Friday, October 31, 2014

Homevesting: Wes Smith Makes Real Estate Investing Fun

Hi, I’m Wes Smith, CEO and CCO of 3 Monkey Games at  I have Rescued, Rehabbed, and Re-sold approximately 60 single family homes in and around the Wichita, Kansas area.  I am currently working on my biggest rescue yet: a 360 unit--90 building, 23 acre apartment community in Wichita.  This is a daunting task and a huge step in my real estate investor career.

I have also created over 15 board and card games under the 3 monkey label, Monkey Poker, Monster Monkeys on Trick r Treat Street just to name a couple.  My latest and greatest hit as a game innovator is Homevesting, a board game and a Phone app where you, the player, get to Rescue, Rehab, and Resell properties for fun and cash. Wait did he say cash? Yes, that's right! Players play the game for prizes including cash, electronics and other prizes, and soon I will be giving away a house!   
3 Monkey Games created Homevesting as a fun way to learn the ins and outs of the Rescue, Rehab and Resell, real estate world, and to teach kids the concept of paper trading with fun characters that keeps them engaged.  Here’s a little blurb from the site for you:

Come learn what Tony Robbins, Robert Kiyosaki, Carlton Sheets and Armando Montelongo charge thousands of dollars for.

Learn the trials and tribulations that come along with the adventure of real estate investing and have fun doing it. Play HOMEVESTING: THE PROPERTY INVESTMENT GAME. 

The Deluxe version of the board game also includes online access to our online game that you can use to play in our online tournaments and win real prizes, including the opportunity to Rescue, Rehab and Resell a real-life home for profit.  

With the Homevesting app, players start out with ugly houses, roll dice to accumulate construction workers, and turn that ugly house into a lovely one.  But be warned, you only get a certain amount of rolls per level.  (More can be purchased in in the "settings" menu on the top left corner. You can select a different "hand" to roll while there too).

My Chance Meeting:

I got into real estate about 20 years ago working as a title clerk for a mortgage insurance company.  I would see investors stream through, buying investment properties.  I soon realized that if I wanted more out of life, I would have to do more than push paperwork.  I needed to invest.

I met a farmer that had taken 100,000.00 in seed money (pun intended) and had through shrewd investing in real estate, grown that money into 2.3 million!  He was now in the business of hard money loans.

We developed a partnership and within a two year period, had purchased and rehabbed over 286 units, multi and single family.   We resold a few and retained a good number for hold. This lasted for four years and we decided to sell while the market was hot. We sold the remaining units to an investor from California and parted ways.

 My Work with My Brother-In-Law Turns into an Innovation:

I then went to work with my brother-in-law, rescuing, rehabbing and reselling single family homes.  During this time I decided to keep a journal of all the crazy things people experience during these types of projects. Well, not being an “inside the box thinker,” I decided the best way to tell my story was to create a game that not only educated, but entertained people in  “the ways of the real estate investor.”

So, I packaged up my stories and went into development of the Homevesting game, originally called, 3 Monkey Investments Wheelin’ and Dealin’.  The game’s play cards reflect real life situations I often ran into while rescuing, rehabbing and reselling homes.  Things like badgers in the attic.  Funny to think about, but really hard to deal with in real life.

I feel fortunate that I am able to combine two great things in my life, Game Production and Real Estate, and tell my story from a different perspective.

Good luck!

Wes Smith 

Monday, October 27, 2014

Comparing The Various Retirement Account Types

The world of the Individual Retirement Account or IRA is about as complicated as trying to figure out who you’re related to at a large family reunion.  There can be a hundred people at the gathering and everyone is family, but only a handful can tell you how everyone is related.  Today I will endeavor to be your guide and help you navigate the world of IRA’s.  Well…perhaps just a slice of this world.  

Traditional, Roth, 401k, Roth 401k, 403b, Roth 403b, SEP, Oh my!
Just like you couldn’t possibly remember everyone’s name at a 100 people plus gathering (unless you’re a memory genius) I will not try to bog you down with details you don’t need to know.  For that there is Wikipedia.  Let’s just get to the nitty-gritty of things.  Traditional and Roth IRAs, 401k, 403b, and Simplified Employee Pension (SEP) plans, are ALL retirement plans.  They are all accounts established either for a person (by an employer, e.g.) or by a person (self-employed or doing it alone as a supplement to other retirement accounts, e.g.) and held by a custodian or trustee.  Despite there being several “types” of retirement plans, there are only two ways these accounts are funded:  With money that has not yet been taxed (pre-tax) OR with money that has already been tax.  This is important to note.  See the chart below:

Retirement Plan “Type”
With Tax-Deferred $
With After-Tax $
Traditional IRA
Roth IRA
Roth 401k
Roth 403b
*Notice the key word is “Roth.”  All “Roth” IRAs are funded with after-tax income.

