Surgery — what a pain

I had no worries going into my left-eye cataract surgery today. My right eye surgery (last month) was practically pain free. What a difference. Today was like being in a torture chamber. The anesthesiologist gets a D- grade from me.

The nurses were nice and funny this time, last time they were like robots. But I’m hairy and it seems nurses just LOVE to put very sticky tape on my hairy arms and back. Both times I had this huge patch thing put on my back. The first team removed it right after the surgery while I was still under anesthesia (not out, but feeling very relaxed and happy). Not this team…..and my back is very hairy. I think they designed this patch to withstand hurricane force winds and water and not come off. Then again, some people actually pay to have their body “waxed”.

But it’ll be worth it by tomorrow when my eye stops throbbing and I can see again See better than I’ve seen since I started wearing glasses in first grade. In another month I’ll be able to go back to the regular eye dr and get glasses again. My distance vision is terrific, but not quite 20/20 (well, the right eye, we’ll see about the left).

It’s been a very frustrating year not being able to see well….and I’m thankful to live in a time when cataract surgery is a “no big deal” thing.

Nonny

 

I see you watching me

We take a break in our regularly scheduled program to say hi to my fans on the No More Debt forum <waves hi>.

Some of you (well, pretty much all of you) must be wondering “who is the No More Debt forum” — it’s an online forum dedicated to discussing the Dave Ramsey “No Debt” lifestyle. They have a lot of good ideas and are, in general, a very interesting and intelligent bunch of folks.

What they are not, though, is open minded. Matter of fact, the forum owners are so insecure that they shut out any opinions other than ones they agree with. But they are watching — hoping to see me fail because they know the one and only way to success. I figure that a lot of folks looking into the Loomis plan will have their own set of naysayers around them, so it’s worth talking about.

What to do with the naysayers? I say “wave hi” — go ahead — watch me. It doesn’t bother me if someone else has a different take on fincancial issues. I actually like to be challenged and to engage with those who see the world differently. It helps me. But ultimately, I’m going to make my own decisions — and some of them will be good, and some will turn out to be bad.

The Loomis plan is not a get rich quick scam. I don’t believe it’s a scam at all, but I may be fooled. But it’s not “get rich quick”. There’s nothing quick about it. There’s a lot of discipline involved and a lot of financial planning and budgeting and organizing your life. It’s not as harsh as the “beans and rice” lifestyle Ramsey advocates, but it’s no promise of getting rich quick — but over a lifetime.

Yes, there are real estate scams out there. There are ponzi schemes out there. Just like there are car scams and charity scams and stock scams. There needs to be a healthy amount of skepticism before joining any venture. But there’s also such a thing as living in too much fear. People pay off their houses because of fear — not realizing that they are putting themselves at more financial risk in doing so than in putting their money in safer liquid investments. You can make extra payments for years….and still lose your house because the next payment is due next month. If you lose your job before the house is paid off….it won’t matter that you had been paying it off early.

Oh — but that’s what the 6 months security account is for. Well, what if you are umemployed longer? What if your whole region or industry is going through trouble? Is not 7 months of saved money more secure than 6? Is not a year’s worth more secure than 7? Why yes, it is. Then just keep going….keep putting that money aside where you can make your mortgage payments — and pay your food, clothes and transportation as well. If Katrina hit your house….you could relocate elsewhere a lot easier if your money was safe.

Even if you don’t agree….isn’t there value in talking things out? Hearing more than one side of the story? For every financial topic there are people that think it’s a great idea, and people who think it’s a terrible idea. Owning your home is a must — owning your home is stupid. 401k’s are the best way to save for retirement — 401k’s are the best way the government has for it’s retirement. Buy gold — never buy gold. Buy whole life — no, buy term.

I’ve done my own reading on the subjects…and make my own choices. So watch me. I may fall and you can pat yourself on the back. Or I may succeed. Or maybe you’ll learn some things you’ll be able to use yourself and see somethings that you’d never want. That’s the power of dialog.

But thanks for tuning in. It was nice to see the spike in my stats,

Poor Dad

 

Our first property

We just closed on our first property — a new construction condo in Phoenix. It’s part of the Red Rox condos and you can check out their website.

