Should I Invest In Real Estate

Investing in real estate can be hard.  It can also be very intimidating.  But, is real estate a good investment for beginners

in 2020?  Real estate will always be a good investment. There are many benefits to investing in real estate.  Below are some of the benefits.

Recurring Income

The majority of people invest in real estate for the steady flow of cash they earn in the form of rental income. This passive income is a huge incentive to get you started and buy your first rental property. If you do it properly, your rents should cover your expenses and provide additional monthly income.  If you pick the correct property, you can have a steady flow of income.  And, you don't have to stop at one property.  You can parlay the income from each party and reinvest it in the purchase of a second or third property.

Tax Benefits

Taxes are another benefit of investing in real estate.  The tax exemptions an investor gets from owning rental property can be a major reason why many choose to invest in real estate. For example, rental income is not subject to self-employment tax. In addition, the government offers tax breaks for property depreciation, insurance, maintenance repairs, travel expenses, legal fees, and property taxes. Real estate investors are also entitled to lower tax rates for their long term investments.

Real Estate Appreciation

Real estate investing is not a short term plan or a get rich quick scheme.  But, this is really its strength.  The benefits  of investing in real estate is the appreciation of capital assets over time. In other words, your property’s value will be worth way more 30 years from now, hence why investors are in it for the long run.  It should be noted, that there have been times when real estate didn't increase but these were more driven by poor decisions being made in the market which let to property being over priced.

Inflation Hedge

Another big advantage of  investing in real estate is it is a hedge against inflation. With high inflation, your rental income and property value increase significantly. Real estate investors welcome inflation with open arms because as the cost of living goes up, so does their cash flow.

With all of these advantages how does a beginner invest in real estate?  There are many ways to start investing in real estate, even for someone without much money.

Rental Property

There are a few strategies you can use to get started in owning rental property.  

One method is a technique called house hacking.  It essentially means you’re occupying your investment property, either by renting out rooms or by renting out units in a multi-unit building. This method allows an investor buy a property with up to four units and still qualify for a residential loan.

Another method that is for someone that might be a little more seasoned but still wanting to get involved in rental property.  This requires someone who has already purchased a home and is looking to move or up size.  Instead of selling your current home and using that money for the new home, refinance the existing home, take out some equity and use that equity as down payment on the new home.  Then rent out the first home for some amount that will cover the mortgage, insurance and property taxes.  I did this about 3 years ago and it has worked out great.  Another suggestion is to use a property management company.  They will help you find a tenant and handle all the maintenance items for a small fee.

Real Estate Investment Trusts (REITs)

REITs allow you to invest in real estate without having to purchase the physical real estate. Often compared to mutual funds, they’re companies that own commercial real estate such as office buildings, retail spaces, apartments and hotels. REITs tend to pay high dividends, which makes them a common investment in retirement. Investors who don’t need or want the regular income can automatically reinvest those dividends to grow their investment further.

Are REITs a good investment? Yes but they can be complex.  Some will trade on exchanges like stock and others are not publicly traded.  REITs that aren't traded publicly can provide more risk because you typically can't sell your holdings but they can offer higher returns.  New investors probably won't qualify to purchase the non-public trading REITs these types of REITs because they usually have minimum income or net worth requirements.  New investors are better to stick with the publicly traded REITs, which can be purchased through a variety of brokerage firms. 

Use an Online Real Estate Investment Platform

As mentioned in Putting Your Savings on Autopilot, there are platforms that allow investors to invest small amounts in stocks.  Acorns  is an example of on of those platforms.  There are similar platforms for real estate.

An example is Fundrise.  This is an excellent method that will allow you to begin investing in real estate for a very small investment.  Their starter portfolio requires a $500 initial investment and you can grow it by reinvesting your dividends (this is recommended) and as talked about in Putting Your Savings on Autopilot, you can also set a monthly amount to automatically invest as little as $100.

This platform has performed well for me over the last 2 years.  I have recorded a return greater than 8% and even during these tough times, I have had a 1.5% return so far in 2020.

Real estate is a great investment and is a really good way to diversify your portfolio.  Utilize these techniques and begin to watch your returns grow.

Living Frugal is Hard

A key to financial security is living frugal.  In the 1996 classic "The Millionaire Next Door" the authors found some interesting information regarding millionaires.

