I was browsing my local library just a few weeks ago when I came across an audio CD program called the Weekend Millionaire’s Real Estate Investing Program.  In the corner was the tag “How to get rich in your spare time”.  Upon closer inspection of the CD case I discovered the program was written by Mike Summey & Roger Dawson.  I had never heard of either, but decided I would listen through the progam.

I thoroughly enjoyed listening to all the CDs, and am now on my 2nd time going through them.  There is a vast amount of knowledge contained in this set, and some great advice.

The main principle of the program is to explain how it is possible to get rich over a period of 10 to 15 years simply buy purchasing 1 investment property per year. The authors go to great lengths to show how this is possible, and they give very many examples of how to do it.

Mike Summey handles most of the “ins and outs” of searching for and locating property in the Weekend Millionaire’s Real Estate Investing Program.  Roger Dawson mostly deals with how to negotiate with sellers.  Both are well experienced in Real Estate, and their advice certainly sounds good to me.

As with all Real Estate purchasing programs, the authors teach you how to become an investor.  If you follow their system of purchasing 1 investment property per year for 10-15 years, you would certainly become a millionaire.  This is not a get rich quick scheme – far from it!  The system takes 10-15 years, and they are quite clear about that.  However there is nothing to stop you acquiring more than 1 property per year.

This program focuses on purchasing single family homes. The authors claim that single family housing is the “bread and butter” of Real Estate investing.  These homes attract decent tenants, and are easiest to rent.  Although they talk briefly about multifamily and commercial properties, they recommend “cutting your teeth” on single family dwellings first.

A lot of time is spent on cashflow.  This is one of the buying criteria.  Mike Summey teaches that you do not look at the advertised price of a home.  You must calculate its NOI – Net Operating Income.  So you basically start by calculating how much it would rent for, then subtract all your costs associated with ownership (taxes, insurances, property management, repairs & maintenance, etc).  This will then leave you with a figure from which you will have to pay your mortgage and your profit.  If you can get the right balance of financing rates, and expenses you can then use the NOI to calculate what the wholesale value of the property is. This will be the maximum offer you can make on it.

Cashflow can be low for the first few years, but as time goes on rents increase.  These small increases in rent add up significantly over the years.  Eventually your tenants will have paid off your mortgage completely. You will now be receiving a high payment for very low expenses.  If you multiply this by 10 or 15 homes, the amounts can be significant.  Your cashflow is really passive income, and over that period of time your passive income stream will become very high.

The authors are also strong advocates of using property management firms.  This way the Real Estate Investor can concentrate on actually buying property instead of fixing appliances, unblocking toilets and so on.  A property management firm will obviously charge for their services – typically 8-12% of monthly rent.  They handle renting the home, screening tenants, dealing with repairs, contractors etc, evictions, and more.  Having someone else manage the property in this way frees up the investors time significantly.

Conclusion

Did I enjoy this series?  Definitely.  My favorite sections are those on power negotiation by Roger Dawson, but I really like hearing about all the examples of properties these guys have bought.  They are good at coming up with creative financing, and have managed to buy homes with $0 down and private mortgages from the owners.  I had not realized that would be possible.

I would certainly recommend readers consider this strategy for Real Estate Investing.  There is a lot of wisdom contained in the audio program.  My mp3 player is loaded up, and presently I am listening to the entire thing as I cycle to and from work every morning.  There is so much more I want to learn about Real Estate Investing and negotiating!

You can visit the author’s website at http://www.weekendmillionaire.com for more information and to view their product selection.

Last night, the wife & I attended our first ever Multi Level Marketing (MLM) presentation.   I have heard lots about MLMs over the years and decided it was time to investigate it for myself.

Multi Level Marketing is an interesting business model.  There are some products to be sold, but you really begin to make money when you convince other people to sign up as representatives.  Typically the products offered are things like nutritional supplements, health drinks, skin care etc.

The scheme we looked at is called Fortune Hi Tech Marketing (FHTM).  FHTM are quite diversified with their product range, so in addition to the typical items mentioned above, they offer long distance phone service, cell phone service, Satellite TV though Dish Network, and more besides.

How it works

Basically if you sign up someone as a customer you make money.  Now with companies like AT&T, Verizon, T-mobile and so on, it shouldn’t be too difficult to persuade your friends to sign up as your customer when they are shopping for a new contract.  If they do, this will generate points for you and you will then receive customer usage points and you receive a portion of their phone bill every month!

Is FHTM the MLM for you?

But you don’t stop there.  If they also are on nutritional supplements or skin care, try to get them over on to the one you offer.  Then again you will receive a percentage of everything they spend.

Then there is your own spending.  If you change your point of sale to your MLM company, then you are getting something back on all the calls that you make, or each time you pop a vitamin!

Where it gets into the big money is when you sign up your friends or customers as a business representative.  This is going to cost them a few hunderd bucks, but you get  a chunk of that right away.   Then every time they sign someone up, you get a piece of that too.  And for every customer they get, you get a percentage of their bill sent to you.

If you can build up a team of representatives, you could easily replace your income – but only if your representatives continue recruiting and aquiring points.

Is it for me?

The presentation I attended was in Canada, and while the principle is the same, I kind of felt cheated.  The presenters kept talking about how everyone uses a cell phone and the benefits of having a percentage of their monthly bill given to you.  HOWEVER, FHTM have no deals with any cell companies in Canada!!!  In other words he was prepared to market something that is impossible to sell here.  I found that to be quite deceptive.

