That’s pretty blunt language and with good reason. An amazing run of incredible investment returns is not likely to happen, and huge cash infusions are almost laughable. Let’s look at the first option: return on investment. The Harvard study confirmed what many of us who have been watching the situation already know. Pension managers at the state and local level are already desperate, which leads to increasing their investment risks, a sad ploy destined to lead to bigger losses the next time around. That leaves cash infusions.

Cash? From where? Taxpayers are at the end of their rope and covered workers are realizing the true extent of the unfunded pension issue. Public retirement systems that seemed exceptionally solid two decades ago have now been shuffled to the back of a long line of people and programs holding their hands out, ranging from bondholders to Medicaid payments. Add it all up and there’s about $18 trillion coming due.

The bottom line is that it’s time for public workers to take a serious look at getting out while the getting is, if not good, at least better than it’s ever likely to be again – and they’re clinging to life support as it is.

There’s one slim hope, that these governments can institute major reform and work themselves out of the hole. Unfortunately, historical evidence is scant that politicians and bureaucrats will be able to summon the intestinal fortitude to institute that kind of large scale change. Before you know it, public pensions may be a thing of the past.

The Heroic Investing Team

Flickr / Mr. Thomas

As all good capitalists out there are aware, the market will find a way to provide. That’s where private lending steps into the picture. There’s nothing fishy or off-the-wall about it. Private lending has been around for a long time and there are some features of it that make a lot of sense for investors who have a chunk of money on the sidelines, looking for something to do with it.

Cons
The problem with hard money lending, and there can be a few if you aren’t careful, is that often there is a good reason folks can’t qualify for a regular mortgage. Maybe they have too high of a debt to income ratio. Could be there are other financial issue affecting their creditworthiness. The basic point is that a private loan is considered to carry a higher risk than other types.

Pros
When it comes to the upside of private money lending, there are two very good factors that make it appealing. The first is that a private loan normally carries with it a much higher interest rate, which is great news for the lender (you). How much higher? There are, of course, no guarantees in this or most other types of investments, but Heroic Investing founder, Jason Hartman, and some of his clients who have been using this method recently have been able to earn 12.25% in addition to being paid a $500 upfront funding fee by the borrower. The other factor that makes hard money lending so appealing is the short term nature of the loan. Most notes only run about four months.

One facet of this investment type which doesn’t seem to qualify as either a pro or con but merely a fact, is that the loan is not secured by income or perceived creditworthiness but rather by the value of the underlying asset, in this case the property itself. Private money lenders such as Hartman and his clients also have the first position on the loan in the event the borrower runs into difficulty. This simply means that as the lender you would stand to take possession of the property if something goes wrong with the payback schedule.

The big question that likely pops into your head is who exactly are these borrowers? As mentioned earlier, hard money lending is often associated with people desperately trying to avoid foreclosure or unable to meet the stricter standards of today’s traditional lending environment. What Jason has managed to uncover, though, is a set of borrowers with excellent credentials but due to the nature of their business model, specialize in properties that don’t fit meet the definition of a bank’s typical client. The borrowers we’re referring to are local market specialists who have partnered with Jason and his Platinum Properties Investor Network to recommend first class investment opportunities in income property purchases.

These local specialists like to buy distressed or other types of properties in need of a little rehabbing, fix them up, and either offer them to the network or sell them locally. This type of property has been classified as “transitional” by the lending industry, making it hard to qualify for that kind of financing. Once he became aware of the situation, Jason quickly realized that it was a perfect symbiotic solution to make private short-term loans from his own pocket. These specialists have already been vetted to the extent that a business relationship existed even before any money was loaned. Many of these people have spoken at Jason’s educational events and sent many a fine property his way. The point is that these are not random strangers wandering in off the street. Does the potential still exist for a default? Absolutely, but you’re likely to be well compensated for the additional risk, which hasn’t proven to be a risk at all yet.

Please feel free to contact Jason at 949-200-8008 if you have any questions or are interested in learning more about how to increase your nest egg through private money lending. Keep in mind that we NEVER recommend investing money you can’t afford to lose, no matter how tempting the opportunity sounds. Translation: don’t mess around with your family’s food or rent money!