• 75% of millionaires never pay more than $199 for a pair of shoes, and 50% pay less than $140
• 50% of millionaires pay less than $235 for a watch, and only 25% ever pay over $1,125 for a wristwatch
• 70% of millionaires never paid more than $29,200 for a new vehicle, and only 5% ever paid more than $57,500 for a new vehicle
• 1% of millionaires have vehicles that are at least 2 years old, 12.4% three years old, 6.3% with vehicles at least 4 years old, 6.6% with vehicles at least 5 years old, and 12.3% with vehicles that are six years old or older

How do you live a frugal lifestyle?

A frugal person has skills that help him or her gain benefit of the money-saving opportunities in life. Below I have listed several traits found in frugal shoppers.  By incorporating these into your life, you too can become a frugal shopper.

1. A frugal person studies other people. There are probably people near you living a good life on half of what you make. Learn how others do things, so you'll know your options.

2. Frugality requires knowledge of values. It's hard to get a huge deal on a car if you don't recognize what a big deal is. Start enlightening yourself on prices, especially before you're ready to buy anything that costs a lot.

3. Frugal shoppers pay cash. Things are cheaper when paid for in cash instead of credit. Want that new patio set? The cost divided by the number of weeks you can wait to get it equals how much you need to set aside each week. You'll not only save on interest when you pay cash, but you'll often get a better price.

4. A frugal shopper looks for alternatives. Maybe you'd have just as much fun taking that discounted trip to the Bahamas as you would going to Jamaica. If you happen to enjoy pizza just as much - or more, skip the expensive restaurant and call Dominoes.

5. Frugal shoppers tell people what they need. Just mention it in conversation. Do you know how many people get free or cheap things, just because they talk? 

6. Do the math. You didn't really save $400 on that car if it costs you $500 more in gas each year. Also, be aware that some stores are cashing in on shopper's assumptions that larger is cheaper. Yes, the gallon of pickles might actually cost more than four-quart jars. Be ready to do the math if you want to be a frugal shopper.

Begin practicing some of these things and you could begin your journey to becoming a millionaire next door.

Put Your Savings On Autopilot

One of the hardest things for any person to do is to save money.

One of the biggest mistakes a person makes is not saving money.

A 2019 survey done by Bankrate showed that 21% of Americans didn't have any savings.  Another survey showed that less than half of American's had less than a $1000 saved.

Why is it so hard to save?  There are a lot of reasons that experts will state. Not having a budget, not tracking where their money goes, having too much debt, blah blah blah.

I think the simplest reason is because its not any fun.  It is a lot more fun to go to dinner, buy the new car, take the vacation, etc.

But, it is time for people to Do the Hard Things First.  After you tithe (we will have future blogs on this topic) you need to save some % of money.

Put savings on autopilot, take it out of your control

Max Out Your 401(k)

The 401(k) is a very powerful saving tool. 

First, it is automatic.  The money comes out of your check and you don't have the option to spend.  Second, the money is taken out pre-tax and the returns are not taxed.  Also, many employers will contribute an amount that matches some % of the employees' contributions.   These benefits are what make the 401(k) a powerful saving vehicle. 

Step one of putting your savings on autopilot is to max out your contributions to your 401(k).

Use Auto Savings Apps

I love technology and this has been one of my favorite ways to save.  Here is one tool that I have been one of my favorite.  I'll talk about others in future posts.

Acorns rounds up your purchases to the nearest dollar, then puts the “spare change” in an investment account. You almost don’t notice it happening. You can choose from different investment strategies from aggressive to conservative.

I’ve had my Acorns account for a couple of years.  I started with an initial investment of $50 and it has grown to almost $2000 in two years just by rounding up purchases from my checking account.  When you’re ready to withdraw your money, it’s in your account within a few days.

Acorns cost $1 a month if you have less than $5,000 invested or 0.25% a year for larger accounts. If you’re a student or under 24 years old, though, you can use it for free!

Use Direct Deposit

Another way to put savings on automatic pilot, like the 401(k), if you never have the money, you can't spend it.

Most companies will allow you to direct your paycheck deposit to multiple accounts.  This way you will never see the money so it's like you never had it.  This is a good strategy to start when you get a new job or get a raise.  This is a way to not adjust your standard of living when you get an increase in salary.