Some Other Key Considerations
If the retirement plan account is established for you by your employer, you may have little to no input whatsoever as to how to grow the principal in the account.  In other words, investing activities with your principal in an employee sponsored retirement plan may be limited or not up to you at all!  Check with your employer.  And even if you have some or full control on what investments to purchase, some custodians restrict the types of assets you can buy.  Whoa.  Confusing isn’t it?
Here’s what you need to know.  First, if you have a retirement plan, what type of plan is it (see above table for examples)?  Second, is the plan employer sponsored or did you set it up yourself?  Third, are investing activities completely sponsored directed, some “self-direction,” or completely self-directed?  Fourth and final, if there is some path to full self-direction, then what types of assets will your custodian allow you to purchase?  See the table below for a visual:

Employer Sponsored
Partly Self-Directed
Traditional & Alternative

What if I don’t have a Self-Directed IRA?
You can open a new self-directed IRA account at any time.  The process for this is simple.  Find an IRA company or entity that allows investments in alternative assets.  An example of one is IRA Services Trust Company. See: Eric Golub's Guest Author Post.
To fund this new account, you will need to fill out a “Transfer Authorization” form.   You cannot personally direct your prior IRA custodian to send funds to a new IRA company.  Your current IRA custodian must receive a request from another entity.  The “Transfer Authorization” form instructs and gives consent to request funds from a current custodian on your behalf by a new custodian.  One last bit about this.  When opening up your new self-directed IRA, make sure you open the right “type.”  For instance, if you currently have a Roth IRA with a brokerage at a bank, then open up a Roth IRA with a new (self-directed) custodian.  This is an apples-to-apples transfer, so to speak.  Going from a Traditional IRA (pre-tax) to a Roth IRA (after-tax) would be considered a conversion and also a taxable event.  This can be done of course, but be prepared for the tax consequences.

The Problem with the 401(k)

Blogger, Mr. Retire By 40 recently posted about the problems with the 401(k).  There are two bulleted points in particular that he mentioned that I'd like to highlight:
  1. Poor investment selections in many 401(k) plans
  2. Employees lack the expertise to invest their 401(k) plan wisely 
In effect, Mr. Retire By 40 makes the case for a failing 401(k) system altogether, and I wholeheartedly agree with him.  But this is not why I am focusing on these two (out of the many) systemic problems with the 401(k).

I am here to share an innovation and happening with respect to the 401(k).  Out today was an interesting showcase article on Yahoo Finance: Start-up Wants to Overhaul...  There is now a company that will take over (manage) your 401(k) investing planning for you, for a small fee of course. models in some ways the investing platform that the likes of or utilize.  The services all of these automated, and passive investing online companies offer, have been falsely and negatively labeled by their more expensive competition as, "robo-advisors."

There are so many players out there vying for a share of everyone's retirement account money.  I can see how it can be both exciting and confusing for a newbie investor.  That's why I'm here!

Questions/Comments?  Please Post.

Friday, October 24, 2014

Educators and The College Loan Debt Crisis

There is an all too familiar activity that incumbent school administrators take to doing during a change of leadership at the top level: we go into hiding (not literally of course).  The hiring of a new Superintendent by a school board almost always portends trouble.  This new boss essentially has the power of the Grimm Reaper, able to slice heads off at will with his scythe.  And he (most school Superintendents are males) will too, utilizing the excuse of needing to get rid of poor performing Principals in order to achieve his "task" or "mission."  What school administrators do when we get a new Superintendent reminds me of the scene in the classic movie, The Wizard of Oz, when the Munchkins scurry about in panic, hiding from the Wicked Witch of West as she makes her menacing and frightful appearance.

When it comes to the college student loan debt crisis in America, educators for too long have been the Munchkins.  How so?  That in just a bit.  First…

The Monopoly

Traditional four year colleges and universities have a monopoly on the Bachelor’s degree.  This is their “product.”  High school graduates and their families realize that this “product” is an indispensable “material” that must be acquired at almost any cost to give an individual a leg up on their financial prospects.  Who reinforces this cultural and social reality?  Employers and public school educators do, of course.  We are not living in the days of Benjamin Franklin when people could actually educate themselves, and prove their worth by becoming someone’s apprentice.  In an age when there is so much free education out there via the Internet, the most information any human has ever had access to, we stick to a singular educational paradigm: going to college to get that fancy Bachelor’s degree.  I realize there are two-year and trade degrees available for consumption.  But c’mon, we all know this is not where the money is.

Colleges and universities have a monopoly of sorts then on the “approved” pathway toward future prosperity.  They can raise tuition prices anytime and still have just about the same demand for their product. What do we call this type of operation?  I’d call it a RACKET!  Wouldn’t you?

The “Players” In This Sweet Scheme

Player number one is the Government, from the President on down to the Secretary of Education, Mr. Arne Duncan.  What does Mr. Duncan have to say about this trillion dollar bubble crisis?
"I applaud the bipartisan compromise reached by President Obama and lawmakers on Capitol Hill, offering relief to millions of students and families across the country. The law will cut rates on nearly all new federal student loans and save undergraduates an average of more than $1,500 on loans taken out this year. It is an encouraging step forward in our effort to keep college affordable.

