Friday, November 22, 2013

Rich strategy = Do the opposite of the poor Majority


The rich are the minority which means the mainstream media a guiding the majority. Their is a simple rule to follow to be rich. Do the opposite of what the majority is doing smartly.
You can use this simple trick, when your hairdresser think of buying a condo, sell your condo.
Since the beginning of 2005, the late majority of Canadian are jumping into the house market when the rich where starting to move out. Now, the majority is starting to freak because they start realizing the market was overpriced which means it will soon be the right timing to buy, not sell.

the main indicator the bubble will burst is:


You might say: increase bank down payment??? Yes.
As an example, in Canada, the down payment is 20% for a second building.
Most of the banks now ask 25-30% down payment. The math is simple, even if you pay the market price the bank takes no risk. If the bank ask more then 20%, it means you are paying more then the real value which means you have to put more down payment to reduce the bank risk.

Example:
- Triplex = 500K
- standard down payment = 20% (100k)
- Bank evaluation = 400K
- Risk = 100K no warranty
- Bank new down payment = 100K + 25%*100K  = 125K (25% of 500K)

Why it is over valued: simple economics. Value is drive by increase of population & salary.
Quebec province has the worst number is both.

What is another big difference between the rich an poor:



Poor are optimizing capital gain first. Rich are optimizing cash-flow. If your real-estate investment is base only on capital gain, yes you are fucked and you think like a poor. Smart rich people are optimizing cashflow then capital gain.
For patient people, they will be lot of opportunity ahead, why?

  • Most real-estate investor will start selling
  • Buyer majority will stay out of real-estate (decrease demand)
  • Majority will go back to stocks (think it is less risky; decrease demand further)
  • Seller will run out of money ;) due to bad economic condition
  • Canadian dollar is going down....natural resource value is going doing (US oil dependency is down  & Why Iran Nuclear threat is no more an issue?




Its the same as the idea to buy when everyone is selling and sell when everyone buys ;)

Tuesday, November 19, 2013

Want to better train your kids for life?

Standard education system is designed to train Employees which is why it is focusing only on Linguistic Intelligence and Logical Intelligence (good execution worker). As you will notice, standard intelligence segmentation is forgetting multi-language and financial education to ensure you stay even more locked in the E quadrant.

In order to ensure E people stay in E quadrant, the system of the rich reinforce insecurity by training our kids that failure is bad instead of a failure is great to learn (you must read "The Flinch by Julien Smith")
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Now, how can you better train your kids?
  • Intelligence education: make them realize all types of intelligence
    • You can buy this book to your kid (<5$) Rich Dad, Poor Dad for Teens
    • Ensure they have a Financial education
    • Help your kids learn the others types of intelligence
    • Turn them into investor not money saver
  • Ensure your kids see failure as a great way to learn and not fall in the security pattern
  • Ensure your kids are expose and learn other language
  • Travel to open their mind to the world of opportunity not fear
  • Spend more time to talk with them and encourage questions
You don't have to fall in the E trap of trying to send your kids to rich school, your kids won't learn much more and he won't have time anymore to better learn all the other types of intelligence.