Save Your Change

This may sound simple but if you just throw your change each day in a jar, it will add up.  We always use the change in this jar as our spending money on our vacation each year.  It is always a family project to roll it each year and see how much we have accumulated. 

Saving is hard but if you make it automatic, you will be amazed how much you can accumulate.

3 Best Batteries for an off-grid energy system.

The 3 Best Batteries For An Off-Grid Energy System

In this time of uncertainty, people are looking at other ways to become less dependent on resources.  Whether it is water, toilet paper or energy.

The question that anyone looking at alternative energy inevitably asks at some point…

What are the best batteries for an off-grid energy system?

Because of the falling prices of renewable energy systems, more and more people are looking to use alternative energy sources as a way to:

• Save money
• Become more energy independent
• And break their dependence on the big energy companies

However, installing a renewable energy system, in most cases, requires you to make a considerable initial investment that you won’t get back for several years.

One of the biggest expenses associated with alternative energy systems is the batteries in the battery bank.

So choosing the correct batteries for your off-grid system is crucial (and keeping the batteries alive as long as possible is also critically important)!

You Don’t Have To Buy New Overpriced Batteries

Before we tell you what 3 batteries we recommend for your alternative energy system’s battery bank…

It’s important to first note that you don’t have to buy the 3 batteries we recommend brand new.

Instead, you can use the EZ Battery Reconditioning program to:

• Get old or used batteries for free (or dirt cheap)
  • Recondition them back to “like-new” condition
    • Then use those reconditioned (like-new) batteries in your alternative energy system’s battery bank INSTEAD of buying new overpriced batteries
    Doing this will save you a considerable amount of money when building a battery bank and it helps make alternative energy accessible to those with a tighter budget!
    But that still leaves the questions…

    What are the best batteries to use in your solar power, wind power, or other alternative energy system?

    In this blog post we’ll try to answer that question in a very simple and straightforward manner.
    Here’s what we’ll go over:
    1. Lead Acid-Batteries VS. Other Battery Technologies in a battery bank
    2. Deep Cycle vs. Shallow Cycle Batteries in a battery bank
    3. Flooded Lead-Acid Batteries (FLA) VS Sealed Lead-Acid Batteries (SLA) in a battery bank
    4. And finally, which 3 Batteries we recommend for your residential off-grid energy system (based on the criteria we go over in this article)

    Lead Acid-Batteries vs. Other Battery Technologies

    Many of the batteries that are used in renewable energy systems were originally designed for other purposes. The most prominent example of this is the lead-acid battery which has dominated the industry for a long time.
    Deep cycle lead-acid batteries have proven to be one of the best (and most affordable) battery types for alternative energy system battery banks for these reasons:
    • They’re able to withstand frequent discharging,
    • They’re cheaper than other kinds of batteries,
    • They have more rugged durability,
    • They deliver more consistent performance than other batteries.
    The fact that they are widely produced also means that they are relatively easy to replace if a battery in your battery bank needs replacing.
    It should be noted though, that as of late, lithium-ion batteries for residential alternative energy systems, like Tesla’s Powerwall, have been gaining ground – but the initial investment into lithium-ion batteries is still much more than the initial investment into lead-acid batteries.
    The Powerwall may eventually change this but at the moment deep cycle lead-acid batteries are the cheapest and most practical solution for a home battery bank.
    
    

    Deep Cycle vs. Shallow Cycle (Car) Batteries

    Back when the renewable energy industry was still picking up steam, people that wanted to go completely off the grid would often have to improvise and make do with car batteries. However, car batteries were never built for this purpose and shouldn’t be continuously drained and recharged (which is what they need to do in a solar panel or wind turbine system).
    Car batteries are supposed to be used only for starting and ignition. If you take a look inside one, you will see that they have a large number of thin plates.
    These plates have a big total surface area that can facilitate a large number of chemical reactions. When you start your car, these reactions produce a sudden burst of power that is needed for ignition.
    Deep cycle batteries, on the other hand, have thick lead plates that don’t give much room for chemical reactions. Though they produce less current, they are designed to do so for a much longer period of time.
    In essence, car batteries are “shallow cycle” batteries that will quickly burn out when used as storage for renewable power.