"Education is a cornerstone of a strong middle-class, and keeping student interest rates low is just part of our commitment to making a college education accessible to every single American willing to work for it. As we continue to work on ways to bring down the soaring costs of higher education, we must remember that all of us share a role in ensuring that college is affordable for students and families. There is more work ahead and I look forward to joining members of both parties in finding ways to keep a high-quality education within reach for working families." Statement

Sounds like he is more concerned with making college affordable (ensuring the scheme continues) by keeping government backed student loan rates from soaring.  Okay….

Financial guru Suzie Ormann has a different take on the matter.  She criticizes congress for making a substantial profit (with federal student loans) on the backs of our young adults.  She makes a great point when comparing the 30-year mortgage rate to the current rate on a federal undegraduate Stafford loan:  

"The 4.66 percent for an undergraduate Stafford loan is at a time when qualified borrowers can get a 30-year fixed rate mortgages for around 4.3 percent for much of the year. If banks can make plenty of money lending out at less than the rate on a federal student loan-for 30 years-it is troubling that student and their families are charged more for shorter-term debt."  

You can read the entire article here: Orman on the Crisis.  She suggested that legislation be passed to allow student loan borrowers to refinance at a rate lower than 4% for undergrads and lower than 7% for PLUS loans (loans to parents).  Sure, why not?  Can't hurt.

Then we have billionaire investor Mark Cuban.  He's made a lot of noise (about the student loan debt crisis) as of late.  You can see him taking on the subject here: CNBC video.  He makes some great points.  He also identifies Player Number 2 in the scheme for us: College/university administrators.  Yes!  Thank-you, Mr. Cuban.  Why should we tolerate colleges and universities constantly upgrading their facilities, turning them into country clubs, in order to attract more sheep?  Why is it okay for Dean Monopoly to pay himself a million dollars a year to run a university?  Meanwhile, Professors starve, underpaid and underappreciated.

The third and final Player in this scheme is none other than our public school educators, from Superintendents on down to the classroom teacher.  I know what you're thinking educators..."No way, Carlos, don't put any of this on us."  I'm afraid I already have.  Here is an excerpt from my ebook, CCM..., published back in March:

The Higher Education Industry and Our Complicity

I purposely mentioned above that I attended a two-year community college after high school; I had acceptance letters to four-year universities at the time.  My decision to stay home and attend San Jose City was based on my immaturity and lack of life skills.  I grew up in a traditional Mexican home.  My mother did virtually everything for me.  How was I supposed to go away to college, not knowing how to wash my own clothes?  I was independent when it came to school and making money.  But when it came to taking care of me, cooking a meal, ironing my clothes, and having clean underwear, I was an ignoramus!  Perhaps if I hadn’t taken my mother for granted, I could’ve been ready to go away after my senior year.  To this day I regret that it took eighteen years to learn from the best mother a kid ever had.

The higher education industry has benefitted financially from our work with students.  The incessant educational goal of getting every child into college created the mess our college graduates are in today.  Sure we can blame the bad economy when graduates can’t find a job or are under-employed.  We can blame our politicians for not doing anything about the problem of ballooning college tuitions, condemning graduates to a lifetime of loan payments.  We can also point the finger at the college graduate for making poor choices as an undergrad.  What about us, the millions of primary and secondary educators across the nation?  What specific role have we played?

I confess I have steered too many unready students toward the lecture halls of four-year colleges and universities.  Those students were as ready as I was two decades ago.  They had a top grade-point average and enough activity on their resumes to make the average person look inexperienced.  But they lacked conviction and had no game plan.  They didn’t know what they wanted to be or what major to declare.  Some were immature and unprepared for life outside their home, much as I was.  Still others had a major in mind, and I was the one lacking the conviction to tell them they were making a mistake.  I too then, am responsible for creating one of the largest supply trains an industry has ever seen.  I’m guilty of helping to build an insatiable demand for higher education.  Why?  Because our numbers look better this way.  The data collected on Advanced Placement exam pass rates, or completion of college entrance requirements, is the evidence districts need to show prospective families they’re superior, ultimately recruiting more students.