The Heroic Investing Team

Flickr / 401k

It’s all about price
Another way to say this is that you should never, EVER pay too much for a property. What long time investors have come to realize is you make your money when you buy. The price at which you will eventually be able to sell the house is essentially set, decided by the market. This means your profit lies in that area between the eventual price and what you pay at the outset. Obviously, you want to pay as little as possible, and should never go into negotiations without a firm upper limit in mind past which you won’t go. A good rule of thumb is never pay more than 65% of the after repaired value of the property. Pay more than that and there’s a good chance you’re not going to make a profit on the backend.

Be stingy with your money
Let’s say you’ve got half a million in cash reserves sitting in the bank. You certainly have the means to buy a piece of real estate outright, without a loan, but does that mean you should? Absolutely not! Long term success in real estate is largely determined by how little of your own money you manage to put into the deal. It’s all about the financing, baby. Think of it like this. You could buy a single property outright for $500,000 or, more wisely, could finance five similar properties by putting 20% down on each and getting your friendly neighborhood banker to pony up the rest. To a certain extent, investing in income producing properties requires us to disregard the old fashioned notion that debt is bad. ALL debt is not bad. In fact, a fixed-rate, long-term mortgage tied to a piece of income producing property is probably the best financial decision you’ll ever make. The bottom line: put no more of your own money in the deal than you have to.

Hire renovators
Whether flipping houses or renting them out, it’s rarely a good idea to do your own renovations. It takes too much time, and time is your most valuable commodity. You make real money in this business when you’re out beating the streets for new deals, not whilst trying to save a buck personally hanging drywall. Early on, it’s crucial to assemble a team of go to renovators who will do good work fast, and at a reasonable price. If you got into the real estate business because you enjoy remodeling, it might be time to give that decision another think. Forget the enticements and do-it-yourself come on’s from practically every show on HGTV. They’re not in the remodeling business. They’re in the television advertising business!

Find motivated sellers
Don’t make the mistake of getting hung up on the curb appeal and interior condition of the property itself. These are secondary concerns to finding a motivated seller. If you’ve got a seller who is desperate to unload, you’ve got the makings of a great deal no matter what the place looks like. Not to be too macabre about it, but look for the Four D’s: Death, Divorce, Disaster, Disease. These events create motivated sellers, and you’re helping them out by taking the property off their hands. These days, it’s typical to find a motivated seller languishing on the verge of foreclosure. While you might feel a twinge of guilt at driving the price down, down, down, you shouldn’t. You’re actually doing them (and their credit) a very big favor by stopping the foreclosure process dead in its tracks.

Finally, we’d like to suggest you pick a system that works and stick with it. Nothing fails quite so readily as an investor with the stability of a butterfly. He’s all over the place. Flipping houses today, buying and holding tomorrow. There’s a million different approaches and each is effective for someone. Find the one that matches your personality and work it like you mean it.

The Heroic Investing Team

Flickr / Rego – d4u.hu

Is the suspense killing you? We’re talking about the podcasting revolution.

If the space around you is filled with a deafening silence or perhaps a few stray cricket chirps, you haven’t yet grasped the possibilities. More than simply uploading audio or video files to the Internet, the heart of podcasting lies in a bit of software technology called RSS (Really Simple Syndication). To understand syndication, let’s look at the real world of newspapers.

Say your name is Carl Hiaasen and you write a column for the Miami Herald, which it just so happens he does. To expand his audience reach and income possibilities, Mr. Hiaasen could license his content to other newspapers around the country, offering the rights to print his weekly column in return for a small fee. With Internet distribution making the whole process ever so easy, newspapers that syndicate Hiaasen’s column simply wait for it to show up in their inbox at the appointed time. They format it, stick it in the paper and, voila, a world renowned novelist is in their podunk hometown paper.

Back to podcasting. RSS technology allows you to post audio or video content and have it automatically delivered to subscribers. Believe it or not, the seeds of what could be a great business reside in RSS, ready to spring into full bloom for those with the wherewithal to understand the potential. Here’s the idea in a nutshell. Say you’re an EMT with 20 years of experience. For practically no outlay of cash, you could begin posting a weekly ten minute audio podcast built around your knowledge of first aid to iTunes, or any other directory you favor. A simple process automatically delivers new content to subscribers.

The whole thing works very similar to e-newsletter subscriptions except the medium of podcasting takes advantage of our collective affinity for the human voice. What topic should you podcast? Here’s the really cool part. Whatever you want! Niches rule in podcasting. How’s that for a small business idea. How do you make money from podcasting? Stay tuned. We’ll talk about monetization soon.

