#59 – The Four Pillars of a Micropreneurs, by Jason Hartman

The path of a micropreneur is one with unique attributes and challenges.  With a business that you operate yourself, it may seem that resources for accomplishing your goals are severely limited.  However, it is quite possible to leverage business relationships so that you are able to take advantage of vast resources and knowledge.  By operating your own shop, it will allow you to maximize the time spent in pursuit of your business goals and personally control the direction of your business.  The fundamentals of being a micropreneur are articulated in the four pillars.  These four pillars are Passion, Profits, Control and Leverage.

1)      Passion

1. A primary purpose of becoming a micropreneur is the ability to pursue your life’s passion.  In some cases this passion can be a particular line of work or industry, and in other cases this passion can be time with family and freedom to travel.  The most important first step is to do some serious soul searching to determine your life’s passion.  Generally speaking, a burning passion is something that doesn’t feel like work when you are doing it.
2. A famous cliché of the professional world states that “If it was fun, it wouldn’t be called work.”  That sentiment is truer than many of us would like to admit.  By creating and building an entrepreneurial venture that is oriented around your personal passion, it will help to create the necessary fire for building a business that pushes past failure to cross the line of success.
3. It may be that your ventures as a micropreneur start in a small niche that is chosen specifically for its viability in producing immediate profits.  As your business ventures continue, you will have opportunities to shift the emphasis of your activities toward your personal passion.  You are in total control of the direction your business takes.

2)      Profits

1. One of the common characteristics of a micropreneur is somebody that is pursuing a personal passion, and in some cases there are more profitable business or employment opportunities available.  The hitch is that these other opportunities either require an onerous time commitment, are particularly unpleasant, or both.  While it is important for a micropreneur to pursue their passions, it is also critical to generate profits from your entrepreneurial activities.
2. In the beginning, many micropreneurs generate very modest revenue, but succeed because their expenses are kept very low.  When you engage in a scalable business with expenses that do not increase at the same rate as your revenue grows, it can allow you the opportunity to generate increasingly attractive profits in the future.  When you are starting as a micropreneur, it is most important to take action that generates immediate cash flow.  There will be time and opportunities to scale-up your revenue in the future, but nothing will happen if you do not take action.
3. It is certainly true that many people value lifestyle considerations over money, but it is equally true that money is a necessity of life.  As a micropreneur, it is critical to leverage your time and the time of people who you work with.  This will allow your business to accommodate your lifestyle, instead of forcing your lifestyle to accommodate your business.

3)      Control

1. Many people currently feel that their lives are spinning further out of control with each passing day.  It is well known that many corporations require employees to ‘play the game’ if they want to succeed and achieve promotions.  This frustration has left people with a feeling that their professional lives are being dictated by their company and that they must absorb ever increase time commitments.
2. There is also a sizeable population of people who are losing control of their financial life. In many cases, these are people who have been trained in an area of specialty that is not delivering the level of income that is necessary to support their lifestyle.  These people are facing a very real choice between lowering their lifestyle and finding a way to increase their income.
3. The path of a micropreneur is frequently appealing to both types of person, since it provides financial opportunities to people that do not fit into the mold for traditional corporate employees and provides control over time and work to experienced professionals who have grown tired of the demands placed upon them by their profession.

4)      Leverage

1. Robert Allen once commented that wealth is when small efforts produce large results and poverty is when large efforts produce small results.  Producing large results with small efforts is the fundamental basis of success, since it allows you to multiply the impact of your time.  As a micropreneur, one of the primary goals that you will be seeking to accomplish is both business and financial leverage.
2. Business leverage allows you to automate your business activities so that a maximum amount of activities are handled by somebody else or something else.  Business systems are a typical means by which this kind of leverage is achieved.  As a micropreneur, you can attain business leverage without the necessity of hiring employees.  This is accomplished by partnering with service agencies that will conduct routine business activities on your behalf in exchange for a negotiated fee.  By simplifying business activities, it allows more time for the entrepreneur to focus on the strategy of their venture instead of the day to day operations.
3. Financial leverage is the art of using other people’s money to capitalize your investments and ventures.  This will allow you to generate passive income, and larger rates of return on attractive investments.  By utilizing financial leverage, a micropreneur can minimize the amount of time devoted to work so that more time is available for other interests such as family, education, or personal hobbies.

http://www.CreatingWealthPodcast.com & http://JasonHartman.com

Podcast: Download

#36 – Patrolling the Plastic / Non-Dollar Based Assets, Jason Hartman

Patrolling the Plastic: Keeping Track of the Consumer Credit Market (From the Chart Store Weekly Chart Blog for the week ending July 10, 2009)

Analysis of the total consumer credit outstanding shows that the last 10 years, the total consumer debt outstanding as a percentage of disposable personal income has rounded the hump from its all-time high, and is retreating downward. The recent credit market disruption has left many people deleveraging their debt positions, and is pushing this index down further. Unfortunately, the average amount of consumer credit outstanding is still very high relative to the average of 17.5% from 1959 to 1994. Much of the economic expansion in the late 1990s and early twenty-first century was based on debt-financed consumption.

The resultant debt bubble has compromised the ability of many families to continue with their prior spending habits. In practical terms, this means that a prolonged period of adjustment is very likely as consumers slowly move toward a sustainable equilibrium of credit that is nearer to the historical average. This period of adjustment is very likely to result in a downward shift in spending patterns, as well as the observed level of prosperity for the average consumer. Prudent investors should position their portfolios so that they control assets like entry-level rental housing that will be in demand by people who are adapting to the reality of living more modestly.