I’m for students going to college, but not if it means they’ll end up serving me beer at the Chipotle Mexican Grill bar.  We have thousands of debt-crippled college graduates who are unemployed.  Many work a job, not a career, just to pay off their loans.  Saying, “we didn’t know,” is not an excuse.  We know that when they choose Architecture, Philosophy, Anthropology, Political Science, to name a few, they choose some of the highest unemployment rates in the country.  Source: College-majors-with-highest-lowest-unemployment/the-majors-with-the-lowest-and-highest-unemployment.  We also know that by selecting a Science, Technology, Engineering, or Math (STEM) major, they will have a better chance of starting a career out of college.  A two-year college may be the better option for some of our students.  Getting a job out of high school, doing some self-discovery, becoming financially literate, may be a better decision for some of our kids.  Let’s not act like someone has died when students tell us they don’t want to go to college.  Let’s probe instead, and give sound financial advice.  (end of excerpt)

Superintendents: Pushing S.T.E.M. Is Not Enough

If our country is to come out of this college loan debt bubble crisis, educational leaders must finally stick out their heads without fear and boldly face the problem from our end.  Some states and school districts are trailblazing.  At Herndon High School, in Herndon, VA, senior students can take a course on Economics and Personal Finance, see: article.  In fact, the state of Virginia requires that all students complete a credit course in financial literacy.  I applaud you good citizens of Virginia!

Superintendents everywhere else, take note!  Pushing Science, Technology, Engineering, and Mathematics majors to fill our dwindling supply of abled bodied individuals in these fields isn't enough.  Sure, statistically speaking college graduates who major in these areas stand a better chance of earning more money over their lifetimes.  That does nothing to curb the insatiable appetitie for money that university administrators, private lenders, and even the government, all have.  As "21st Century Leaders" you must do more.

The case of Fairfax County Public Schools taking a traditional core class like Economics and morphing it into a College 101 class is a great one.  Economics is a semester course at most comprehensive public high schools.  Why not simply transform the curriculum, teach it using material that is actually relevant to our 12th grade students today?  Integrating financial concepts as they pertain to the college experience would not be hard to do.

Why do we value the financial livelihoods of our soon to be retired professional educators more than we do our soon to be world leaders?  In California, all teachers on the brink of retirement are given the opportunity to receive benefits counseling.  This service is important, is it not?  Yet we do not afford our 12th grade students financial counseling prior to their leaving our halls?  Shame on us!  Let's stop fanning the flames now.

I'm too angry to continue! 

Wednesday, October 22, 2014

Save A Ton Of Money Getting Married At The Courthouse

Never in a million years did I think a County's Assesor/Recorder/County Clerk office would become a pivotal destination in my life.  It wasn't until my thirties that I even needed to look for one.  But one in particular has done just that, entered my mind as a place I hold dear to my heart.  Really, I'm not kidding.

The San Marcos, CA San Diego ARCC Branch Office, situated at 141 E. Carmel Street does indeed have charm.  It's a two-tone modern looking building with plenty of glass.  The landscaping is appropriate for our region with some drought tolerant flora.  On any given day (though there are probably certain scheduled days of the week) you may find a woman in full bridal attire in the parking lot, looking nervous yet beautiful as she makes her way to the front door.  Her handsome, husband-to-be, at her side.  Street View Google Maps if you want to get a look.

My First Visit

It's been seven years since my first visit to the San Marcos ARCC branch office.  I was in a serious funk back then, stressed by work as a second year high school Assistant Principal, compounded by my having to commute fifty-five minutes each way to the city of Lake Elsinore.  I was also at the tail end of an amicable divorce.  Divorces can be nasty.  I was lucky.  My first marriage ended after three years without any fighting and without any children to worry about.

Enough reminiscing.  Why was I at the SM ARCC branch office for the first time in 2007?  I was there to file a Quitclaim Deed.  I have taken the liberty of copying the part of an online quitclaim deed definition pertaining to a divorce:

Another common use for a quitclaim deed is in divorce, whereby one spouse terminates any interest in the jointly owned marital home, thereby granting the receiving spouse full rights to the property. For example, when a husband acquires the marital home in a divorce settlement, the wife could execute a quitclaim deed eliminating her interest in the property and transferring full claim to the husband quickly and inexpensively.[5] The ease at which the quit claim deed can be executed is partly to blame for the "quick claim" misnomer associated with the deed.[6]  Source: Wikipedia      

Like I said, my divorce was for the best so I did not have to go to court.  Why did my ex-wife give up her claim to our jointly owned home?  The house was upside down with an underwater mortgage, of course!  She was leaving the area and I was staying.  So it made sense for me to have full claim.  Many of you are thinking right now, Yes, Carlos, she gave up claim to your jointly owned home but that doesn't mean she is off the hook when it comes to the mortgage/note.  You are correct!  She wasn't out of the woods yet, so to speak.  We had to request GMAC to allow me to be the only person assigned to the mortgage.