The Heroic Investing Team

Flickr / Sarahnaut

On the low side, Germany workers log the equivalent of about 35 working weeks each year, assuming a 40 hour workload. That leaves a full 17 weeks worth of vacation! The obvious question becomes, “How does anything ever get done around there?” The reality may surprise you. Germany is humming along at less than 7% unemployment, and boasts an economy that is the envy of the European Union right now. Heck, it just might be the envy of the world also.

Compare that to the relatively dedicated work ethic of Greece, where the average worker puts in almost as much time on the job as America, earning about two weeks annually for vacation. And how is the Greek economy doing right now? In a word – abysmal. Unemployment is over 20% and only bailout after bailout have kept the country from becoming officially bankrupt.

The German life of leisure seems to fly in the face of the conventional wisdom of some, who have always claimed that too much vacation makes for a lazy, anemic economy. With Germany and others clearly outperforming the American workforce, maybe it’s time to revisit that assumption. Tom Geoghegan, an American labor lawyer and author of the book, Were You Born on the Wrong Continent, claims that the difference between average amount of annual vacation time can be traced to labor unions.

It seems that rest of the world has long decried the European sloth work ethic. Consider this remark from Jin Liqun, the chairman of China’s sovereign wealth fund, who claimed Europe’s economic troubles are a result of “the sloth-inducing, indolent-inducing labor laws.” Ouch. A few months later, Republican presidential nominee candidate, Mitt Romney, warned that European-style work benefits would “poison the very spirit of America.” But the real point is this. Maybe Europeans are incredibly lazy and maybe they aren’t. The whole concept seems to be based on subjective opinion and would be impossible to prove by scientific research.

Though many Americans believe labor unions in this country are too strong, these organizations don’t hold a candle to their counterparts across the ocean. Without being too Yankee-centric, we can’t help but acknowledge the historical work ethic that is blatantly American. This is the country where, unlike the perception of others, you could always work your buns off and get ahead. At least you COULD work your buns off and get ahead until a recent succession of presidents seemingly intent on destroying the economy through the truly idiotic economic policies. We’re starting to get a little nervous, wondering if the event horizon has passed, that the United States has already been remade in the image of socialist Europe and we just haven’t noticed yet. Apparently, the concept of individual liberty is offensive and threatening to some.

It seems to us that the cultural reason Europeans have arrived in Uber Vacationland may be that the dream of getting ahead by hard work has withered on the vine. Maybe the idea that working hard actually leads to financial success is too hard to believe any more. Perhaps this is what Romney was referring to, but it’s pretty tough to claim that the famed American work ethic is getting us anywhere these days. When the current president trumpets the news of unemployment dropping to 8% as an achievement, whoa Nelly, we’re in trouble.

As presupposed a few paragraphs back, the real problem may be that European-style socialism has already infiltrated the American economy to a large extent. To those with resources, now might be a good time to get acclimate yourself to the notion that America’s days as an economic superpower are numbered, if not vanished already. Rather than counting how many vacation days you do or do not have remaining, better start researching topics like:

• dual citizenship
• foreign investments
• shifting Wall Street investments to real estate and foreign markets
• have an international “bug out” plan

Are we Chicken Little screaming that the sky is falling? Not at all. We’re merely looking at the world around us and wondering WWOFT (what would our framers’ think?). Chances are, modern day America might send them running for the nearest ships and setting sail back to Europe. It’s something to think about.

The Heroic Investing Show

Flickr / rumpleteaser

Before we go on, let’s review why an individual retirement plan such as a 401k is a good idea in the first place.

• Money can be either invested or withdrawn on a tax free basis
• Matching employer contributions can make the pot fill even faster

But back to the number $18,000. Yikes. This is roughly equivalent to one year of living frugally. VERY frugally. If this describes your retirement account, better plan on working a long time because eighteen grand won’t carry you far in this world of dizzying inflation. While it’s easy to make general admonitions, here are three specific actions you can take to jump start a 401k.

Don’t Let Ignorance Carry the Day
Let’s face it, most of claim to either be too busy or too uninformed to take an active role in the company pension plan, but it doesn’t have to be this way. Most pension plans have a “default” portfolio they dump your money into unless you direct otherwise. This default is typically based around safe, low-yielding investments or a bucket collection based on actuarial tables related to your age. Please tell us you believe you deserve better than that. This is your one and only life! Don’t relegate yourself to skipping needed medicines and dining on Alpo just because you didn’t take the time to educate yourself about how to maximize your retirement plan. The default arrangement is almost guaranteed to be best for the company, but is it best for you? If not, make it so.

