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The other day I decided to sit down and reflect on all of the knowledge I’ve gained through reading, personal mentors, seminars, and inner wisdom.  There are 10 Core Principles for Success that I’ve come up with for myself and I thought I’d share them because maybe it will resonate with you and inspire you to come up with your own principles for personal success.  These principles apply to every aspect of my life whether it’s relationships or business.  So here they are!

1)  Money is an idea and its creation is based on value added to others.

I recently learned this from Greg Habstritt’s “Engaged Entrepreneur” training and it’s added a completely different perspective on how money ACTUALLY works.  It’s essentially a flow of energy; something that is not tangible.  Currency is what you see and feel in your pocket as a form of exchange with value backing that currency but money itself takes on a whole different meaning. 

Click HERE for the audio.  I bet you won’t be disappointed!

2)  Passive income is not a reality, what wealthy people strive for is “Leveraged Income” and so will I.

Like it or not, there is some degree of management that needs to take place in order for money to keep rolling in.  Even if you are an investor like Robert Kiyosaki or Warren Buffett they still work at managing the funds they have and re-investing for more profit.  These mega wealthy guys aren’t just sitting on a beach drinking pina coladas for the rest of their days (not to mention that would be boring).  What they ARE doing though is leveraging their investments and cash flow with scalable systems to free up more time.

From 2020 to 2030, when the older baby boomers will be 64 to 74, America’s elderly are projected to face an income shortfall of at least $400 billion, including at least $45 billion in 2030 alone. This shortfall will affect every aspect of these retirees’ lives including their ability to provide adequate shelter, food, clothing and the basic necessities of life for themselves in their so-called “golden years”.

Many people believe that just blindly turning their life savings over to their bank, financial institution or financial advisor will produce the results they so desperately need to live their desired lifestyle as they age. This seems to be a very popular view with very contrasting results as many of these institutions choose to pour client investment capital into well diversified mutual funds.

However, one can find plenty of statistics that support the fact that approximately 75 to 80 percent of mutual funds under-perform the stock market returns in a typical year. Of course there is no such thing as a typical year and the real performance of funds varies greatly.

The other night I attended the year end meeting for the Real Estate Investment Network (REIN). There was one presentation in particular that really stood out for me.  It was based around 10 habits that a select few successful REIN members have in common.  These successful investors were not interviewed but rather spoken with casually by a REIN expert to determine what has made their business accelerate over the past few years.  There are 10 shared common denominating habits that have set these investors apart from the rest of the crowd.  These heavy hitters implement that extra 10% into their business that most people tend to overlook.

Note: If you only apply only 3 of these habits you’re well on your way to accelerating your business venture.

1) SLOW DOWN!

I know, this doesn’t sound like a habit that will lead to success, but it most certainly is.  The first year as a real estate investor or in any new business venture is a year for learning the basics and setting a solid foundation.  The foundation can include a team (accountant, lawyer, realtor, home inspector, etc.) but also involves learning the fundamentals of your business.  It’s awesome to be excited and enthusiastic about a new business venture but it’s too easy to set yourself up for failure without laying the groundwork in the first year.  Don’t try and buy as many properties as you can your first year as an investor because this is when you WILL make the most mistakes.  Honestly, do you really want negative cash flow, angry tenants, wasted joint venture capital, or any other mess that can taint your reputation?  I know this is hard, but don’t compare yourself to other investors who may be buying properties at lightning speed.  The only person that you can compete with fairly is yourself because you’re only in control of what YOU do, not what someone else does.  Real estate is not a race. 

Let’s talk cash flow for a second…

Well, maybe this will take a little longer than a second, but definitely a worthy topic to understand as a real estate investor or business owner in general.  When most people think about cash flow, a good majority of the time people relate that idea to money flowing into the business; which yes, cash flow IS money coming in.   One of the biggest aspects of cash flow not taken into consideration when determining its value (especially when analyzing a potential real estate investment) is expenses.  When I’m talking about expenses, I’m not just taking into consideration a mortgage but rather ALL expenses that COULD arise and should be budgeted for before actually determining the true incoming/outgoing cash flow of your monetary investment.

Note: This example can also be used for a townhouse or condo, just add the extra condo fees onto the monthly expenses.

Depending on the deal with the tenants, the landlord may be paying heat/water and electrical, heat/water, or the tenant may be paying all utilities but for this example I’m going to go with a common split of landlord paying heat and water and tenant is paying electrical bills.

I’m going to use a simple example of a typical real estate investment; a single family home that is currently rented out.  So let’s say  the property is renting for $1,500 per month to some lovely long-term tenants.  The mortgage payments are $850/month, taxes are $140/month, and insurance is $90/month.  There are also payments of $65/month for water and $150/month for heat.

Now I know people spend less during a recession; however, most recently I was quite surprised to come across this article published in the Edmonton Journal here are a couple of the highlights I found.