FHTM do offer a long distance phone service in Canada, as well as a Voice over IP offering (VoIP digital phone service), but unfortunately these are not competitive.  For example the long distance phone service would cost me 19% more than my current provider charges (and I don’t have a special long distance provider – I just use the company providing my landline).  As for the VoIP service – it is $38 per month.  Not very competitive….  Additionally the only internet provider they offer is dial-up.  You’ve got to be kidding!  What use is that in the city?  The roadside assistance package will only tow you for 15 miles (24km) and costs a minimum of $191.40 per year.  My current provider (PC Mastercard) costs $99.97 for both my vehicles and will tow up to 25 miles (40km).

When you break it down, the major advantage of being part of FHTM comes only when you sign up other people.  Here in Canada that is going to cost the party who signs up $545 plus $65 month for 3 qualifying points (that they are not already using and cannot switch their point of sale to, so that $65 is an out of pocket expense, albeit a legitimate tax deduction if you are running it as a business).   This obviously makes it very pyramid scheme like.

Can someone do well at it?  Absolutely!

Is there any selling involved? Absolutely!

Although FHTM claim there is no selling, there is.  You are basically selling a hope of getting rich through residual income.  If the figures come out to be the same as any other MLM then 85% of the people that join will never acheive the dream being sold to them and for which they are paying $545 +$65 per month.  According to FHTM’s own literature the typical income participants make is between $8.30 and $417 per month.

Now if a high end typical participant is pulling in extra $5000 a year income that is pretty nice, especially if it is residual.  But most people are signing up in the hopes of replacing their actual income.

At the presentation there were probably a good few who have completely replaced their incomes as a direct result of joining FHTM, but these people are working hard at their new business.  They certainly deserve to do well.

Am I going to sign up?

At this stage I don’t think so.  Part of me would really like to as I think I can do well at selling (Dad always told me I could sell snow to the eskimos).  I would love to get a bunch of people signed up and generating income on my behalf, great use of leveraging my time & energy.  However the product lineup stinks.  Even when the big retailers come on board, the discounts they offer are puny.  For example I can save 2% at Walmart provided I do some part of the shopping online (i.e. order a $200 gift card for $198 + shipping).  Same goes for Best Buy and a bunch of other retailers.

When I looked into their travel offering (FHTM Travel is powered by Travelocity) the prices were pretty close to other online retailers, but they wanted to bill in US dollars.  For Canadians that means it has just become more expensive to use comapred to booking directly with the airline!

Now in the USA the deals are much better.  The prices are lower all round (for joining up, lower monthly costs, and much more competative products) and so the potential for income is so much higher.  If I lived in the States, I probably would sign up.  If the Canadian offerings were to imrpove (by offering the 4 cell phone companies, a Satellite TV company – preferably Shaw Direct [formerly Star Choice], and phone calls at competative rates) then I would certainly consider it very seriously.

Conclusion

At the end of the day MLMs do make some people very rich.  If you are good at selling people the dream of financial independence you stand a good chance.  But with such a weak product offering in Canada, I don’t think I can put my name to it.  I am not into getting people to sign up for services that I know are not the best options out there.

In my view, the US offering is the best, the UK offering is good, but the Canadian is a let down.

If you have any experiences with Fortune Hi Tech Marketing (FHTM) or any other MLM stories, feel free to share them via the comments!

Becoming financially independent is not easy.  The journey is long.  As I have said elsewhere, financial freedom is about building wealth – a process that takes time.  It is not about get rich quick schemes.

An important part of the journey is deciding who to listen to.   There are 2 types of advice.  Good & Bad.  Many people pay a lot of attention to Bad advice.  So when it comes to wealth building, creating passive income, cashflow and buying assets and liabilities, who are the advisors you listen to?

Most of us pay a good deal of attention to our family.  It may be the family we grew up in (e.g. our parents), or it could be members of our present family (spouse, brother-in-law etc.).  Next on the list is our friends, and that is often followed by our bank or financial planner.  The question is, out of those people, how many of them are financially independent?

If you are like me, you don’t know many people who are actually financially independent (people who do not have to work because their assets generate enough money each month for them to live on).  Most of my friends are firmly in the middle class, and my family (including my wife’s family) are bordering on being poor.  Interestingly they all have lots to say on the subject of money.  The question is, should I take their advice when it comes to financial matters?

Of course not! The people I want to pay attention to are those who have actually been succesful financially, and who have managed to escape the rat race.  Names such as Robert Kiyosaki (best known for his book Rich Dad, Poor Dad but who has written many other excellent books on becoming financially independent), T. Harv Eker, Donald Trump, even Derek Foster and Napoleon Hill (whose book Think & Grow Rich is available to read right on this website).  It is my view that these people are worth listening to as they have proven themselves.  They have found ways to generate passive income which provides them with enough cashflow every month to live on.

Right now I am looking for more people who are financially free.  I hope to meet them in real life and get to know them.  I want to learn from them.  I will listen to what they have to say.  As for friends and family who are plodding along working to live and living to work…..I’m not paying much attention to you when it comes to the subject of money!

So who do you listen to?  Family & friends?  Do you have a trusted advisor?  Have you got a mentor who is further along the road to financial independence than you?