Non-Dollar-Based Assets Will Rock Your World (From the JasonHartman.com blog)

We’ve been talking a bit lately about how, in our humble opinion, the dollar is poised for a headfirst plummet off a very high cliff. When it does, get ready for the cloud of dust slowly rising up into the sky, just like in the Roadrunner cartoon when Wile E. Coyote makes yet another serious error in judgment.

It doesn’t take much pondering to arrive at the conclusion that a good place to be when the currency crashes is – drum roll, please – OUT of that currency. You need hard, tangible assets. Like commodities? Yes, but probably not what you think. Running out to buy gold and silver is better than Wall Street stocks and bonds, but you can still do much, much better if you turn to income property investing.

After all, what is a structure on land besides a collection of basic commodities like copper, wood, brick, etc? We call it Packaged Commodity Investing™, and this is one (perhaps the only way) to survive the coming fiat currency implosion with your wealth intact. Can you imagine actually being able to create wealth while others around you, especially those who stayed in stocks, are being turned into paupers overnight?

People will still need a place to sleep at night and you will own the pillows. This is how to position yourself to become wealthy in the future. Own something of real value, like real estate. Companies come and go with frightening regularity off the stock market indices. Terra firma beneath your feet? It’s probably going to stay.

Podcast: Download

#21 – Refi ‘Til Ya Die – Making Money With Properties Investment

In today’s video from http://JasonHartman.com, learn how to continually make NON-TAXABLE money from properties investment. http://CreatingWealthPodcast.com

Platinum Properties Investor Network has a series of core concepts that we communicate to our investors.  One of these is to ‘Refi ‘Til Ya Die’ with your rental property portfolio.  While this description may sound a bit snarky, it is a very powerful strategy for multiplying your wealth over the long term.

The most unique part of this strategy is that it stands in stark contrast to the popular strategy of ‘flipping’ properties by buying and quickly re-selling them for quick profits.  The strategy that we recommend is the exact opposite of this.  At Platinum Properties, we advocate buying and holding prudent rental properties over a long period of time.  This enables investors to build real wealth, instead of constantly churning properties  (and creating taxable gains).

There is another very powerful force behind our strategy of buy and hold investing.  That power comes when the rents and value of your property increase over time.  Typically, an investment property will start with low cash flow, and will grow in profitability as tenant rents are increased.  This increase in revenues carries with it a tremendous tool for growing your wealth.

The way that you employ this tool is to refinance your property for more than your original purchase price, based on the increased cash flow.  This will allow you to re-invest the amount of your loan that exceeds the original purchase price. And here comes the kicker . . . these net proceeds are not taxed!!!

The reason that you will not owe taxes on the re-financing of your properties is because loans are not taxed.  Since you are taking out a loan instead of selling the property, no taxable transaction is triggered.  Granted, capital gains can be deferred via 1031 exchange, but you will still lose 5% to 6% of the property value off the top from realtor fees.  Thus, investors can ‘Refi ‘Til Ya Die’ and legally avoid paying taxes on the increased loan amount of their properties.  (In addition to this, the increased interest payments from your new loan will reduce the tax burden of your regular cash flow.)

These strategies can super-charge wealth creation by allowing investors to capture their equity growth for re-investment.  These perpetual re-investments accelerate the natural compounding of your investment portfolio.  It also carries the benefit of consistently increasing your use of fixed-rate debt as a shield against inflation.  Prudent investors realize the incredible power of this strategy, and should seek to capitalize on it to build their wealth during these increasingly difficult times.

Podcast: Download

#16 – Getting Paid to Borrow, by Jason Hartman

In this video from http://JasonHartman.com, you will learn how properties investment can actually help you get paid to borrow money. http://CreatingWealthPodcast.com

The cacophony of advice about where to put your money coming at you from all sides can sometimes be deafening.  We know that. That’s why we try to be the Joe Friday of investing. Remember the character from Dragnet?  ‘Just the facts, ma’am.’

At Platinum Properties, we’re big on facts and when it comes to investing, the facts tell us there is no better place to be than real estate.  One of the multitude of reasons we believe this relates to the title of this entry.  When you buy a piece of income property, taking out a mortgage in the process, you actually DO get paid to borrow money.  At least, that has been the case historically and there seems to be no reason for it to change.

The reason we say you get paid to borrow rests in the reality of inflation, pure and simple.  In inflationary times, your best shield against the declining value of the dollar is high-quality, long-term, investment-grade, fixed-rate debt tied to a piece of rental property.

If you muddled your way through that last convoluted, hyphenated sentence, the payoff is this simple statement – the right kind of debt is good.  Here’s why and how it works.  Let’s assume a dollar was worth a dollar and you bought a house in 1972.  Over the next 30 years, continuing inflation driven by near-imbecilic government economic policy drove the value of a dollar down to $0.24 when compared to the 1972 version.  It’s all about purchasing power.  By taking out a loan that doesn’t come due for those 30 years, you have effectively saved yourself money by paying off the note in cheaper dollars than what you borrowed with.

You just got paid to borrow money, bubs.

Podcast: Download

#57 – Getting Paid To Borrow

Jason reveals how you can actually profit from prudent borrowing. Then Jason and Ben, a local businessman and caterer, discuss inflation and rising food prices. Visit http://www.jasonhartman.com/radioshows/

Podcast: Download