Cut Costs
For obvious reasons, high fee mutual funds are often preferred by plan administrators. After all, it makes them more money. While altruism is a wonderful thing, when it comes to arranging the investments in your portfolio, it’s time to get a little selfish. We’ve mentioned this before. Most mutual funds have far too modest returns to justify anything more than minimal expenses. While an employer might require you to keep your money in mutual funds, it doesn’t have to be a high-cost fund. There are plenty of solid low-cost funds out there. Find them!

Alternative Investments
This is an important one. You don’t have to confine your IRA investments to the antiquated notion of stocks, bonds, and mutual funds. Most now allow investors to branch off into such alternative investments as oil and gas, precious metals, tax lien certificates, and our all time favorite – real estate!Should you decide to explore these non-traditional options, be prepared for your plan manager to express his shock and disbelief, perhaps claiming, “You can’t do that inside an IRA.” The truth is he’s both right and wrong. Maybe HE can’t do that inside the parameters of a company based plan but nothing’s stopping you from opening a self-directed plan. Self-directed means you get to choose which investments go inside it and if you want to invest in water in the desert, and the IRS allows it, by all means go ahead. Keep in mind that a self-directed IRA has no default fall back safety position. Any investment vehicle it contains must be put there by you. A little more brain work, perhaps, but achieving control over your portfolio should be the goal of every investor. Nobody, and we mean nobody, cares more about your future than you. Don’t forget that.

For a quick but in-depth education on how to get started in income property investing, learn more about the “Meet the Masters of Income Property Investing” weekend hosted by our affiliate JasonHartman.com. Coming up March 24-25, 2012, this educational event is a well-organized crash course in how to become a successful landlord by buying and renting out single family residential properties. Hosted by Mr. Hartman himself and a panel of experts drawn from across the industry, there is perhaps no other more dramatic choice you could make to improve your future financial circumstances.

Early Bird registration pricing is still in effect. Click here to learn more.

The Heroic Investing Team

Flickr / 401K

Sounds like a lot of pressure when you think of it like that, but don’t collapse in a weeping heap of despair just yet. We’re going to give you a few pointers that could go a long ways towards making the coming Golden Years truly golden. Here we go.

1. Defer Taxes on Savings: This might be the most important idea of all. Your money grows ever so much faster during working years when you’re not paying taxes on it. You can defer income tax on up to $17,000 annually by investing through a 401k, 403b, or the Federal government’s Thrift Savings Plan. Even a plain old IRA lets you invest up to $5,000 each year without paying taxes on it. Trust us, it’s MUCH better to pay taxes on the back end rather than the front.

2. Minimize Fees: The worst part about investing in traditional stocks, bonds, or mutual funds is the administrative fees. The saying “not able to see the forest for the trees” comes to mind. Imagine a seemingly lowly 1% fee per year. After a quarter of a century you’ve sacrificed a full 25% of your nest egg. Crazy! If you insist on Wall Street investing, seek out financial firms with the lowest costs, and beware of brokers who churn your account in order to generate transactions costs. Even better would be to take control of your future and create a portfolio without a middleman stealing your profits each and every year. Jason Hartman can show you how to become a world class income property specialist in less time than you might think.

3. Maximize Social Security: The following theory assumes Social Security will still be there during your lifetime. While many are tempted to chuck the working world the moment they qualify for Social Security, you should postpone taking payments as long as possible, until the age of 70 if you can. Your monthly check increases each year you don’t take it between the ages of 62 and 70.

There you have it. Three solid ways to insure you don’t outlive your retirement.

The Heroic Investing Team

Flickr / Sami Keinanen

Ignore these three items at your own peril, for they can seriously derail your standard of living in retirement, no matter how well your other investments are doing. Let’s take each item in turn.

Household Budget
If you don’t know how much you’re spending each month, how can you ever hope to come out ahead in the financial game? We hope you do realize that your checking account isn’t a bottomless well. Eventually it will run out of money. Perhaps you’ve already experienced this in the way of overdraft fees. The initial step to setting a household budget plan involves nothing more complicated that tracking your expenditures for a month. This allows you to establish a baseline for how much it costs to live. With so few people paying cash any more, electronic bill paying makes calculating household expenses a relatively painless chore.

