Last year at a Real Estate Deal Making Symposium and Syndication Seminar program, the audience was treated to an extraordinary speaker who demonstrated, using real life examples, why good contracts are so critically important. Our presenter, Larry Rothstein, has put the majority of his presentation into words so that people who were not in attendance could benefit from those insights. I share it with you here and hope that you enjoy it.

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If you look at the individual investors that participate on Wall Street, only a tiny handful can take down a whole company all by themselves. There are a few billionaires who can but they generally don't want to, and typically prefer to share the risk with other people. For this reason, corporations have been organized with shares of stock that are sliced up so that dozens, hundreds, thousands or tens of thousands of investors can participate in the profit-seeking activities of our capitalistic country.

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Does the little guy stand any chance anymore? Is anyone looking out for us?

Probably not. The world has become pretty unfriendly to entrepreneurs and self employed people so we have to take care of ourselves. Just keep your eyes wide open when it comes to the management of your financial resources. Understand how the game really plays.

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Living through the stock market roller coaster has been difficult – in fact, it is paralyzing. I am so focused on it that I am having trouble concentrating on work that I can actually control. Ironically, the chaos of the week has made one issue crystal clear for me.

The more I understand the stock market, the more I realize that I don’t get it at all.

Most individuals have their money in the stock market because their retirement accounts force them into the market. Those funds are forced into the market because the companies that manage those funds are stock market companies. A coincidence? The stock market companies supply pension plan participants with a small slate of stocks and mutual funds to choose from. They don't like to call it a slate because that increases their liability in case something goes wrong. But in effect, when you are provided with two, five or seven choices, it is basically a menu that somebody, who pretends to care about your money as much as you do, has provided to you so you can make a simple choice.

Most people think that they live in a self-directed world because they are able to pick the investment vehicle for their capital. But could this be anything further from the truth? In reality, you are not self-directing when you pick from a slate with investments that yield 2% or 3%, and maybe stretching it into really crazy territory, up to 5% annually. It doesn't sound like self-direction to me if you have to be in the stock market at this crazy time and you don't feel good about it. If you would rather be in commodities, real estate or some other asset class, you have to take charge. Do you want real self-direction? So do we.

The entrepreneurial management team of my company has come up with a mechanism for delivering true self-direction to pension plans and IRA funds. We work with CPAs and pension plan administrators that convert the restricted, “cookie cutter” plans into opportunities for true self-direction.

It is the entrepreneurs in our society who always solve the big problems and allowing people the freedom to manage their money in a way that is suitable to their personal style and risk temperament will be no exception. Entrepreneurs will help consumers to solve this problem too, helping investors to break free from the shackles of the big wire houses on Wall Street.

We will be sharing strategies in this area, but for a “heads up” on how we are working with retirement assets, please be in touch with me.

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If you have an opinion or thought on this topic, please write a comment in the form below. Share this blog with your friends. Thank you for being one of our loyal readers. We appreciate you and are rooting for your success.

Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenues and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and is an astute investor. Joel is CEO of Bullseye Capital , a full-service real estate company supporting owners and buyers of real estate assets with brokerage, leasing, property management, and mortgage services. Joel is also the founder of the Bullseye Capital Real Property Opportunity Fund, LLC which is an investment company that acquires distressed real estate by working with accredited investors.

A leader in real estate syndication, we offer seminars to assist others in acquiring the skills needed to raise syndicate capital to acquire properties. Imagine knowing how to pool funds to purchase any real estate investment, whether single family, multi-family, commercial, or anything else. For more information and complete details, please go to http://www.syndicatefast.com/.

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The expulsion of the United States from the AAA Club, that is the club of 16 nations with AAA ratings, from both Standard & Poor's and Moody's Rating Service now contains only 15 members because the United States was kicked out on Friday afternoon. The Obama Administration is trying to blame it on a math error by S&P while the mainstream media is soft-pedaling the issue. But it is much more serious than people realize. In fact, the problem is an emergency.

It’s not really about stock market volatility, or oil prices, real estate values or even the interest rate. It’s about being second rate.

