Q for Fastlane Members: What if You Lost Everything?

I'm doing a little different spin off of the $3K to $1 mill exercise Russ posted.

What if you lost everything you had right now - all your money, your businesses, your real estate, everything..... You were left with $5,000 and the knowledge you have.

How long would it take you to get back to where you are right now? And how would you do it?

I'll post my answer to this tomorrow. BTW, I was asked these exact same questions 4 years ago on stage. I was so shocked by my spur of the moment answer, that I did it. My husband and I made $1.7 million from putting that "ah-ha" in place.

So, how would you do it? How long would it take?

It would take a bit more work than I am used to but...

If I lost everything, it would likely be due to some major change that took the apartment market into a major spiral. With the knowledge that I now possess and with the ability to take advantage of the market that would emerge as a result, I am thinking 2-3 years.

Thanks Steve.

The thing that's so interesting is I bet that it took you more than 2 years to get where you are, but if you lost it, it would only take 2-3 years to get it back.

$5K to $5 mill+ in less than 3 years. Now, that's impressive.

Would you still go the same route - apartment buildings?

Multi's are what I know. I could probably deal with retail of office buildings if they were a better option at the time but the money would likely be slower.

I believe that I will make more than 9M in the next 3 years without the effort that would be needed to start over. The difference would be the lack of a base to build off of.

The knowledge is the key. That is why it is so important for people to jump in and start learning now.

I realize that Diane`s question was put to us personally, but this very question was put to me regarding my business...

it was phrased like this- If I lost, sold or left the business and had very little to my name, what would it take to get it to where I wanted my picture-perfect business to be.

WHAT A POWERFUL QUESTION[

starting over knowing what we know now has got to be the ultimate tool for success. To answer Dianes question, I think it would take me only 3 years to accomplish what I have accomplished in twelve. but thinking about this in detail has been incredibly productive for my perspective and my ability to handle tasks.

Anyone know the story of the `refugees` who survived concentration camps and moved into the 1940s America? ... fascinating stuff.... sharp business people left with barely two nickels to rub together came to our shores only to succeed beyond most peoples dreams.

I know one first hand and once told me a story that often comes to mind whenever letters come to me from lawyers threatening to sue... and the shortened version of the quote goes like this: `nothing puts fear into life like a soldier putting a gun to the head for absolutely no reason. everything else is in life suddenly becomes meaningless forever`

anyway, starting over has been a successful tactic for many people in business. John Hewitt from Liberty Tax Service and Jackson Hewitt is a perfect example as well as some people in my industry.

Wow! I really like your question here, especially for us business owners. It is a different question than mine. On your business-centered question, it addresses the issue that many of us (ME TOO) have in making a decision sometime ago to start a business a certain way and then in reacting to changes and opportunties, kind of put your head down and just keep going. A few years later, you raise your head and say, "How did I get here? This isn't the business I planned to have at all!" Sometimes it's a good thing, sometimes it's a bad thing...

Randallg99, how would you get your wealth back? I'm guessing you're in business now. Would you do the same thing again?

Diane,

Currently, I have my hands in real estate, a potential venture into private equity, foreign land development, retail brick and mortar business and semi active stock trading. In my mind, I created a hedge against the fear of being too concentrated in any one financial area... My focus is seriously lacking and I am aware of the fact that focusing on one single area would prove much more beneficial.

So, to directly answer your question- I would reopen my business which I originally started almost 15 years ago with very little resources. Todays economic climate is different because the use of technology while important is very costly. But the business can manage revenue and reinvested profits/cash flow into necessities. It took me 12 years to become extremely successful the first time around. If had to be done again with $5000, it would take less than 5 years. learning from mistakes made the first time around would prove extremely valuable.

As destitiue as the scenario could potentially be for my family, it would be a perfect opportunity having the knowledge as SteveO described.

Regards,

Randall

ps Greenspan on 60 minutes is fascinating...

Now that is impressive, i've been reading and researching my area and it would be very hard to make those numbers in 3 years.

Satpoint, I think the right way to say it is "it would be very hard to make those numbers for now". And if that is true, what about other areas?

What's your area?

My (and my wife's) current financial position started when we bought our first home at the ripe age of 22/23 respectively. We had a plan of being in rentals from day 1, just didn't understand how, but the original plan was 1 per year.
It took roughly 12-13 years to get where we've been for a while now. Having to do it again under the 5K question, after getting past the devastation of being reduced to that amount, if took me even a third of the time to get back to here would concern me greatly. If I only knew then what I do now, I would be SOOOO much farther along. Unfortunately, I didn't and I am just great full that we were fortunate enough to have what we have and woke up soon enough to take advantage of the situations that presented themselves.

BTW, the first purchase started with 6K so, pretty similar scenario.

Diane,

I am not able to message you, (sorry for getting off topic). Is your inbox full?

Tom

Diane- great question.

And randallg99-- WOW! What a great twist on that!

I'll answer Diane's first. And I have to admit, I'm going to have to think long and hard about randallg99's question. Very thought-provoking. It just may become part of our PLAN/biz plan review sessions!

