Risk - possibility that some or all the capital invested will be lost. For example, the value of a company stock can lose 50 percent or even 100 percent going to zero capital recovery on bad news (e.g., a pharmaceutical company FDA approved drug now found to cause Cancer.) Real es- tate can burn to the ground while a mortgage loan made or purchased at 80 percent of property value can default at a downturn in the market, and the foreclosure sale only recovers 40-50 percent of the capital invested. Education - the amount and type of education and/or expe- rience required to master the investment so that profit is much more likely than loss. Single-family houses do not require much. Foreign exchange trading, and stock op- tions trading are highly technical and volatile investments that require ample education to be successful.
you must show up to purchase and manage the invest- ment type. For example, stocks can be traded from any- where in the world with a computer and a phone. Rehab property work must be done onsite. Real estate assets generally benefit from some on-site inspection and analy - sis. Managing real estate from afar can be done with the right systems and processes with property managers. Time Freedom- the amount of time commitment needed to succeed in this investment type during the start-up, build, and maintaining phases. For example, foreign exchange trading requires being at your computer when markets are open – in all phases. Most forms of stock and options trading require hours at computer while markets are open and daily vigilance over sudden swings in daily val- ues. Real estate or notes can be purchased and managed periodically on hours that suit the investor and at a much slower pace, not requiring daily attention.
Location Freedom - where you must physically be and where
My Ideal Asset
Discounted Mortgage Notes
Stocks/ ETFs
Municipal Bonds Mutual Funds
Attribute
Apartments
SFR Rentals
med-high (low with more effort)
high (low with more effort)
Starting Capital
low
low
low
low
low
Availability
high
moderate
low
moderate
high
high
high
24% or higher 7%-15% Perf A/B 5%-10%
ROI-Return (est.)
5-10%
-20% to 20%
3%-5%
-10 to -10%
15-33% C or sub perform;18-42% non-perform moderate-high Perf 30-60 d; Non-perform 180-750d
Rougher condition; more work required
12-24% Fixers 10-18% Fixers
High <10d Loss of Capital During Inflation
High <10d can stop trading
Liquidity
high
low-moderate 180-365 d
low-moderate 90-365 d
High <10d can stop trading
Volatility
moderate-cyclical
moderate- cyclical
Moderate-cyclical
High
low low-cyclical
high
Risk
low
low
low
low
high
moderate
high
Education
low
moderate
moderate-high low-moderate moderate-high moderate-high moderate-high
Location Freedom
high
high
low
moderate
high
high
high
Time Freedom
high
high
high
high
moderate
moderate-high
moderate
moderate-high (using servicers)
moderate-high (with property mgrs)
Passive Monthly Income
high
moderate-high
low
moderate
low-moderate
Reinvest Rqmt
low
moderate
low
low
moderate
low/moderate
moderate
Gene Powers is President and Founder of Nationwide Secured Capital, a brokerage and investment company that purchases private loans secured by real estate for its own portfolios and numerous private investors and funds. Nationwide provides cash out and recapitalization options to those receiving payments on first position private loans. This includes real estate investors/property owners who provided owner financing on properties sold. Call (800) 853-0573 or go to www.NationwideSecuredCapital.com for offers. This article series outlines the 7 foundational STEPS that Gene and his wife learned in their journey. They now travel extensively while co-authoring a book further detailing these key steps in their journey to Financial Freedom. Email FFReadMore@CPFFCorp.com for more on this topic.
NOW it is your turn... Make your chart with your preferences and passive income investments you have researched and studied. Choose your investment type and act to build the vehicle that will carry you to financial freedom! •
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