The perception of the United States as the global powerhouse and world leader has been irreparably tarnished. The conduct of our government representatives and our politics has done damage that is beyond comprehension and it has opened the door to trouble and trouble-makers.

The initial thorn in our side is in Asia. The Chinese government has already called for international oversight over the United States economy because they are the largest creditor of the United States government. They do not believe that the United States currency should any longer be the standard that dominates world monetary transactions. They further do not believe that the United States has been fiscally responsible, and as a giant creditor, their opinion carries some weight. You may not hear much about this because most of the other countries who are creditors are sugar-coating their opinions by saying that this is really not such a big deal. But I believe that it is. The United States is still the largest and most stable economy in the world, but our reputation has been tarnished.

The Chinese are not in the habit of sugar coating anything. China’s government has been looking for an opportunity to supplant the United States as the dominant force in every category of business, commerce, finance, manufacturing, and other disciplines, every day over the past 30 years, and they are taking full advantage of the opportunity to run us over now.

Ten days ago, I chaired a round table of high level business leaders in Los Angeles. There was consensus that the debt ceiling (before it was raised by congress and signed by the president) was a serious issue, but that it would somehow blow over. My response was that I can't imagine that in 50 years from now, the government of the United States is going to look the way it looks today. Something has to change because the accumulation of debt cannot continue indefinitely, and the gridlock in Washington cannot continue. Putting 40 cents of every dollar on a credit card can't continue, and further, having nearly 50% of the entire population on some form of public assistance is not something that the country can continue to bear.

I'm not a tea party supporter, but I can see that a lot of what they demand, at least on the economic front, will come to pass. Fiscal reform is inevitable because the impact on this country will be devastating if appropriate action is not taken, and quick.

I wouldn't want to be the person who has to tell retirees that their benefits have to be cut; and I wouldn't want to be the person to tell poor people that their benefits have to be cut; I wouldn't want to have to bring the bad news to anybody's attention. But Congress cannot continue down the path that it's on.

The sheets have been pulled off the bed in Washington, and now everyone can see what's going on. Everyone is clearly focused on how much debt we carry, and on how much money we continue to borrow every single day. It has to stop. The impact on consumers at every level will be known starting Monday when the stock market opens. The impact on business will be dramatic; the impact on the ability of the country to create jobs will be dramatic. The impact on interest rates could be dramatic.

Some news reporter said that a little tick up in interest rates shouldn't be too bad because interest rates are at the lowest rate since the Eisenhower presidency. We live in a world of rationalization. What that journalist neglected to mention is that consumers are carrying their body weight in debt. During the Eisenhower administration, there weren't credit cards. In the 1950s, people had tiny mortgages that they paid off over a 30 year period of time. There were no refinances. People developed equity in their assets. People had one car and they kept it for a long time. There wasn't a consumer treadmill the way that we have it now. Nothing can be compared to the days of old.

This opportunity leaves China chomping at the bit, and I hope that the United States government and the people who put them in Washington will be level headed enough to create a vision for this country that starts to erase debt and starts to create some level headed thinking, because otherwise our country is not going to continue winning the race that we run every single day.

Our pride as citizens is affected and our pocket books as consumers have already been trampled, and that will continue and get worse. We've handed this opportunity to the Chinese on a silver platter and they now are working to lock down their win in a dramatic way. I don't believe it's a foregone conclusion, but if we don't take careful aim at resolving the problem, this situation will continue to get worse. Is the American spirit alive enough to keep us in the game?

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If you have an opinion or thought on this topic, please write a comment in the form below. Share this blog with your friends. Thank you for being one of our loyal readers. We appreciate you and are rooting for your success.

Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenues and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and is an astute investor. Joel is CEO of Bullseye Capital , a full-service real estate company supporting owners and buyers of real estate assets with brokerage, leasing, property management, and mortgage services. Joel is also the founder of the Bullseye Capital Real Property Opportunity Fund, LLC which is an investment company that acquires distressed real estate by working with accredited investors.

A leader in real estate syndication, we offer seminars to assist others in acquiring the skills needed to raise syndicate capital to acquire properties. Imagine knowing how to pool funds to purchase any real estate investment, whether single family, multi-family, commercial, or anything else. For more information and complete details, please go to http://www.syndicatefast.com/.