Lots of papers to sign, I think I have a hand cramp

Not much will change for us at this point. We’re still getting more in “assuance plan” payments than our rents cover…but at least now _some_ of it will be from our own rental property income.

Poor Dad

Ps…..welcome No Debt Forum readers — you might be interested in this article.

 

The pipeline

Howdy folks. I’ve been struggling on what to write on this blog. A lot is about to happen, but nothing of major importance has happened yet. I don’t want to be the guy who “talks big” and then there’s nothing to show. I’m also wrestling with the desire to explain every little detail about how the Loomis plan works, particularly the real estate investment portion. And yet, I’m not a Loomis employee, I do not want to misrepresent the details — and frankly, I do not understand everything.

So as I write, I want to remind folks that this blog is about MY experience going through the Loomis Wealth Plan/Quadrant Living. To get all your detailed questions asked, you’ll have to talk to the Loomis folks.

It’s been 6 months now since my wife and I signed on as members. We haven’t bought any houses yet as we had a credit issue. We disclosed it upfront when we joined, but it turned out to be a bigger problem than anticipated. Friends of ours who joined at the same time we did now own three houses. In the 6 months of belonging — we have not paid for anything. The 2 hour initial seminar was free. The financial planning meetings where we went over our finances and developed a budget was free. The two day couples empowerment seminar last fall was free — and very worthwhile. And we just had the fall empowerment seminar, one day — also free. Not only that — but we have been receiving our monthly “assurance plan payments”. I’ve been feeling guilty about receiving money when we haven’t been able to buy houses. But that’s about to change. Our credit issue has been cleared up — and we have several houses (I won’t tease you with the number of houses, just wait) where we’ve signed the papers and should begin closing this month. Finally, we have been receiving our monthly interest payments from the NARAS 12% fund.

There’s no doubt that Loomis is experiencing a good bit of growth right now, and growing pains along with it. Communications have not been what I’d call “excellent” between the membership and the company — well, I’m speaking solely of myself. So when months are going buy and “nothing” seems to be happening — doubt starts to creep in. Is this real, should I be involved?

Then along comes the empowerment seminar and my mind is literally blown away! Ok…so it was FIGURATIVELY blown away. Far from “nothing” has been going on. Loomis membership has ballooned to 300 families and with that we have become a significant buying block. Lee Loomis happens upon a gentleman who owns/manages (remember, don’t depend on me for correct details) several large home builders with LOTS of inventory and a big desire to get the houses off their books. So, instead of looking for rehabs/foreclosures — we are buying new properties. They’ve also worked out a way of closing the deals much quicker — and have a new marketing strategies for the “renters” (sales on contract for deed).

The tough real estate/sub-prime meltdown is providing an incredible buying opportunity for those who are prepared to get in right now. And this is part of the “hard thing”. To buy low and sell high makes sense. Until you live the experience. Things are only priced “low” when “everyone” else is saying “don’t buy them”. And when everyone thinks something is a good idea — prices are high and you hope they go higher. So, in order to profit from the idea everyone agrees on (buy low, sell high) you have to buy when everyone says you shouldn’t.

That’s the update. It’s been said that luck is merely when preparation meets opportunity. The last few months have been spent getting things prepared. Look forward to reporting houses being bought and “rents” being paid.

Poor Dad

 

Anybody home?

Hello…anybody home? I know, been awhile since I updated the blog. Frankly nothing had been happening and I’ve been enjoying my summer vacations. You can check out some of my Smoky Mountain photos. And I have some very exciting news….but you’ll have to wait and let me catch you up a bit.

The lack of action centered around awaiting the refinancing of my home. In order to participate in the real estate investment program one needs three things: good credit rating, low debt to income ratio and 6 months of your salary in liquidity. For our family, that meant refinancing the home to put that equity to work.

While waiting for the Loomis folks to come through on refinancing the house, I did do a couple things worth talking about. The first was to read Douglas Andrew’s Missed Fortune, 101 Secrets to Becoming a Millionaire. This is a shorter treatment of a much longer book he wrote. The book puts forth two propositions: it’s good to put the equity in your home to work and indexed equity life insurance is a great (and conservative) way to save for retirement. After reading the book I felt like I understood what Lee Loomis has been talking about much more.