Cut Costs
With an eye turned towards creating a better retirement plan, it’s then time to review each category in your personal budget. It’s not unusual to be able to make major cuts without affecting your quality of life. If it seems too awful to contemplate analyzing the whole thing at once, take a single category each month, tear it apart, see if you can make reductions, and put it back together. Even fixed costs like car insurance can change from year to year. Solicit quotes from other companies periodically to see if you can get a better deal. If so, jump on it!

Banish that Mortgage
This one is very simple. Consider doubling up on payments in order to get your house paid off by the time you retire. Heading into retirement without the onus of a monthly payment hanging around your neck can be quite liberating. It’s like getting a raise without doing anything. We’re not suggesting you limit your family’s food intake solely to Ramen Noodles in order to pay more on the house, but if it’s not too much of a financial squeeze, why not give it a shot?

The Heroic Investing Team

Flickr / 401k

Andrew “Andy” Ramirez is the founder and president of the 501c3 non-profit Law Enforcement Officers Advocates Council, which he founded in 2008 as a follow-up to his original non-profit law enforcement officers advocacy organization Friends of the Border Patrol. FOBP was initially created to support the Border Patrol and their agents, while improving the quality of life for border residents. As FOBP’s role expanded over the years to include all law enforcement officers, LEOAC is the next evolution in law enforcement advocacy. Andy continues to focus on improving national security at and between the ports of entry as well as along our coastlines, including Puerto Rico. His is a recognized expert on Customs and Border Protection. Andy is a trusted conduit of information between Congressional leaders and those on the front lines. Andy’s work has led to a number of Congressional bills that address border security policies to help America’s law enforcement officers. These bills enhance enforcement of laws and help remove obstructionist policies and red tape. Andy has uncovered numerous issues, becoming known as the “Defender of Border Patrol Agents”, which now includes all law enforcement officers. He has defended numerous officers that were unjustly prosecuted, terminated, and persecuted for doing their jobs, especially whistleblowers. Some of the issues that were discovered included suppression of evidence, abuse of power, suborning of perjury, ignoring Supreme Court rulings, illegal criminal alien violaters who broke laws and were protected by DOJ/DHS during prosecutions of agents/officers.

Andy joined the Liberty News Network as their National Correspondent in October 2010. He has given many appearances on TV and radio over the years. He also authored a comprehensive report titled “Unjustifiable and Impeachable, The FOBP Report on DHS, DOJ, and the Courts.” Andy was instrumental in the prison release of former Border Patrol Agents Ramos and Compean, and he has been extensively involved in the Jesus Enrique Diaz case. Andy has been featured frequently on CNN’s Lou Dobbs, FNC’s Fox and Friends, Neil Cavuto, and Hannity & Colmes. He has also been a guest on such programs as Michael Reagan, G. Gordon Liddy, Laura Ingraham, as well as many local TV networks and Talk Radio shows across the country. More about Andy Ramirez and the issues he is fighting to address and resolve on America’s border security and laws in favor of law enforcement officials and American citizens can be found on his website at http://www.advocatescouncil.us/.

That’s more than $300 difference! Do you see opportunity in these numbers? We’ll make it easy for you. Buy a house, then turn around and rent it out. Put that $300 in your pocket or take the family out for dinner at a nice restaurant. This is a perfect storm of real estate investment if we ever saw one, because the forces driving this particular chain of events within the housing market are going to be in play for a while. On one hand, you have a massive and continuing foreclosure crisis fallout shoving house prices ever downward. While it’s true that lending standards have been tightened, for those who qualify, it doesn’t get much better than this.

On the other hand, all these people forced out of their homes by the wave of foreclosures still have to live somewhere. This makes them renters, and they’re going to be forced to pay the going rate or move back in with their parents. Some will pick up the phone and call good old mom and dad, but a good chunk will bite the bullet and write out a check for the rent. Keep in mind that the foreclosure is not a mess in the rear view mirror. It’s still unraveling and will continue to have a heavy hand in real estate investing for years to come.

You can sit on the sidelines if you want. Continue to dabble in the stock market and get your head handed to you periodically, or you could finally make a decision to invest in history’s proven best asset – land. We’re here to tell you that NOW is likely the best time to invest in real estate that’s going to come along in your lifetime.

Are you simply going to watch it pass? We sincerely hope not.

The Heroic Investing Team

Flickr / josh.ev9