Creating Wealth “Building a Wealth Team”

 

            Thank you for joining me for this month’s edition of Creating Wealth. Last month I talked about strategies you could employ to start you down the path of growing your wealth if you had limited capital by using your self directed IRA. When you read a good idea in a book or article such as mine, it often seems too good to be true. The concepts often seem to be created in a vacuum and don’t acknowledge that real world applications come with pitfalls. This is precisely the reason for this month’s discussion on the value of building a team. Contrary to the idea of American individualism, there are no self-made millionaires. In this article I will briefly explore why I think people do not naturally seek out a team to help them build their wealth. I will also explore many of the benefits of having a team of qualified professionals around you to share in the process of building wealth.

 

The Marlboro Man

            The Marlboro Man is a classic icon of
Americana and in my mind symbolizes rugged determination. He is the embodiment of American independence and encapsulates the spirit that tamed the West. He also sells cigarettes and was one of the most successful advertising campaigns that Phillip Morris ever launched. So what does the Marlboro Man have to do with “Creating Wealth” you ask? It is ironic that the original Marlboro Man died of cancer. Now this symbol of American independence has come to show us not only that cigarette smoking is bad but that rugged individualism might kill you!

 

Perception is Reality

            In every financial self help book you read these days, authors comment on how our view of money has an effect on our financial reality. The subject of money is taboo in our culture. It is not appropriate to ask your neighbor or friend how much money they make. I have friends that don’t even know how much their spouse makes. For most of us there was no class that we took in high school or college on “How to become financially savvy.” Most of what and how we think regarding financial matters was passed down from our parents.  These belief systems govern our actions and can be stumbling blocks for us as we try to create wealth. When you begin to create open conversations about money the knowledge and input of others will begin to reshape your attitudes about investing, growing and sustaining wealth.

 

Who Wants to be a Zillionaire?

            Whether you want to create and sustain your own wealth or become an advisor to others, you will need to examine your attitudes around money. It is important for you to know your risk tolerance and understand where your ethical and moral boundaries lie. These belief systems will govern your own investment practices and those of your clients. You need to educate yourself continually, from refreshing (or learning) the basics to exploring the concepts of arbitrage, real estate funds, private placement memorandums and the 6 benefits of self-directed IRAs vs. 1031 Exchanges.

This is not a journey that you can make alone. The most successful people in the world have a team to support them, while the Marlboro men (and women) everywhere die of rugged individualism. Every successful wealth team needs to have the four basic components and in my opinion 2 ancillary components 1.) Your CPA will work alongside your lawyer to create the proper entity structuring to minimize loss of capital through taxation. 2.) Your Realtor is someone who will help you find the right location, location, location. 3.) Your Lawyer will help you mitigate loss and maximize tax benefits through legal entities. 4.) Your Financial Planner will help you properly diversify your risk and make sure that you have the proper insurance. 5.) I also recommend having a good Mortgage Banker who can show you the basics of arbitrage in regards to leveraging real estate as an asset to perpetuate wealth faster. 6.) Your IRA Administrator will show you how you can leverage your retirement plans to grow your wealth tax deferred or tax free. If one of your strategies is to buy and hold real estate, I think it is also important to also consider a Property Manager. A good Property Manager will alleviate a lot of the management hassles that accompany real estate so that you can focus on growing your wealth. Your team will vary depending on your investment strategy and risk tolerance

            You are the captain of your own financial ship. If you choose to navigate these murky waters alone, you may be lost at sea. By creating a team of professionals around you, you will have access to more financial opportunity because your shipmates will (hopefully) stretch your knowledge and perception of how to create wealth. When you rely on your team of trusted advisors to help you achieve your financial goals, your need to “know everything” disappears and you can focus solely on steering the ship.

 

Resources:

IRA Wealth; Revolutionary IRA Strategies for Real Estate Investment: Patrick W Rice

Creating Wealth: Robert G Allen

The Millionaire Maker: Loral Langemeier

Secrets of the Millionaire Mind: T Harv Eker

Ordinary People Extra Ordinary Wealth: Ric Edelman

Creating Wealth “Intention of Success”

Bill Rodriguez

Cherry Creek Mortgage Company

“Building community one home at a time.”

