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Background
• Born and raised in Seoul, Korea• Watched parents buying and selling real estate• Developing country with high appreciation• Moved to Canada in 1987• Family bought a house in North York and a warehouse in Peterborough
during the peak of 90s real estate boom• Wrong side of Finch. • Tough time with commercial real estate: NAFTA, under water, commercial
real estate mortgage crunch• Eventually USP as a tenant: Triple A tenant. Saw the light• Opposed to selling the warehouse but could not convince the parents
Personal Journey
• Given a second chance
• Went through 3 different post-secondary schools: Engineering, Fine Arts, IT
• IT Manager for an Architectural firm for 12 years
• Saw real estate as a way out
• Wanted to become rich. I thought I was chasing money
• Looking back, I realize that it was Freedom I was after
• Academic approach: books, seminars, workshops
• Needed support group and needed to take an action
• Joined an investment club
• Looking for cashflow:
• Toronto House. Invest in Chatham, moved on to Hamilton
• Along the way, learned the illusion of cashflow
It’s an Individual journey. There is no set path• We are all have different desire and different preference
• Not about getting out of job
• We can all be more empowered and have more choices in our life
• Create memorable moments and experiences with family and friends
• Extra income = Choices. Insulation. Buffer. Safety
Who here has
• Been interested in investing for a while?
• Been studying real estate investing?
• Been to meetups, workshops, seminars?
• Want more control and choices in life?
• Why haven’t you started or making progress?
• It’s not about knowing what to do but having the reasons. The why to do it
Part 1: Principal of investing
• Money is means to an end
• It’s about creating the life style we long for
• Why do we work?
• Chasing the pot of gold at the end of rainbow: images on TV, billboards, magazines
• Go to school, get a job, so that you can have a good life
• Work hard. Save money. Don’t get into debt. Pay off the house. Retire and live the life
Retirement
• Expectation of retirement at 65
• 40 years of working. 20 year of retirement?
• Unreasonable
• Falling wages, inflation, longer life expectancy
• Friend’s parents
• Need $4,000.00 / month
• $50,000 / year for 20 years
• $1,000,000 retirement fund
• Change in health. Medical conditions
• How about inflation?
• What is real inflation? 3%???
• Work and get paid. Stop working, no pay: janitor, doctor, lawyer
• Modern day slavery
• We all want to be rich. How do you measure?
• Definition of Wealth by Buckminster Fuller
• Standard of living has cost associated with it. An outflow
• Investing is about Building a system
• Active income to Passive Income
• Investing is about becoming financially free
• Free from the bondage
• Moving from “have to” to “get to”
• What will you do?
• Free. You cannot fail
Part #2 – What it means
• To create income• Come out of school. Work. Make money. Need more money. Work more. • Need to earn more. Back to school. Suspend life. Work. Repeat
• What is working? • What is our resource? • What are we really trading???
• The only truly precious universal resource?
•TIME• 24 Hours. 86,400 seconds. Birth to death
• A finite resource
• < Jelly bean video >
• Time a.k.a Life
• Time exchange system
• Better Job = higher time value
• Time is our resource.
• How would you invest it?
• Would invest if you lose 60% every single time?
• It’s about finding a way to retain as much time for our selves
• Have means to spend it the way we want to
Part #3 – The Playground
• Invest to break away from “time exchange system”
• We exchange our resource, time/life, for money
• If we are exchanging our time a.k.a life for money. We need to investigate what money is
• Money is like a religion
• We are trained to work for it. Earn it. Spend it. But never question it
• Where is it from?
• How is it made?
• What is money???
History of money
• Beginning of civilization
• Barter system
• Gold and Silver = Money
• Medium of exchange
• Divisible.
• Portable.
• Long term store of value. Etc
Early bank
• Vault/safe/bank issues note for gold in storage
• Trading paper
• How to make more profit?
• Discovered Reserve Ratio
Money – Gold standard
• Gold standard
• Dollar was claim check
• Same as claim check for shirt at dry cleaners
• 20 Dollars in Gold coin payable to the bearer upon demand
Currency – Monetary System
• Gold standard no longer (1971)
• Money became currency.
• (no more gold. No more shirt)
• Monetary System
• Fiat currencies are based solely on confidence and always return to their intrinsic value of zero
• Money supply never stops. Price will ALWAYS go up
• Production of money has interest built in
Money supply
• 80’s million dollars• 90’s billion dollars• 2008 trillions dollars
• How long is million seconds? • 11.5 days• How long is billion seconds? • 32 years • How long is trillion seconds? • 32,000 years
Increase in money supply
• Took 200 years to $875 B
• $5T since 2008
Rules have changed
• World is upside down. The rules have changed.
• Old rule: Save, don’t borrow
• New rule: Spend, and borrow
• > buy assets and use credit
• ex: friend with $100K in savings and was approved for a house on downtown
• Still has $100K and renting
• ex: prices are soaring high in Classic car, Wine, Arts
• Money is trading tool that stores the economic energy that is your time and freedom whereas currencies leak them away
• Inflation. Hidden tax
• We think we are walking up, but we are on a downward escalator
• Fractional Reserve Ratio (modern money mechanics)
• Foundation of banking system. Currency multiplier
• Canadian Ratio: 1:10
Part #4 What can we do?Real Estate Investing 201• We now know how to create freedom and choice: passive income
• What we are trading: Time
• What money is and how it sets out the rules
• How to apply the rules in real estate
• Real Estate is leveraged. A unique vehicle
• Always borrowers and lenders
• Hard (Property) and Liquid (Money)
• Hard asset is insoluble and slow• Liquid asset is flexible and fast
• Rentals: can be 20%+ return on paper. • Reality can be very different. Head aches and heart aches
• Lending: high return and low(er) risk. 6% to 18%+• Advantages of real estate investing and reduced risk• Can learn about investing from safety• Can start with less money
Purge and Reboot. Version 2
• We live in a peculiar time
• Either play short game or long game.
• Medium term exposes you to too much unknowns in this change times
• Work the money – fast, flexible, liquid, no tenants!
• 15% return double your money in less than 5 years
• With the earnings, purchase high quality hard assets
• Piggy banks. Safety
The resources we have
• Job. Ability to borrow is more important than ability to save
• Use the job you want to get out of to your advantage
• Equity. Money gained without working. Cheapest credit
• Take advantage of the purchasing power eroding inflation
• 3% interest can be tax deductible
• Work the principal. Invest the earnings
Part #5 – How I can help
• Know How
• We How
• I How
• Hack the sequence. Reverse the order
• Better yourself.
• Protect your dream – guard yourself from naysayers
• Surround yourself with people who empowers
• You will meet the right people with the right knowledge and experience
Life isn’t unfair. We don’t understand the rules
I have a message
• I have a message and would like to reach as many people as possible
• It’s an interdependent relationship
• Provide value.
• Build life long relationship
• I am in search of Freedom, Empowerment
• Helping others who are on the same journey
• Not here to tell you to quit 9 to 5. I am here to address the lack of awareness and lack of control and choice in our lives
Part #6. The goal – Make money irrelevant
• Kennedy kid
• Man walks into a bar with an ostrich and a cat
• In the purest form, no need to own anything if you master the flow
• Make money none issue. Make it irrelevant!!!
