease of polio in his native country of Ethiopia, leading trips of Rotarians to immunize children there every year for twenty years. Only three countries in the world have not eliminated the disease - Nigeria, Afghanistan and Pakistan. Until they do, the world is not safe. Rotary has led the effort to eradicate polio, in partnership with many others, including the Bill and Melinda Gates Foundation. Bill Gates Sr came up from Seattle on Saturday night to address our Rotary conference on this topic. I learned the world is "this close" to eliminating polio.

I learned from the many other speakers in plenary and break-out sessions this weekend, that Rotary has changed lives around the world. Rotarians who funded an infant girl to get the surgeries she needed to grow up and walk again on prosthetic legs; the many villages in Guatemala, Mexico, and across Africa that have clean drinking water and new school houses thanks to Rotary; the disabled children in Nepal who are given dignity and wheelchairs; the children in poor communities here and abroad that have safe playgrounds built with Rotary dollars; the Rotarians who funded a 12-year old boys plans to end child slavery around the globe. Rotarians are changing the world through these acts of service above self.

And in this blog by and about real estate investors, the goal is to leave the world a better place for our having lived here. To learn to build community through ethical investment, and through compassion for those whose lives are being changed. To have the ability to "give back" after profiting from one's life work. This is truly to have lived, and lived well.

Happy investing.

Financial Freedom

You want to have enough money to have the freedom to do whatever you want in life.

Dan Kennedy's chief marketing trainer Dave Dee asked an audience recently what they wanted with the freedom they desired, and here is what they said:

• Work for yourself and avoid having to work for anyone else
• Give back.
• Work less and “play” more
• Spend more time with your family.
• Help other people live better.
• Travel more.

But although many people may desire these things, they do not always achieve them. Having a wish list does not mean that these desired outcomes will be achieved.

The difference between those who do and those who don't achieve the success that comes with financial freedom has to do with linking your goals to your desired outcomes.

For example, work for yourself. In what industry? working how many hours per week? with how many employees? providing what unique service? what financial goal do you need to hit to leave your current job? how much money do you need in savings?

When I came back from my last wage-earning job in Tampa, Florida, I figured it was a good time to start my own business. That is when I got started in real estate investing.

 Spend more time with your family. How often? with whom? what kinds of things will you do together?

My son is particularly difficult to schedule, so I try to plan an evening outing or a dinner once every couple of weeks with him.

Travel more. How often? Where? What kind of budget? Adventure travel in a tent? or 5-star luxury?

I started a side business in the travel industry to feed my personal love of travel. I get deep discounts on travel, and can help other people live better by earning income for starting their own travel business.

So by linking specific goals to desired outcomes, you are more likely to achieve the success and financial freedom that you crave.

Happy Investing!

Seattle Real Estate Investment Market

Regional Overview

The subject property of this week's blog, 4354 S Henderson Street, is located within the City of Seattle. Following is a brief overview of the regional economy and real estate markets.

The Puget Sound Region (sometimes referred to as the Greater Seattle Area) is comprised of four counties: King County (whose major cities include Seattle, Bellevue, Federal Way, Kent, Shoreline, Renton, Redmond and Kirkland ); Kitsap County (Bremerton and Bainbridge Island); Pierce County (Tacoma, Lakewood, and Puyallup); and Snohomish County (Everett, Edmonds, and Lynwood).

Compared with the volatility of the national economy, the region has seen steady, if modest improvement over the past few years. This has been driven in no small part by robust hiring at a few companies, including Amazon, Microsoft, and Boeing.

Much of the rest of the job growth has been in the lower wage categories.

The region’s economy is still regarded as structurally sound and has outperformed the national level.

In terms of commercial real estate, apartments are in the ascendant phase of the cycle, but this expansion is primarily focused on the best, close-in locations. Investment in commercial real estate has improved in the Class A Core category of most product types, and there have been a few more motivated sales at fifty cents on the dollar, but the middle of the market is stagnant and almost un-financeable. The region is one of the top ten markets on the institutional buyers’ lists; there is just not much product available for sale at this time.

The current economic situation aside, the region continues to rank in the top ten national investment markets in several asset classes. Commercial real estate buyers’ longer-term view of the dynamics of the market is generally positive. Institutional investors returned to the market starting in early 2010 with numerous large Class A core property sales closing through the year. As with the national focus, apartments and stabilized Class A office projects are at the top of the list, followed by industrial and anchored retail. Interest falls off moving down in the markets by asset quality until reaching the distressed level, which has also seen an increase in sales activity for office properties.

Apartments became feasible in this vacuum as the end to sub-prime lending resulted in fewer potential buyers and concern about price durability kept more out of the buying market. Rental rates for apartments jumped up by 30-40% between 2004 and 2008. However, the combination of new inventory, 10,000 new units in 2009 and 2010, a burgeoning shadow market of condominiums and houses for rent and lax demand combined to increase vacancy and push rent discounts through most of 2009. Institutional investors returned to the market with a vengeance in 2010 with over a dozen major sales and capitalization rates back to the 5.0% range for close-in newer vintage properties.

Vacancy in the apartment market fell much faster than anticipated and the regional rate is already below the 5% mark and moving lower. One of the largest rent increases in the Seattle metro area in 2013 occurred in South Seattle (7%).

The demand has been attributed to both reduced access to home mortgages and also longer-term lack of confidence in home buying in general.

Fundamentally, most product types are still attractive long-term investments in the Puget Sound region, and local buyers have remained fairly active for small or owner/user properties.

Happy Investing!