(303)-877-6323

brodriguez@ccmc-net.com

 

 

Introduction: 

For those of you that are becoming fans of the site you will notice that this article has a specific target audience in mind. It is typical for this time of year for those of us in the sales profession to celebrate or lament the previous year. So while I think much of the same information applies to you budding investors out there you are not going to find the same “nuggets” that you may be used to from my previous articles. But just wait I have a lot of good news to report. Enjoy and Happy Holidays!       

 

         There is always a sense of nostalgia for me during this time of year. All of my efforts have come full circle and as the commissions come in for this final month there is a general period of reflection. My ritual for last months of the year is to not only count my blessings but assess my failures in my business and personal life. I find that the end of the year occurs one of two ways for me. Either I am engaged in that last big push to meet my projected goals for the year or I am hibernating until the spring! This year I am happy to report that there is a flurry of activity for me as I rise to meet my personal and some of my business goals but like many of you I have not seen all of the financial success that I had envisioned for 2006. This is why I believe that it is important to be grounded in the basic principles of success while taking the time to plot a course for the coming year. So this article is dedicated to what I think are the most important elements of creating a successful 2007.

 

Success is Not an Accident

            True, sustainable success is never by accident. All of the most successful people take the time to map out a plan that includes attainable short and long range goals. The answer to the question of “how do I make a million dollars a year in real estate?” is similar to “how do you eat an elephant?” The answer: “one goal at a time.” Goal setting allows a person to break down large tasks into bite size pieces. Each goal met is a positive step toward the completion of a larger goal or vision. These small steps become milestones as you continue down the path of your career.

 

Have a Plan

Having a goal without a concrete plan to attain your goal is like expecting to win a marathon that you never trained for. Creating a business plan helps you achieve the goals that you have put in place by quantifying your business activities in dollars and cents. For example let’s say that you have a goal of making $150,000 in your real estate career in ‘07. Your average transaction is $250,000 therefore your average commission is $7,000 if we assume your take of 2.8%. This would mean that you would need 22 transactions next year to meet your goal. Knowing the numbers helps you control expenses, which are a real part of any business, because you can see the impact to your bottom line. It also allows you to create an attainable goal because you know how many transactions it takes to get you to your magic number. It is my experience that knowing these things will help you focus in on only those things that bring you the biggest return on your investment of time.

 

 

Coming into Focus

            Believe it or not but your ideal customer is Not anyone who happens to be looking to buy or sell a home. One of the biggest mistakes that I see realtors make is not choosing to focus their marketing efforts. Identifying your market segment is one of the most important functions of a business owner because it creates your identity in the market place. McDonalds is not known for having the best tasting hamburgers but that is not why people go to McDonalds. The only time that I eat at McDonalds is when I absolutely need to eat in a hurry! So what is it that you offer your customers that sets you apart from your competition? Find an area of expertise and master it.

 

Become a Spin Doctor

            Once you have selected your area of expertise the next level of mastery is to establish your brand. Once you have identified your target audience you need to stand out among your competitors and capture a share of the market place, branding helps you do this. Create your “elevator pitch.” Your elevator pitch tells your prospect everything that they need to know about what you do and how you do it in the time it takes to go from one floor to another. I usually think of Starbucks for my example of branding. You can be in anywhere in the world and walk into Starbucks and it seems familiar. Every Starbucks has a similar look, feel and experience every time you walk into one of their stores. Branding establishes a consistent buying experience for your customers that distinguishes you in a crowded market place. Your customer need to know that you will deliver that same level of consistency every time before they send you a referral.

           

Resources

            For those of you that like to read I am including some of my top picks to add to your list of “recommended reading” for 07.

 

Blue
Ocean Strategy: W. Chan Kim and Renee Mauborgne

Love is a Killer App: Tim Sanders

Never Eat Alone: Keith Ferrazi

E Myth Revisited: Michael Gerbers

22 Immutable Laws of Marketing: Al Ries and Jack Trout

Positioning: Al Ries and Jack Trout 

 

Since the close of 06 is upon us I am going to part with these words from Aristotle and wish you a happy and joyous holiday season!

 

“With regard to excellence it is not enough to know, but we must try to have and use it.”

 

To Your Continued Success,

 

Bill Rodriguez