When Sharon and I first started going out, we discussed our financial futures a lot. We both owned sucessful businesses, and were quite happy being "S's" (Self employed entrepeneurs).

I had a retirement strategy mostly based on Suze Orman's 7 Steps and a book I'd read by Vicki Robin and Joe Dominguez called "Your Money or Your Life". Boiled down, my strategy was to sell a house I'd been rehabbing, pay the tax on the amount I made over $250K, and invest it into something conservative (like 30 yr Treasuries). My other house was almost paid off, so once I did that, my expenses would be minimal. If I cleared $300K after selling my one rehab, paying the taxes, and paying off my other house, I would have $300,000 x 5% (30 yr treas) = $15,000 a year to live on.

I figured I'd continue my writing and teaching gigs, which were taking me about 3 days/month on avg (36 days/year total work), and bringing in around $70K a year.

Pretty close to retirement-- 90% of my time would be free. That was enough for me, anyways.

Then we started playing Cashflow 101, and our universe changed.

By the time I played with the folks in San Francisco and learned the power of partnering and leveraging, everything I'd read by Robert Kiyosaki made sense. I'd really enjoyed his books before this-- but playing cashflow showed my how to put what I'd learned into action.

Our new goal-- together, leverage and make $2,000,000 after taxes. Still invest in 30 yr Treasuries, but now we'd have $100K/yr to live on (2,000,000 x 5% = 100,000/yr).

We started on this road at the end of 2003 (remember my noob questions about the B&B back then, Diane?).

And by April 2005 (18 months later), we had gotten to the point where, if we sold our B&B, we would have the $2M.

But we were having so much fun that we decided to take things to the next level!

That's what we're working on now. Cashing out w/5-6M, $250-300K/yr.

We should be there in the next few years (depends how long it takes to sell the B&Bs once we get to our gross revenue goals).

OK, so I am finally going to answer the original question! Here goes:

If we had to start over, we'd probably go back to work as S's, generate $200-300K, and just rinse and repeat what we've done w/the B&B.

We'd probably get to 5M in about the same time as now-- since it was the cashflow game (played before we started) that really accelerated our approach.

Still, we started down this road later than some on these forums. I was in my early 40s when I started playing cashflow, and Sharon had just turned 29 for the 10th time.

The most important take-away from this whole process is:

Losing the MONEY is not important.

WEALTH BUILDING comes from KNOWLEDGE, not from MONEY.

That's something I never, ever understood as an "E" (employee).

As an E, I thought that if I lost everything ($$$), I would be devastated. And that it would take decades to rebuild my $$$, and my life.

Nope.

As long as we have the contacts, the know-how, and the lack of fear to jump back in, the entire process takes a few years.

Amazing.

-Russ H.

Reading and research will help but nothing subsitutes for experience.

If you look at some of my other posts, I am not a fan of investing in your own location unless it fits certain criteria.

I tried to give you rep ++ on this but it seems I need to spread some around first.

We started our first company with $2000.00(a long time ago) so I think we would be OK starting with 5K now.
Things I would do the same:
live simply
leverage time since I have no money
use knowledge to avoid the money pit wasters
use contacts ***** big deal here, didn't have many back then
Things I would do differently:
never have any realitives work for me
start out with a more structured agreement between my DH & myself (we both want to be the boss)

I think it might take me about 4 years to get up again. I am just not risk taker I was when I was younger. If I was I would say faster.

A couple years. Do the same thing I do now: Build a web property that cash-flows heavily and then sell it.

The reason why I love the internet is that web properties are like real estate; its an asset that cash-flows. The major difference? You can build a web property from nothing with little cost, cash-flow from it, then sell it. You can't build a single-family house by yourself and to buy an existing one, involves cash (yours, or OPM's)

If you build a web property and cash flow from it, and later sell it, you experience an infinite return, or a return based on your cost of development - which BTW, is getting cheaper.

Real Estate barriers to entry:
1) Cash / Loan Qualifications / Down-Payment
2) Time
3) Land
4) Renters
5) Government regs (state/HOA's)

Internet barriers to entry:
1) Development time
2) Development cost (if you can't do it yourself)

I can build an internet property that cash flows in a few months. I can't build house from scratch in a few months and if I tried, it would cost tens of $1,000's (Land, contracting, construction).

The lure of infinite returns is what will keep me on the internet for a long, long time.

Hi Diane,

Since I hope to learn from it, I am anxiously waiting for the answer that you promised to post "tomorrow" (that would have been the 16th).

Henk

Yep, Henk, you're right it's not posted yet.

The forum takes 3rd or maybe 4th place behind my family, charity work and businesses. There were some huge opportunities this week for my son's charity and I spent a day in LA cutting a video that was a sudden opportunity.

Lets see, you're rude to a respected member and you violated one of the forum rules via sending PM spam. Are you interested in staying here or getting tossed?

How great to be able to take advantage of a spur of the moment opportunity. How great for your son's charity