Now I want you to start thinking again.  Why would a lender want to help a couple with two incomes rid one couple from a mortgage note they own?  Does this make any sense?  Of course not.  There's a greater risk of default with just one person handling the monthly payments.  Timing was everything.  I was most fortunate.  You see, I'd just received a pay raise at work.  I was netting over $6K a month, almost $1K more than when we first applied for the mortgage, a 30-year, fixed interest rate loan.  The process involved refinancing.  Once again, I have taken the liberty of copying for you a segment that explains this process better than I can:

10. People Listed on the Refinanced Mortgage
Generally, if you’re trying to add or remove someone from a mortgage, such as after a marriage or divorce, the lender will require you to refinance. This is done to determine whether or not the other person will qualify, or if you will qualify alone.
However, you may be able to work something out with the mortgage lender in order to accomplish your goal without going through a full refinance. This is especially true if the person who will have been on both mortgages can qualify for the mortgage by themselves.  Source:

In our case, we were able to "work something out..." and did not need a full refinance.  They simply asked us for money, and to sign off on some paperwork.  The price we were quoted to complete the process was a little over $3K if I recall.  But I wasn't going to pay a penny of it.  Please don't judge me for being mean to my ex-wife.  I wasn't forcing her out.  She didn't want any liability to her good credit in the event the payments would stop being made by her soon to be ex-husband.  She also didn't have any interest in the home after the quitclaim deed was filed.  $3K was a small sum to pay to get out completely unscathed from an underwater mortgage.  Why did I agree to all of this insanity?  That's another interesting story.  You'll have to buy my ebook.  By the way, I still live in the same home with my new wife!  She's next.

Second Visit

The year is 2010 and I am rolling back at full speed.  I'd met a hot babe the year before at the La Jolla Marriott one Saturday evening while Salsa dancing.  After several months of dating, and a successful engagement proposal (which by the way took place at the same place we met), she agreed to move in with me.  Her name is Jessica in case you're joining my reader base for the first time today.  And like me, she too had gone through a divorce and had no children from her first marriage.  She loved (and still loves) to dance to Latin music.  Best part however, was that she was so open-minded.  She also had an entrepreneurial spirit about her.  Not to mention, she understood money.  During our engagement I had several tenants living in my home, renting individual rooms.  Jessica didn't mind.  In fact, she thought it smart to pay down a mortgage with other people's money provided there were no children in the home.

Back to my second visit to the SM ARCC branch office.  I'm sure you have inferred by now that this branch office is where Jessica and I got married.  You are correct again!  We saved a ton of money, not marrying conventionally as we both had with our first marriages.  For people out there who are considering getting married, you may want to rethink your options and include the local courthouse as one of your choices for a locale.  It's actually not bad.  We made the best of it.  We dressed up as if we were going to a traditional church ceremony, had our photographer accompany us, and then headed to a restaurant to meet our friends and guests.  Here is a picture of us at the courthouse.  Notice the man in the background, waiting to file some papers, hahaha!  Another benefit of not paying so much for a ceremony...more money for the honeymoon!  We went on all inclusive trip to Belize, staying at the reputable and gorgeous Chaa Creek Lodge.

Enjoying libations at the Chaa Creek Lodge

Mayan fun!

Third Visit

My third visit to the SM ARCC branch office took place very recently.  On October 13, 2014, I took the first of a series of steps toward the official and legal launch of my company, Common Core Money: Content & Brand Education.  In the near future, I will write another post about all of the steps I've taken thus far to get my business up and running.  For now, I'll focus on sticking to the theme on how the SM ARCC branch office has been a great place for me.  This third visit was exciting.  Starting a business is a huge rush.  And I had to contain myself while I waited to be seen by a clerk.  I pulled a number from the front desk as instructed by the receptionist.  Lucky number 47.  "Now Serving:" number 44.  Hearing my number finally called out by the next available clerk reminded me of a GEICO commercial, and I dang near did the Ickey Shuffle in celebration!

Filing a Fictitious Business Name Statement with your county ARCC office is like coming out to the world and celebrating your existence.  Wouldn't you rather have a unique name, one that others can't use and associate with your wonderful business?  Duh!  So although it sounds weird, the word, "fictitious," that is, it is really about ensuring some legal protection for you and your nascent business.  Here is a blurb you may find interesting about the "Purpose of Filing a Fictitious Business Name Statement:"

Beyond protecting your right to use your business name, legally announcing your intention to use an assumed name makes naming businesses simpler for everyone. Image if states did not have a database of known business names. Several businesses could operate under the same name, by accident or intentionally. Also, when you file out a fictitious business name statement, you list your contact information -- making it easy for customers to address complaints.
Not filing for a fictitious business name could hurt your business in the future by constricting your ability to expand your services and products. If you start in a niche market, such as breakfast food with the name "Betty's Breakfast Cafe," you would need to rebuild your brand name image if you want to branch out in to pizza. Credit

One other note, you will need proof of having filed a FBNS in order to open up a business bank account.  So when you go to your local bank to open up your new business account, be sure to take this legal and stamped document with you.  See mine below:

You can see that I registered my business with name, a) Common Core Money, and b)  You are provided with a second sheet where you can list as many name derivations as you like so others cannot register a name resembling yours.  Every name you register (in SD county) will cost you an additional $5.  The base cost for this service was $42.  Don't go crazy!  Two to three name variants will suffice in most cases.  Let's consider one where you could go wild.  Say, Charles Burgers.  You can register the following additional names: Charles' Burgers or Charles Burgers' or Charles Burger's and so on and so forth.  Try not to create such a generic business name to begin with.