A Life of Abundance

Having just returned from a cruise in the Gulf of Mexico, from New Orleans to the Yucatan peninsula to explore Mayan ruins and swim with the dolphins, I am prone to reflect on what it means to have a life of abundance.

Surely, life is meant to be full of joy, delight, wonderment, and curiosity - not at the expense of others, but in harmony with them and with the planet. From the literature I reviewed in yesterday's blog, "success" in terms of an abundant and prosperous life means having an attitude of appreciation, of gratitude, and of optimism. Much of the literature has to do with eliminating negative thoughts and attitudes, in order to open the mind to possibilities.

For me, nothing does this quite like taking a break from day-to-day activities, often in the form of travel to unfamiliar places. When I vacation, my mind empties of the daily stresses and I am more fully present in my new environment. Vacation travel allows us not only to explore the world, but to explore ourselves, to question the habits that we form, and to realize there are other ways of being. Focusing on something new and different allows for reflection and creativity. It is in times like these that we are more open to experimentation and innovation.

Certainly travel can be educational and inspirational. For most of my life, I have been fascinated by lost civilizations, archaeology, ancient works of art and technology - including the ancient Mayan ruins, particularly those of Chichen Itsa, which I was able to explore on this trip. How did the ancient Mayans, without metal tools, modern technology or the wheel create these stupendous monuments, develop a highly sophisticated system of writing and numerology, an accurate calendar, and a deep understanding of astronomy?

Part of the enjoyment of an international trip is the opportunity to experience another culture, both for its educational value and for the possibility of better international understanding (perhaps even a step towards world peace?). Mayan foods, language and culture survive in many ways in the Mexican culture of today. I was fortunate enough to do my travel just prior to the Mexican celebration of Dia de los Muertes.

This trip also involved interaction with anther highly intelligent and gentle species, an animal as big as I am, that lives in an aquatic environment very unlike my own. Traveling over a thousand miles of salt water in just one gulf gave me a better understanding of the planet on which we live, and a love for all of the life it harbors.

In addition, I was reminded in my reading, to cultivate additional streams of income, in order to enjoy greater financial security. This is one reason why I joined World Ventures, a network-marketing travel company that allowed me to go on this trip at a deeply discounted price. It allows me to indulge my love of travel, while generating an additional income stream from sharing those vacation benefits with others. I love the product, I love the concept, and it works for me. Do what you love, the money will follow - another concept from the Prosperity Classics.

Work hard, play hard. Make a life, living!

Happy investing!

On Prosperity

Dear Blog Readers:
You may have missed my blog this past week, when I was on vacation, cruising in the Gulf of Mexico. My sister has asked me to post more narrative about that trip, but I will save that for a later blog. One of the joys of a long journey is the opportunity to catch up on reading materials. Heretofore, is my summary of a great read on prosperity by Tom Butler-Bowdon, entitled "50 Prosperity Classics."

It is a great compilation of wisdom from the best books on wealth creation and abundance highlighting noted authors and captains of industry such as Richard Branson, Warren Buffett, Andrew Carnegie, Milton Friedman, Bill Gates, Napoleon Hill, Conrad Hilton, Robert Kiyosaki, Adam Smith and Donald Trump.

After reading summaries of 50 great pieces of literature on the topic of prosperity - how to attract, create, manage and share it - there are several themes that stand out. Many of the ones that appealed to me will be summarized here, but the author also includes a four-page summary at the back of this book of the principles of prosperity that he gleaned from his research.

Some of those highlights include:

• Prosperity is more than wealth. Wealth is the accumulation of monetary assets. Prosperity has more to do with thriving and enjoying an abundant life in all of its manifestations.
• Having a big "why." It is better to think big, than to think small. Thoughts allow us to imagine opportunities, services and products that do not exist now. Indeed, all new innovations arise from this creative thought process.
• The most successful innovations are those that serve the consumer, that serve others.
• Definiteness of purpose is essential to the success of the wealth creator. It banishes fear, enables the creator to overcome obstacles, and inspires the help of others.
• Do more than is expected of you, go the extra mile. Great fortunes have been made by extraordinary effort with no guarantee of gain.
• Gratitude is the key to an abundant life, as it attracts more of what you appreciate.
• "Ask and ye shall receive." Be very clear and specific about what you want. Visualize having received what you want, believing acting and speaking as though you have already achieved your goals, and according to the law of attraction, those desires will manifest to you.
• The fear of failure is the greatest obstacle to success.
• Don't be afraid to be different.
• The seed of entrepreneurship is to be in control of your own destiny. Wealthy people create money-producing systems.
• Have many sources of income. Do not depend on a single wage for your financial security.
• Live below your means. Poor people focus on spending money. The wealthy focus on creating, saving and investing it.
• Earning more will not solve your debt problems; handling money responsibly will.
• Pay yourself first. Have an emergency fund to cover 3-6 months of living expenses.
• Riches follow ownership. Own something, or at least part of something.
• Generating, using and spending money in a way that is consistent with your values has a healing effect on both you and the world.

Several of the classic writings on prosperity are now in the public domain and can be downloaded from the internet. They include:  J. Allen's "The Path to Prosperity (1905), P.T. Barnum's "The Art of Money Getting" (1880), G. Behrend's "Your Invisible Power" (1921), C. Fillmore's "Prosperity" (1936), A. Smith's " An Inquiry into the Nature and Causes of the Wealth of Nations" (1910), and M. Weber's "The Protestant Ethic and the Spirit of Capitalism" (1930).

Happy investing!