The second thing I did was to try and come up with a new mortgage on my own. I wanted to have a sanity check against whatever deal the Loomis folks were going to come up with. I went to one of those online sites where you type in your request and then bankers fall all over themselves trying to get your business. Or so the commercials would lead you to believe.

I love doing business on the web – I’m a web kinda guy – but I was extremely disappointed in the banks and brokerage firms that replied to my request. I’m talking fee’s in the $5,000 and above, interests rates in the 9% to 10% (and more) range. And not a single one came to me with the product I specifically requested – a neg am mortgage.

The folks charging the biggest fees followed up their response emails with phone calls. Oh we talked the talk together. I explained what my goals were and they were all eager to serve. But lets get real….I’m not going to pay anyone $5,000+ to move my mortgage UP to 10% just because you are offering me a 40yr mortgage to get the monthly cost down.

I have a very nice first mortgage rate in the 6.5% range. Not a single one of them suggested leaving that in place and just refinancing the second to get the cash out. But I thought of it and ran the idea past my Loomis financial guy. He thought it was a great idea as well having just done that himself. He put me in touch with a great broker who I’m glad to say his name: Grady Lake (847-816-9600 x162). He found me a deal with no fees and 8.5% to refi my second and cash out the rest.

So with the money I pulled out, I moved debt out of my higher interest credit cards (I never call that ‘paying them off’ as I still owe the money, just at a cheaper rate) and I have my 6 months worth of liquidity. I chose to put that in the Loomis NARAS fund which earns 12%. More on that in another post.

Now that I had this important piece of the puzzle completed it took Loomis all of a day to present me with my first property – more on that later.

Lee

 

Wealth Is Not Optional

Ok, I admit, I was striving for an eye-catching title. We all know that most folks aren’t wealthy and therefore wealth is entirely optional. Taken from another perspective, there are plenty of people that would love to be wealthy but do not “have the option” of becoming wealthy. So what could I possibly mean by stating that “Wealth is not optional!”?

The topic springs to my mind from two conversations, one with my wife and one with an online friend. I was speaking to my wife about our financial plans. When I got to the part about needing $3 million dollars to retire I received this strange look. “We don’t need to be wealthy.” That’s what the look and subsequent conversation said. The second conversation sprang up on an online forum regarding the increased indebtedness of the elderly in our country. Credit card balances, mortgage balances. People who haven’t been frittering away their money but are still finding out that in retirement they have to choose between paying for their medication, paying for their food, or borrowing on credit cards.

The issue is having enough money come retirement to be able to pay the bills. Those of use with kids at home, struggling to pay the mortgage, clothe the kids, pay for 2 cars (and even more when the kids become drivers), and educate the children tend to think we aren’t going to need as much money when we retire. After all, our largest expenses will be behind us. The house will be paid for; the kids will be out living on their own. The grocery bill will be a lot cheaper. The amount spent on clothes will be cheaper. Everything will be cheaper. Well, except for the content of the second conversation I had — the cost of healthcare and the cost of prescriptions and doctors and all the rest that comes with not dying young.

How much will we need to live on when we retire? A whole lot more than one thinks by simply eliminating the cost of kids and the mortgage. A married couple that earns $80,000/yr will need to earn $240,000 20 years from now just to have the same amount of buying power that they currently have. How much will they have to save in order to earn $240,000 a year on their investments? Near $3 million. How much will YOU need? Take some time to play around with the following retirement calculator.

Neither my wife nor I care about being “wealthy” from a money point of view. We feel there are things in life that are far more valuable that money, like our faith and our children. We aren’t motivated by luxurious cars or mansions. However, neither of us wants to be poor either. When we think of the future we can’t use the value of today’s money. We will need to be millionaires just to have the middle class income we currently have. If we don’t, it will be us having to decide between medicine and food or looking to our own children for support. Thus, being wealthy isn’t an option, but a necessity.