Okay, I will leave you here for today.  Tune in next time for a closer look at the steps I took (in totality) to make my business legal.

Saturday, October 18, 2014

IRA Services Trust Company: Eric's In The House

I’d like to extend a ‘thank you’ to Carlos for the opportunity to introduce his readers to the idea of self-directed IRAs. 

There’s a whole world out there – and I’ve always had diverse interests, pursuing career paths in several different directions.  These include music (performing and recording jazz and folk styles from around the world), and education (international studies, foreign languages and ethnomusicology).  Sometimes it seems I’ve spent my entire life exploring all of them, wherever my tastes or curiosity has led me.  I was already no longer a youngster when I discovered my third career direction: investments (all kinds, but increasingly alternative investments).

My introduction to investing came by surprise when I took a customer-facing position with the global mutual fund powerhouse, Franklin Templeton, in the ‘90s.  In studying to obtain my securities license, and then in serving clients through my role with Franklin’s Fund Information department, I had a surprise revelation – an ‘aha’ moment: investing is really interesting.  Everything about interest compounding and total return, and how securities and especially mutual funds work, became fascinating to me, and remain so.  I began to study a bit about portfolio theory and portfolio diversification, and how it was that mutual funds made up their portfolios.  Portfolio theory proceeds from the observation that different types of investments perform differently based on conditions in the larger environment, or economy.  Therefore one could use these concepts as a matrix to balance their investment goals and hopes on the one hand, with their tolerance for risk and volatility on the other. 

Later, I seized the opportunity to advance into the brokerage world, joining the staff at a super-affluent branch of Charles Schwab.  I acquired further securities industry licensing which enabled me to transact securities and provide portfolio advice to clients face to face.  But what I really loved was speaking in public on investment topics.  I would deliver free seminars on portfolio diversification after hours at the branch. 

The most poignant realization begotten from my start in the investment world, then, was not only how interesting investing is, but more importantly how important it is for everyone to do.  In other words, to invest, to have a plan, and to acquire increasing skill at investing is crucial to developing one’s financial health over time.  Or seen from the reverse angle: the failure to invest and to continue doing so, will almost surely handicap a person, going forward. 

The bottom line became clear enough, soon enough: we all must give some attention to building a nest egg.  The IRA (Individual Retirement Arrangement) is one of the most obvious tools to build one’s retirement nest egg.  The IRA allows you to grow that nest egg while deferring taxes (none of the profits or earnings enjoyed within the account incur taxes, but only the money that’s withdrawn from the account, especially if it’s prior to retirement age).  The Roth IRA is a slightly newer variation, designed to allow account-holders to take the funds tax-free once in retirement (or at least once they’ve held them in the Roth IRA for 5 years or more, and are over the age of 59 ½).  These increased tax benefits make the Roth IRA an especially powerful tool for building wealth over time.

Some years ago, my investment interests and research had outgrown the world of stocks, bonds and mutual funds, to extend into the territory of ‘alternative investments’ (investments not based on stocks or bonds).  Alternative (or ‘non-standard’) assets are those which banks and brokerages, and the IRA custodians that are housed at them, cannot or will not handle.  These assets behave differently from cash or CDs, differently from the stock and bond markets, and are out of the area of expertise of banks and brokerages.  In fact, those institutions seem to disapprove or eschew them (hence the terms like ‘non-standard).  But as I’d discovered already, a portfolio would benefit from true diversification by the inclusion of certain of these assets, for the very reason that they perform differently from stocks and bonds, etc.

I had become attracted to precious metals (coins or bars made of pure gold and silver) for their intrinsic and lasting value, independent of credit or the value of paper money.  Another ‘alternative investment’ area is real estate, which offers a variety of ways to benefit, either from the appreciation of land or property over time, but also from the income generated from renting or leasing it to others.  The category of ‘non-standard’ investments also includes shares of private companies or start-ups, oil and gas rights or royalties, equipment leases, shares of specialty farms, etc.

The Internal Revenue Service -- who make the laws regarding what can and can’t be invested in with a retirement account -- permit these investments!   But none of them can be invested in directly through Franklin or Schwab, and neither can they be investments in an IRA or Roth IRA administered by them or any of their peers--- and never mind that the Individual Retirement Arrangement already permits account-holders to self-direct.  No, this sort of thing requires a “Self-Directed IRA, ” since the asset choices are simply limited quite severely by your standard IRA custodian (i.e., one associated with a bank, brokerage or mutual fund company).  It turns out there have been Self-Directed IRA Custodians pretty much all along, existing to make it possible for all investors to gain this truer, fuller diversification.  So over the last 6 years, I have been assisting clients who self-direct their IRAs and Roth IRAs into a range of ‘alternative assets,’ and it’s where I’ve held my retirement accounts for those and other reasons.