•  A record trillion dollars of cash sitting on the sidelines in Canada!
• 10 trillion dollars of cash sitting on the sidelines in United States!
• The worst thing to do is: leave money in cash balances that pay LESS than 0 after inflation and taxes!

Enjoy!

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With a record trillion dollars of cash sitting on the sidelines in Canada, and 10 times that much in the United States, it’s arguable households aren’t taking enough risk to get a decent return on their money.

Derek Holt, vice-president of Scotia Capital Economics, says the worst thing to do is to leave too much money in cash balances that pay less than zero after inflation and taxes.

Holt and colleague Karen Cordes startled Bay Street Monday when their Capital Points letter revealed Canadians are sitting on a trillion-dollar mountain of cash, or $635-billion if you don’t count less-liquid term deposits. Either figure is “astoundingly massive,” Holt says, and in line with the US$3.5-trillion to US9.6-trillion parked in cash in the United States.

Canadians can donate to the Haiti Earthquake Disaster Relief Fund by texting HAITI to 45678
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The Salvation Army has activated its Text to Donate program in support of the Haiti Earthquake Disaster Relief Fund. Canadians can make a $5.00 donation to The Salvation Army’s efforts in Haiti by texting the word HAITI to 45678 from any Rogers Wireless, Telus, Bell Mobility or Virgin Mobile phone. Donors will then receive a message asking them to confirm their donation with a YES reply. The proceeds of each text donation will support the ongoing efforts to serve the victims of the recent horrific earthquake that has left thousands dead and many more without adequate food, clean water or shelter.
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“Our immediate focus is the safety and welfare of those affected by this terrible tragedy,” said Graham Moore, Territorial Secretary for Public Relations and Development for The Salvation Army in Canada. “The mobile giving program is another way to raise funds in support of this vital relief effort.”

All work and no play makes Jack and Jill suffer the “Stressed Out Blues”.

In today’s busy world, we’re so focused on work, work and more work that we fail to reward ourselves with even the smallest of treats like a simple hot chocolate on a cold winter's night.

Real estate investing can be hard on the head because of conditioning that has been passed on from generation to generation. Your parents may have made statements to you such as “You need to pay off the mortgage faster than the bank would like”; “This is the biggest purchase you’ll ever make so be careful what you buy” or “You’d better put aside some money each month so you’ll be able to have a decent down payment for your future home”. All of these statements are stress inducing mindsets that are hard to break but it is possible to snap of this chain of negativity.

For 2010 I encourage you to take the time to recognize your successes and how far you have come on your journey in investing in real estate.

Most people never get what they really want because they don’t know what they really want. The reason I say this is because your actions can be totally opposite of your thoughts, and you’re not even aware of it.

In the past, I noticed that often when I was attended seminars or networking events, I found myself ‘zoning out’ and not paying attention. Whether out of laziness or boredom, I would drift off and not fully receive the value of the seminar or miss the whole point of the topic or conversation. Now I make certain that I have a clear overview of what I want out of every seminar, conversation or meeting every time. I do this by making a list of 3 things I intend to accomplish that are completely out of my comfort zone. This sets my thought patterns into a positive direction, where I now have a mission to accomplish rather than sitting around getting bored.

Clarity also creates a strong sense of leadership. If I were currently renting and wanted to get into the real estate game, I would want to attract someone who has a clear vision of how to get me there, rather than someone who hasn’t any experience or proven results to offer me. This person is most likely going to get me there faster and with less effort due to their own sense of clarity. Their clear sense of direction will always prevail in any situation, as compared to the person who has problems figuring out what it is that they want to do.

Planning for your future and retirement relies on preparing the right kinds of long term investments. Everyone needs to have an investment for their future to ensure financial sustainability, and there are many different types of long term financing investments to choose from.

We both know that you will not be able to work forever. There will come a time when you will no longer be able to work, due to health problems or simply aging. So, what will you do for an income when the time comes to retire? This is why planning your long term investments carefully is so important.

Perhaps you enjoy the security of simply relying on government policies and programs to take care of your future needs, but this is not a realistic plan. Take a look at what has happened in the United States to the Medicare and social security programs – It is scary! Social security is in serious trouble. Though politicians are currently working to repair the problems, chances are that in another twenty years, or less, there will be little to nothing left in the social security budget.

OTTAWA, September 3, 2009 — Housing starts are expected to rebound in the second half of 2009 and will reach 141,900 for the year. Starts will increase to 150,300 for 2010, according to Canada Mortgage and Housing Corporation’s (CMHC) third quarter Housing Market Outlook, Canada Edition* report. The overall forecast totals for housing starts remain unchanged from the second quarter release.

"Economic uncertainty and lower levels of employment tempered new housing construction in the first half of this year", said Bob Dugan, Chief Economist for CMHC. "In the second half of 2009 and in 2010, we expect housing markets across Canada to strengthen."Improving activity on the resale market and lower inventory levels in both the new and existing home markets are expected to prompt builders to increase residential construction.