 

To be liked is greater than being loved – Remembering Jim

I haven’t posted a new article in awhile. A couple Sunday’s ago the man who introduced me to the Loomis Wealth Solutions, Jim Priddy, passed away. Since then I’ve struggled over how to speak about Jim, or even if I should. Of all those who knew and loved Jim, I’m probably the least qualified to talk about what an amazing man he was. Then again, without his friendship and influence, this blog wouldn’t exist. So while I can’t do justice to who Jim was as a man, I can speak of who Jim was to me.

I liked Jim. Jim liked me. If I said nothing else, I would have covered the most important thing to me about knowing Jim. As a Christian I am very used to “loving” people and being “loved”. But though the bond of Christ enables so many to love each other, serve each other, care for each other — to me there’s something extra and above love — and that is “like”. I took an instant liking to Jim from the moment I met him — and from every indication, the feeling was mutual.

The first time I took notice of Jim was on Wednesday night at church. I’m a talker and a participator. Whenever the leader would ask a question I was always ready to share my opinion on the topic — any topic — all topics. Sitting usually a couple rows behind me was another such gentleman. Willing to talk — having an opinion on every thing…having the WRONG opinion on every topic. I kid you not. Who was this guy who was always so wrong? I liked him instantly. Give him enough time to explain his thinking and he always had a good reason for his comments and they would eventually make sense. Many a Wednesday night class came and went with he and I giving opposite points of view during the class and then having energetic discussions about them afterward.

Jim and I became friends in the aisle at church, Wednesday night after Wednesday night. Jim had a terrible sense of humor — the kind that makes people groan — the kind that could swing a bit to the blue side considering we were in church –the kind that I loved. I loved talking to Jim and listening to his stories and listening to his philosophies on life and swapping corny jokes with him.

Jim was a very open man and I learned how very deeply he cared for people. He cared for his family. I could see the joy he took in his grandson — a “boy’s boy”, a real charmer. He cared for his son and son-in-law using our friendship to spark my friendship with each of them. He saw his family through the lens of his faith and nothing was more important to him than their spiritual health.

Jim’s faith and values also ruled the way he saw business. In his business Jim dealt with all sorts of “high net worth” individuals, but he never valued people according to their wealth. I never saw him treat anyone according to their position in life. He’d never talk to me, for one thing, if “position in life” or net worth were important to him.

It was because of so many of these talks and how I knew that integrity was so important to him – that when he invited me to my first “Loomis Wealth Solutions” seminar that I went. I’m wary of anything with “wealth” in the title and went to the seminar as much as a courtesy to my friend Jim than anything else. The plan seemed too good to be true so I asked him afterward — what do you think? His reply was “if I didn’t believe in it, would I involve my three children?” And that was good enough for me to stick around and learn more. Because I knew Jim and I knew Jim’s values.

Jim had a heart to give. I know he raised money for many causes that he felt passionately about. I can still remember his excitement over seeing God do an amazing thing that ended with a sports field being sodded for underprivileged youth. I can remember because I heard him tell the story about 6 times (smile). As I write that I know he’s smiling and taking the ribbing good naturedly. I’m sure he’ll find a way to get me back, even now, or perhaps when we resume our friendship in heaven.

I hope for all who read this that God will bless you with someone to like and to be liked by, the way I was blessed to know Jim,

Poor Dad

 

Wealth? What’s the catch?

 

 

A reader asks “Does Loomis give you free counseling to get to the 680 credit score“

This is an excellent question. Before I answer it, I want to remind folks that this blog is about my own experience and journey. As I’ve become a member of Loomis Wealth Solutions it is natural that a lot of what I talk about in the area of finances will be about the Loomis system. Keep in mind, however, that I am not an employee of Loomis and nothing I say should be misconstrued as official. There is an excellent team of people at Loomis and you can contact them directly to get your answers straight from the horses mouth via www.loomiswealth.com. You can tell them that “Poor Dad” sent you

It was difficult for a cynic like me to get involved with anything with “Wealth” in the title. The only reason I attended the first 2 hour seminar was that a trusted friend, someone very good with money, invited me. I took my laptop and jotted down more than 30 questions during the 2 hour presentation. The pitch was enticing:

Loomis is a financial planning firm with a plan we are excited about because we can help upper middle class families develop wealth. Wealth not defined by merely a financial number, but wealth that enables our clients to meet the needs of their kids, support their church and community and pass down their values to their children. The difference with us is that we not only help our clients come up with a financial plan, but have a way to help them make the money they need to realize those plans. (not a direct quote, but the jist of what they said)

Oooohkay. Is that purple Kool-Aid they’re serving at the back table?