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The roller coaster that the United States of America has just ridden through the debt ceiling crisis has revealed something that was devastating and unnerving. Many of us did not realize it, but the government has raised the debt ceiling 75 times since 1962. Few increases got any mainstream media attention but this circus brought an enormous amount of attention to a real problem that many of us, including business and global leaders, did not properly understand. We have all known that the government lives outside of its means, but until now most of us probably didn't focus on how much out of its means the government lives.

Taking the next generation's money to pay this generation’s bills is the ultimate Ponzi scheme. It dwarfs by a factor of a million, the damage that was done by the criminals that we've heard of over the last few years, including Bernie Madoff, Allen Stanford and others.

Why are the markets not responding favorably to the delightful debt decrease that our legislators and president have agreed upon? The answer is that now everybody better understands what is really going on under the sheets in Washington. We are living way beyond our means, borrowing from the future to pay for today.

Under this week’s plan, debt is not decreasing at all. Expenses over 10 years will be cut so that we can borrow that amount in the next 2 years.

In the last three years, haven't most consumers learned that they have to get off of the credit card diet? Everybody has learned it, except for the federal government, who has accelerated its spending.

So the reaction by the markets is clear. The stock markets are not happy with the amount of spending reduction, and they are worried about the country’s economic future as a result of it. How many people in our society have their pension plan, IRA funds and other monies tied up in the stock market? Consumers have very little idea about what is going on with their stock market investments. Even though the rules are designed to promote transparency, the complexity makes that transparency, for most consumers, completely elusive.

It sounds like a dangerous place to put your money. But what choice do you have?

You have plenty of choices – but you have to ask for them. You can “self-direct” your retirement funds, which means that you have to take your assets away from people who are consumed with serving themselves and put your money into the hands of people who either are paid to look out for your interest (such as Registered Investment Advisors), or into the hands of people who are on the same side of the table and share profits - making money when you do. More on that next time.

In the mean time, keep an eye on the markets because they are unstable. If you don’t understand the markets, then reevaluate whether or not you should gamble you life savings there. In the meantime, think about Charles Ponzi. Is the government doing what it condemns?                                                            

If you have an opinion or thought on this topic, please write a comment in the form below. Share this blog with your friends. Thank you for being one of our loyal readers. We appreciate you and are rooting for your success.

Often dubbed a "Growth Architect" by his clients, Joel Block advises companies on explosive growth strategies by driving revenues and sales. Well known in the capital markets, Joel is a successful entrepreneur, speaker, advisor and is an astute investor. Joel is CEO of Bullseye Capital , a full-service real estate company supporting owners and buyers of real estate assets with brokerage, leasing, property management, and mortgage services. Joel is also the founder of the Bullseye Capital Real Property Opportunity Fund, LLC , which is an investment company that acquires distressed real estate by working with accredited investors.

A leader in real estate syndication, we offer seminars to assist others in acquiring the skills needed to raise syndicate capital to acquire properties. Imagine knowing how to pool funds to purchase any real estate investment, whether single family, multi-family, commercial, or anything else. For more information and complete details, please go to http://www.syndicatefast.com/.

 

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Question from a Reader:
I’m signing a note for 60% of the purchase price of an apartment building and I am putting together the syndication. How much is my guarantee worth?

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One of the original attendees of our Deal Making Symposium and Syndication Seminar called me recently with an opportunity that he wanted to discuss. Someone wanted to help raise capital for an alumnus and he wanted help with those issues. However, the fund raising and related securities issues are not the purpose of this article, but rather to educate that it's possible to pay people for helping to arrange financing of different kinds – even the equity tranche.

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The world has become so small, and we have all become so interconnected, that the disaster in Japan is ready to, if it has not already, affected the rest of the globe. For the United States in particular, I have some thoughts to share about what the likely impact on our country is going to be.

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The signature line from one of my favorite movies, Law Abiding Citizen, is "you can't fight fate". I'm not a fatalistic person and certainly don't subscribe to that philosophy when it comes to living my life. But, I do believe that we all make our own luck and that luck can be something that we control depending on how we lay out the cards.

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