I’m proud to be currently representing one of the most experienced and user-friendly firms: IRA Services Trust Company.   Located right here in the S.F. Bay Area where I grew up, IRA Services has engaged me in a variety of duties, including training, marketing, and business development outreaches.  But I especially enjoy serving as a sort of account manager or liaison for certain companies who provide special alternative investments for their clients to make in their self-directed IRA or Roth IRA. 

Among our clients, there are many who hold real estate outright, others who hold interests in mortgages on property, and then are those invested in REITs (Real Estate Investment Trusts) – a sort of mutual fund owning properties rather than stocks.  Rich-Uncles offers a REIT which is not difficult to understand, seeking to benefit from the stable income produced by high-quality commercial properties.  In other words, their REIT owns several properties in really good locations which it leases to the best businesses on fairly long-term deals – so in effect, it provides its shareholders with an attractive way to own ‘a piece of the buildings.’  Self-directed IRA or Roth IRA investors receive the income dividends posted to their accounts every three months, where they can accumulate, deferring the taxes until the future.  And those dividends can automatically re-invest to purchase more shares each quarter.  Now there’s the beauty of compounding, and of total return, working for you!


Disclaimer: Neither Eric Golub nor IRA Services Trust Company endorses any investment or provides any investment advice about your investments. 

Monday, October 13, 2014

From Book to Blog to Customer: My Business Story

It all started a couple of years ago...

I was sitting in my office, probably answering one of a ton of emails in my inbox, when in stormed a teacher friend.  She sat down, looking tired and defeated.  What's up? I said.

To make a long story short, she had less then a hundred dollars in her bank account and the month still had a week to end.  She happens to be a single mother with a growing adolescent son at home, and as a new father (my daughter, Rehani, was a few months old at the time) I understood her dilemma.  I thought: Here's an excellent teacher, working extremely hard at her job, unable to make ends meet with her teacher salary.  How awful.  I offered her money to hold her over.  She declined, informing me that she was soon starting a second job as a tutor.  I felt bad about her circumstances.  It reminded me of my life growing up in East San Jose as part of an immigrant family.  There were times when my parents had to borrow money from friends to feed me and my siblings.

Teachers: Please don't turn to a life of crime to pay your bills!

After she left my office I started thinking of her, and all of the other teachers like her I have worked with in my ten years as a school administrator.  Sadly, I have known too many teachers in my career who were single, head-of-household and working two jobs, as tutors, waiters/waitresses, party planners, Starbucks baristas, etc.  Nowadays, the teacher financial struggle is not limited to single, head-of-households.  Teacher couples also struggle financially!  If I had a nickel for every teacher couple I know who lives in a cramped condo with children....

Credit for pic

Common Core Money: Financial Literacy for Educators and Other Professionals

That same year around Thanksgiving break I decided to put ideas down on paper, focusing on how I could share my investing know-how with educator colleagues all over the U.S.  I write, therefore I am.  There were no other definitive pathways at the time for me to employ in reaching out to peers.  I had a small following after the publication of my first ebook: Immigrant Me..., and thought I could use my network to branch out into the world of non-fiction literature.  During the Winter (no longer called, "Christmas") break, I organized the content for Common Core Money..., and wrote.  And wrote.  And wrote some more.  It poured out of me.  I had it done in two weeks!  Thank God for the double, two-hour nap sessions my daughter could take back in those days.  She doesn't nap at all now.  Ugh.

Once the file was uploaded and "live" at, I started a marketing campaign, letting all my friends and connections on Facebook and LinkedIn know about my book.  Wasn't much of a Twitterer per se, though I do have a Twitter handle.  I got some book sales this way, and I continue to do so.  I did not spend any money marketing outside of my social media networks.  I dont' regret this.  Why?  I learned that it's challenging to get people to buy AND read non-fiction financial literacy books.  The book industry is also very competitive.  I wasn't trying to retire or anything from my book sales.  I wanted simply to make my know-how available in written form to educators and other professionals, and if I made a little mula on the side then great.  The book is by no means an encyclopedia of financial literacy content either.  In fact, it is quite short, an easy read.  Just meant to get people jazzed up about investing like I was.

Common Core Money Blog

If you're bored by now, this is where things get a bit more interesting.  The idea for a blog, CCM blog, came to me during a discussion with Howard Makler, Co-Founder of Rich-Uncles.  Howie and I connected via Facebook, believe it or not.  His R-Us' Facebook ad reached my iPad screen and I posted a comment.  A comment soon turned into an opportunity for me.  I talk about this on my ebook, namely, how a platform like FB has allowed the mainstream access to people one would never come in contact with, and how (given the right players involved) these points of contact often turn into opportunities, mutually benifiting ones at that!