I can say after spending a couple months with the Loomis people, that they really are financial advisors at heart. They sat down with my wife and I and talked over our budget. Or should I say, our “spending habits” — as we didn’t have a “budget”. After taking a couple passes with the Loomis people, we now do have a budget. And it’s a budget that we’re working hard to live by. It’s amazing how just having a budget is changing my spending habits. I’ve started eating my breakfasts at home and taking my lunches to work. I’ve eliminated $300 a year in magazine and website subscriptions. I did this not because the Loomis people told me I had to, but because they helped make my spending clear to me and helped me set financial objectives that I want more then magazines I don’t read or more than the conveniece of buying cafeteria food! They never once challenged us on anything we said we spend money on. That’s the power of having a budget and a clear financial vision.

The Loomis financial advisor went over our financial obligations like the first and second mortgage and credit cards we have. After restructring things we’ll have $1,200 a month less to pay on the SAME debts….and interest income of $6,000 for a whopping $20,000 change in our family cash flow. This isn’t including any money from the real estate investment plan. This is money that (along with our new budget) — takes us from “spending more than I make” to “living within my income” and to becoming someone that is on the right side of “compound interest”.

How much did we pay for this? Nothing. It’s part of being a member of the Loomis Wealth Solutions. This is the type of thing that makes it hard to believe in when you are listening to the first 2 hour presentation. What’s the catch? Where is Loomis making money? The type of things that inspired over 30 questions the first night. I can’t answer all those questions right now on this blog, but I did ask them myself. A big part of the answer comes in the “we need you” part of the real estate investment business. They are working with me to help me become the ideal candidate for lenders to give investment property loans to. That’s the financial engine that will help us earn what we need to earn to retire on.

I imagine that there are people that are going to fall outside of the scope of the Loomis plan. Their income won’t be high enough or their credit won’t be good enough and so on. I can say that they worked hard with my wife and I for a couple months to get us into the shape we needed to be in to participate. And did so without charging us — or obligating us. They answered all the tough questions I asked of them and did so with a great attitude. The time they spent with us on our budget and revealing to us the realities of our current financial situation — has already had a significant positive impact on our finances.

Poor Dad

 

Grades aren’t important – as long as you are getting straight A’s

I have been giving my children mixed messages when it comes to grades for years. On the one hand I’ve been teaching them that “what’s important is that you learn and learn how to learn”. I don’t want them thinking that grades are the objective of school. On the other hand I question them on every class they get a B in as to why they aren’t getting an A.

My wife and I were both straight A students and my youngest two daughters are straight A students. I’ve been puzzled on just how to handle my oldest daughter who gets A’s and B’s.

 

Before I progress in this story, I want to take a step back. Part of the Loomis Wealth System is membership in Quadrant Living. A friend I know has been telling me about this program for years, long before I had heard of Loomis. I heard that Quadrant Living was a program that helped high net worth individuals discover what true wealth is. I was very skeptical. Being a Christians for over 20 years my wife and I are pretty clear that “money” isn’t where wealth is.

 

Fast forward and my wife and I are driving to our first two day Quadrant Living “Couples Experience” as members of the Loomis Wealth System. We’ve been very eager to get the help with our finances but have next to no interest in “Quadrant Living”. As I drive I tell my wife “let’s get out all of our cynicism so that when we arrive, we can be in a state of mind to learn what we can”. So we both talk about how we already have the values part of our life together and how we don’t need this seminar – but how we are willing to go in with an open mind.

 

OMG – (that’s “Oh My God” to you non-texters) – what an incredible weekend! I’m so glad we got our cynicism out of the way and were open to learning. The weekend wasn’t at all about what one’s values should be – but rather some skills and systems on how to identify and maximize the values that one already has. There were many things I learned but one stood out immediately to me. As soon as I heard it I knew that if I learned nothing else, this one thing would have made the time worthwhile. And I had the opportunity to put the lesson into practice the very next day as my oldest came to me with her mid-term progress report.

