My Wealth Journey

I invested in a few single family properties in the state of Texas and Utah in 2006. When I got into the properties, I was not one of those investors expecting to make a 50% gain on my properties in less than a year. With my Texas properties, I was hoping for a steady 3-5% gain with either cashflow positive or close to cashflow positive on the properties factoring in depreciation tax savings. So far, they have performed just as expected. I had one home that was vacant for a few months which no landlord enjoys but it’s part of owning rental properties.

My Utah properties are a bit more negative monthly but the amount is not something I can’t live with. I originally had hope to hold on to the properties for about 2-3 years and then sell them. However, with the current state of the housing market nationwide, this is looking more and more unlikely if I’m looking to make anything. I may be able to break even and that’s it if I sell the home in a year. The market in Utah hasn’t gone bust yet like in Las Vegas or in Phoenix but has slowed down quite a bit. Most of Texas is still relatively flat in gains, although central Austin, closest to downtown is still experiencing low DOM stats.

Looking back, would I do the same? I would still have invested in the Texas properties (Austin and Fort Worth) since the numbers worked out, but would have passed on the Utah properties. I was about a year too late with Utah.

The problem now, is I’m looking to buy a home for my own personal residence within a year or two and realize it won’t be too easy to unload a home to free up some cash as it would be if I had simply invested in a CD or in the stock market.

News just broke that JPMorgan is picking up Bear Stearns for $2 a share, a huge discount from the $50 a share just last Thursday. You don’t have to be a rocket scientist to see that those numbers are HUGE. Is Bear Stearns the only firm that made the poor choices in regards to the subprime loans? Don’t be surprise if any of the other big Wallstreet Firms come out and announce that they are in worst trouble than previously announced.

So the million dollar question for you average investors, is it time to get out of the market until everything settles down? The market has been down 15% since the all time high reached in October of 2007. Lots of investors have been betting the downward trend will continue.

I don’t think now is the time to be dumping in money into the market all at once thinking we have a bottom. However, if there are good companies out there trading at a huge discount for no reason, it may be wise to start putting in incremental amounts of money into the stock to lower your cost basis. A popular strategy is to buy more when a stock drops 10%. Just be careful you are not trying to catch a falling knife.

The dollar is getting weaker and weaker by the day. Gold has crossed $1,000/ounce while oil has climbed to over $110/barrel with no end in sight! Meanwhile, the Fed almost has no choice but to continue to lower interest rates in an attempt to save the credit markets with the goal of hopefully making a speedier recovery for the housing market gone bust.

So how does an average person profit from all this? Well, if you believe Gold and Oil will continue to rise, the easiest way is to invest in the United States Oil Fun, ticker USO, and the streetTRACKS Gold Shares, ticker GLD. In laymans terms, both of these mirror the price of oil and gold. Some investors have invested in mining companies such as ABX, NEM, AEM and AUY with the expectation that as gold goes up, the mining companies’ profits will rise. This is generally the case, but the price of these stocks also depend on their management. Some would rather bet on the actual commodity than a company’s management team that I know nothing about.

I think oil will average about $95-$105 a barrell this year due to the weakness of the dollar. Gold should continue higher but is definitely due for a small pullback and should stay above $1,000 an ounce for at least a few months in the summer.

I personally have positions in these commodity stocks: AUY, SU, RIO, COP, XTO.

In my never ending quest to find “the business”, I’ve started to put time in creating a system to receive and distribute leads of all kinds, ranging from mortgage leads, auto loan leads, debt leads, insurance leads and more to come. This isn’t a new idea at all, as there are many big players in the space such as LowerMyBills.

I don’t believe that you have to be the only unique company in the space to make money. Leads are here to stay and as some companies are struggling with high overhead due to the credit crunch, I hope to be in a good position to start making some money.

The key will be to generate the leads. I’m fortunate that I’ve had plenty of experience with SEO and affiliate marketing that I have generated leads before. However, in the past, I would just direct consumers to a 3rd party site and just receive a fee on a per lead basis. However, with my own system and business to distribute the leads, I’ll be able to afford to have spend more per lead and increase volume.

After being expose to the lead industry for a number of years, I’ve found there are a lot of very shady affiliates/lead sellers who will sell you recycle data. As a lead aggregator, one must be careful and avoid these guys like the plague. They will ruin your customers’ experience and your business will get a bad reputation.