I came across a great news article from PBS which described the rise of alternative small business lenders online.
This is a great article because it reinforces several of the messages in my book; Invest Local.
There is a need for financing choice for small businesses. Bank loans are too complex and many are rejected.
Small businesses need capital and want to borrow for upgrading or adding productive assets.
Small businesses are willing to pay great interest rates to obtain this financing.
In some of the feedback I've received about my book, investors who are used to traditional 'retail' investments say they don't believe that its easy to get returns of 9% to infinity using some of the strategies I detail in the book.
This news article demonstrates how and why there are tremendous opportunities out there.
Please take a moment to share this blog with others and if you haven't already, BUY MY BOOK!
"Should my business own the real estate its located in?"
Many business owners and buyers are obsessed with owning the building where a business is located. I tackle this question and show you different ways of looking at it.
Yesterday's post reminded me of the story of the broke bushwhacker.
He was the inspiration for one of my 15 free finance articles which discusses the need to match financing tools with asset lifespan.
Enjoy.
Also, I'm almost done working on my 16 week curriculum for the 'Business Buyer Secrets' study course/coaching program. I'm probably going to give it a nicer name as well. Stay tuned.
If you're going to build wealth and have a comfortable life and retirement, you need to keep from getting into bad debt. FSN host Kerry Lutz interviews CPA Sandy Botkin about the top 10 reasons people get into trouble with debt.
One of the ways that direct lending has evolved is P2P or 'Peer-to-Peer' lending. In the US and the UK there are website communities such as prosper.com which allow people to directly lend to each other by taking a small position or piece of an overall loan.
These sites, and copycats, have been barred from operating in Canada by banking and securities regulators.
Click 'play' below to hear an interesting interview from the FTM Weekly Podcast in which Tommy Cloud, Certified Financial Planner, explains P2P lending to Jerry Robinson and how he actually helps his clients obtain superior yields using the Prosper.com community.
Time for a little story about a truck loan that didn't quite work out. The moral of the story is that you need to have a process and an idea of what you're doing when you get involved in a private lending deal.
Enjoy.
Don't forget to buy my book.
Also, to download the 15 business finance articles for free, just put a 0 in the price box when it asks you to put in credit card information.
In my book I talk about all the reasons I'm not invested in income properties right now. I talk about how asset prices for income producing properties are related to interest rates and since those can't get any lower, the likelihood of continued increases in income property prices is unlikely.
There is, however, a much bigger problem for real estate in Canada. People are maxed out and if interest rates rise people will start to find their homes un-affordable, especially those who haven't locked in a rate.
This means there is a potential 'correction' for the market. People who can't afford their new mortgage payment will try to sell the house, more supply and reduced demand because of the same rate increases will lead to lower home prices.
I don't expect a big nominal price crash in places like Moncton, but I think people in Toronto may be in for a big surprise over the next few years. Also, a drop of as little as 10% will wipe out all the equity of most buyers who bought in the last couple of years. This turns these people into little more than debt-serfs to the banks as they'll be paying on a mortgage that's worth more than the home its secured against.
What I've seen in my own neighbourhood is that home prices have been stagnant over the last 18 months or so and more 'for sale' signs are appearing all the time.
Whenever the price of one of your assets remains constant, you are actually losing value. This is because of inflation. Depending on how you measure inflation, this means that houses in my neighbourhood have actually lost between 2.85% and 9% over the last year. (Read the inflation chapter in my book to understand how we're all in a race against new money creation by central banks.)
Banks make money by making mortgages and collecting interest and so they often 'talk their book' by trying to tell everyone how great things are.
I found this recent YouTube video by Patrick Doyle to be pretty funny. I especially like when he satirizes CIBC economist Benjamin Tal as a 16th century Dutch Tulip Analyst.
Take a look:
Also, just for fun, type 'Canadian Real Estate Bubble' into Google or YouTube. A lot of people are talking about this.
FREE -- Last night I decided to put together 15 of the articles that I had written for eNBusiness magazine that are still relevant today. The package can be downloaded for FREE. My hope is that you pick up an interesting tidbit or two.
A great radio interview with Danielle Park wherein she discusses with host Kerry Lutz how the big brokerage firms use high-frequency trading to steal from you.
In my book I use an example of stocking up on ice cream to get a superior investment yield. When the Sobeys flyer came yesterday, I decided to do a step-by-step illustration using my financial calculator. Let me know if you like this and I'll do more of them...
I submitted my text to Create Space for review and got back some warnings about low-resolution images in the book.
After going through it again, I realized that I also had some colour graphs in a book which is supposed to be black and white. So I fixed those issues as well.
I went through things again and made a few slight changes.
Here's what I really want to talk about; today I had a totally serendipitous conversation with a building contractor. I met him at his office and while I was there, a courier came to deliver a package.
He opened it in front of me and showed me a 2.5ct teardrop diamond. He also showed me the appraisal certificate saying it was worth over $65,000. I told him about the book project and how I had just written the section on collectibles in the asset class portion of the book.
I asked him how and why get got into gemstones and his answer could have been quoted from the book. "As a contractor, people are always looking for personal guarantees on contracts for buildings and financing. They're always trying to assess my property and see what I own that could stand as collateral. Nobody I do business knows about these gems and if anything were ever to go wrong, I can move on with substantial wealth in my pocket."
He then went on to recount the first time he had purchased a stone, it was a ruby worth only $3,000. He trades them in and buys and sells them, he uses three different dealers.
He invests a lot of time expanding his knowledge of this particular type of collectible investment.
I'm hoping the book will help many readers realize the pros and cons of developing a truly diversified portfolio of assets.
I just sent the book off again for a final review by Aaron. Let's see how much he highlights for review...
Okay, its been a busy day entertaining the kids but I managed to get a bunch of work done on the book after bedtime.
I completed the remaining sections on the 7 asset classes.
I shortened the 'about the author' section to two pages by deleting a lot of fluff.
I added systemic risk to the risk section
and I put the whole thing in a template that I downloaded from the CreateSpace website so I'm sure it will fit nicely into a book.
I also took some time to write a blurb for the cover:
Invest
Local is a peek into the thoughts of local deal-making expert David Barnett. His experience and education in business
brokerage, small business financing and capital markets gives him an insight
into what’s wrong with the common financial planning advice available today and
how you can make superior investment returns while mitigating risk and helping
your local community.
This is not
a book about social enterprises or charity.
It is a book which guides you on how to find and obtain superior returns
in the community where you live, far, far from the promises of Wall St.
Barnett
offers step-by-step guidance on how to earn three-digit returns by doing car
leases, secured loans, inventory financing, buying accounts receivables,
financing mini and mobile homes, operating leases on machinery and more.
High yield
investing does not have to mean high-risk investing.
I'm getting excited because I think the time to send it to print may be quickly approaching. I'm thinking more and more about promotion and I can't wait to speak to my Clarity expert next week.