 

“Here dad, my progress report.” 3 A’s and 2 B’s. What parent wouldn’t be thrilled? I am thrilled and yet, last report card she earned 4 A’s and 1 B, very nearly getting that “straight A’s” mark I’ve been setting for her – and not setting for her– with my mixed message parenting methodology. I would have said something along the lines of “this is great, honey, I’m proud of you. But what happened to that A you had last quarter? And what do we need to do to turn the other B into an A”.

 

I know in my head that I’m sending mixed messages. I know that I am proud of her accomplishment. I know that I also want to encourage her to be the best she can be. And, unfortunately, I’m also aware that I’m communicating that she’s failed. No matter how much I say otherwise, I’ve set the standard at “straight A’s”.

 

This time, though, I have a new tool, a new system for dealing with my desire to praise my daughter and push her on to greater heights. So I say “well honey, these are great grades, I’m so proud of you. Can you tell me the good things you’ve been doing that helped you get to where you are.” What a difference! We had the best “grades talk” we’ve ever had. It went longer and involved far more participation from my daughter than ever. She brought up the “I really think I can bring this up to an A” all by herself. But this time my “what’s the most important thing – that you learn” was so much more genuine. We were able to celebrate her achievement and encourage building on the good things she’s doing. It’s good to have learned a skill to clear up the mixed messages I had been sending.

Poor Dad

 

What’s the point of being rich if we’re poor?

“What’s the point of being rich if we’re poor?” That statement from my wife isn’t as nonsensical as it might sound. We were struggling through that nasty “B word” – budget.When you sit through a Loomis presentation and hear about all the thousands of income you’ll be receiving, you just naturally get the warm feeling that “life will be good with this extra money”.

However, we are not yet living in that future time where we have a net worth of $10 million (the objective Loomis has for all it’s members). Instead we are looking at the budget we’ve made with the help of our Loomis financial advisor. Mind you, this is no “beans and rice” budget. This is a budget that reflects how we live. It has money for traveling soccer and music lessons and summer camps. There’s money for vacation and car maintenance..food and gas. It’s not a budget where our advisor made any cuts to our way of living.

The timing of this conversation is a week or two before the first post on this blog. We had gotten over our “what’s the catch” and are looking towards actually following the plan. And yet, as generous as the budget is, it’s terrifying to think of putting all the rest of our money away and saying “off limits, live within the budget”. That’s not exactly what happens, but that’s what we fear is going to happen.

After going through the process we begin to try to live within the budget. Time and again there’s something we didn’t budget for. This time it’s school fee’s. We didn’t budget for school fees. “We gotta go back to the Loomis people and redo the budget, there’s not enough money in the budget”.

The budget isn’t the problem. When we talk with our advisor and see the detailed financial statements he’s prepared both “as you live now” and “after we restructure things”. I spot the problem immediately. The number “as you live now” is in red. Our budget exceeds my income. We can add more to the budget all we want, but that doesn’t invent income.

We’re poor — not because the Loomis plan is taking away money from us (it’s adding) — but because we spend more than we make. We kinda knew this in the back of our minds, but it’s shocking to see it in black and white — or red and white in this instance.

Via the Loomis Income Advantage plan, we’ll be seeing $1500 a month income that goes into long term/retirement savings. That’s going to help us educate and marry our daughters and retire. And that income is going to grow as we enter years 3, 4 and 5. And yet — we’re still poor! Poor folks who live in a good house in a nice suburb with vacations and soccer and music lessons and on and on.

The Loomis advisor is also helping us restructure our existing finances in a process called “equity harvesting” and “panning for cash”. Unbelievably, just restructuring things is going to make up that shortfall between our budget and our income…and allow us to participate in the real estate investment plan that will be funding our retirement!

You can’t spend more than you make forever. We can feel poor as the discipline of a budget takes hold — or we can BE poor when the credit train finally leaves the station and we declare bankruptcy. To deal with our budget, we can make more and spend less. Living beyond our means has come to an end. There’s victory in “living poor”.

Poor Dad