The partnership:  Howie agreed to mentor me, and make me a part of the Rich-Uncles family in some yet to be determined way at that time.  My role, after becoming one of Nexregen REIT I's (R-U is the brand) earliest investors, was to help with prospective investors.  Investors called me (Howie gave them my number) and I would share with them why I invested.  Of course this meant I had to know my stuff.  I couldn't just wing it.  Why did Howie ask me to get involved?  I had a unique skillset, being able to translate in two languages (Spanish and English) the language of investing to the layman, the beginning/novice investor.  That's exactly what R-U needed at the time.  Lucky for me, I was at the right place (on FB) at the right time.  If you look at some of the earlier CCM blog posts, you will see that some were written exclusively in Spanish.  That's because I was attempting to prove a hypothesis at that time, that Latinos do invest!  Several of the "leads" Howie handed me back then were Spanish speaking individuals just begging basically, to get someone on the other line that could connect with them, and take the time to explain the R-U investment.


Credit for Pic.  Sweet ride!

One lead in particular Howie and I still talk about today that has reached R-U lore is that of Benedicto X (last name withheld for privacy), the Ice Cream Man.  Benny, as I know him today, somehow correctly completed the R-U online Investor Profile.  Why correctly?  The man doesn't speak a lick of English.  His email read: "u call me. speakin espanish?"  Benedicto lives somewhere in inner city Los Angeles.  We had his address on our database and could Google map his surroundings.  I give Howie lots of credit because he could've ignored the lead.  There were hundreds coming in weekly, too many for Howie to pursue alone.  One evening he asked me to give Benedicto a call.  Howie was not optimistic the lead would pan out, but his open mindedness allowed him at least to pass it on to me.

Benny answered the phone from inside his vehicle.  His ice cream truck!  As we spoke I could hear the voices of children coming up to his window asking for Pink Panther ice cream pops, Jolly Rancher snow cones, Sour Cherry cups, etc.  I'm not lying!  Benny shared with me that he has been a self-employed individual since arriving in the U.S. from Mexico.  He owns his own ice cream business, a mechanic shop he leases out, and other investment property.  That someone could own so much without knowing the language, so to speak, did not surprise me.  In Los Angeles, pretty much everyone speaks Spanish!  Bankers, real estate agents, brokers, the Koreans in Korea Town, you name it.  They can all find a way to make a deal when it comes to business.  IF ONLY INVESTING INSTITUTIONS GAVE THESE PEOPLE THE ATTENTION THEY DESERVE.  Benny had $40K sitting in the bank, earning him nothing.  Glad I was there to help him out.


There have been many prospective Rich-Uncles investors that have contacted Howie and said those words to him: "I read about it on a blog."  I must have done a good job of it, writing a review of R-U as an investment for the masses.  CCM blog, therefore, was acting as a means by which R-U could market itself cheaply to others via this blogging platform that I created.  CCM blog allowed me to prove myself as an advertising agent to any company, and solidify my standing within R-U.  I did not anticipate that my top posts thus far would be those associated with my review of R-U and their activities.  Obviously now I am glad that they remain very popular.  I cannot give myself the entire pat on the back, however.  The R-U investment is popular in CA and no doubt people are out there looking for any credible information they can gather to make a more informed decision about investing or not.  See, most companies already have their own blogs.  I find most of them to be quite boring.  They are dry, too technical for most people, and even a nerd like me has to push hard to read a post to its end.  Wanna know why some (there are some good ones out there) investment product company blogs lack the formula they need to be effective, being unable to bring the interested investor back to the site?  The posts are written to cater to a small audience, the sophisticated investor!  Companies figure sophisticated investors are the ones with all of the money.  They neglect to connect with the under-appreciated market that is the novice/small investor, believing the pool of cash is shallow.  Sure, when you consider  that most of the wealth in this country is owned by just 10% of its inhabitants, it's hard to veer off the path of putting any of your advertising budget to go after anyone else.  Their loss.

CCM blog has both morphed and diverged since its inception in March of 2014.  Haven't you noticed the latest features?  CCM blog was my springboard into two new roles for Rich-Uncles, that of an "ambassador" to new investors and as the company's blogger.  Nice, huh?  A few months ago I began a transition of making this blog into what I originally wanted it to be, a site where good, hard-working people could go to get some financial literacy and a recommended investment idea.  But that wasn't enough, not for me.

Common Core Money: The Customer

Starting a business without an actual product or service is challenging.  There is nothing in plain sight.  Everything is a moving target.  The customer is an apparition that materializes and vanishes just when you think your proton gun's beam has it locked in.  Who you gonna call?  No, they can't help you with this.

My website, Common Core where my beta version company currently resides, is a hodgepodge of services mostly.  And that's okay for now.  I'm not shoveling all of my life savings into an unproven concept.  Here is where most entrepreneurs go wrong.  They operate with an incorrect hypothesis:  If I create this company, offering a particular service or product, then I will see a demand.  Wrong!  Your hypothesis should be the other way around:  If I create a customer with a particular demand, then I will offer a service or product to meet that demand, and turn it into a company.  I doesn't make any sense.  But that's exactly how it should be if you plan on building something successful from the ground up.  That's what I am laboring to do.  It's exciting work.  Wish me luck.

Thank-you for reading!