    Flooded Lead-Acid Batteries  (FLA)  VS  Sealed Lead-Acid Batteries (SLA)

    Before telling you what three batteries are best for alternative energy system’s battery banks, it should be made clear why flooded lead-acid batteries (FLA’s) are better for renewable energy than sealed lead-acid batteries (SLA’s).
    One of the reasons that some people favor SLA’s is because they require little maintenance. Unlike FLA’s that need to be checked regularly for water level, SLA’s that are used properly can be left alone.
    However, sealed lead-acid batteries have two big flaws: they are sensitive and wear out quickly. So if you’re planning on using your solar panel or wind power system every day, this will eventually pose a problem.
    So, here are the categories of flooded lead-acid batteries that are best for an off-the-grid power system:

    The 3 Best Batteries

    So now that we know we want a lead-acid battery, that’s flooded (FLA), and also has deep cycle properties …here are our 3 favorite batteries for an off-grid system’s battery bank:

    1) Golf Cart Batteries

    Golf cart batteries are the most widely manufactured batteries on this list.
    They also work great in an alternative energy system application. So it’s no surprise that they’re one of the most commonly used batteries in battery banks for renewable energy systems.
    Even though the five to six-year life span of golf cart batteries may seem relatively short, golf cart batteries more than makeup for their deficiency in this area by being extremely durable and cheap (you can also use these 7 tips to extend the life of golf cart batteries).
    In addition, golf cart batteries can also be found almost anywhere, making them a great choice for battery banks.
    If you really want to build a high quality but inexpensive battery bank one of the best options is to:
    1. Get old or “dead” batteries from golf courses or golf cart shops for free …or dirt cheap (just call them and ask if you can have their old batteries probably lying around and cluttering their shop)
    2. Then recondition those batteries to like-new condition with the EZ Battery Reconditioning program
    3. Use those reconditioned batteries in your battery bank

    2) Industrial or Forklift Batteries

    A battery bank that uses one or more industrial batteries follows the opposite philosophy of a golf cart battery bank. Instead of relying on multiple strings of smaller batteries, you use a few or even one battery to store all of your energy.
    Because these batteries aren’t usually manufactured to standard dimensions, you will have to have one made that is just right for your needs.
    Or you can try to find an old industrial or forklift battery that’s the correct size for your system and use that.
    Like golf cart batteries, there are sometimes ways to get free or cheap forklift batteries.
    One way is to call up or visit industrial companies and see if they have old or “dead” forklift batteries. Offer to dispose of it for them or pay them a little bit. If they agree, you can then recondition the battery and use it instead buying a new pricey industrial battery.
    But if you choose to get a new custom made battery instead, you should expect to pay quite a bit. But the good news is these types of batteries are typically built to last 15 to 20 years.
    Other things to consider are:
    • These bigger batteries will be heavier and more difficult to move around.
    • There may be advancements in battery technology that could make the battery obsolete in years to come.
    But if you don’t mind making a significant investment upfront (anywhere from $2,000 to $10,00) and are alright with spending time keeping your batteries in top condition, then industrial batteries might be right for you.

    3) L16 Batteries

    If you want batteries that have a little more capacity than golf cart batteries but don’t want to spend on industrial batteries, L16 batteries are good middle ground.
    These flooded lead-acid batteries were originally designed for supermarket floor scrubbers.
    The good thing with these batteries is that they last a bit longer than golf cart batteries – about six to eight years. However, they are often twice as heavy and the 6-volt models can be twice as expensive.

    Conclusion

    Different homes will have different power requirements and will need battery banks that are sized accordingly.
    If you build a battery bank using any of the three batteries mentioned above, you should be able to create a battery bank that is just right for your needs.
    There are some exciting new developments in the battery world for alternative energy. These new products should be entering the market over the next couple of years, like the lithium-ion Tesla Powerwall. But at this time, our three favorite batteries for residential off-grid, alternative energy systems are golf cart batteries, L16 batteries, and industrial batteries.
    And if you’re interested in saving money on your battery bank, you can use the EZ Battery Reconditioning program to learn how to:
    1. Get old or “dead” golf cart batteries, L16 batteries, or industrial batteries for free or dirt cheap
    2. Recondition them back to 100% of their working condition
    3. Use those “like-new” batteries instead of buying new overpriced batteries to save a lot of money!
    Good luck with your battery bank! And Happy Battery Reconditioning!

Hello World!

What is this blog about?  In 3 words, "I don't know".

Well, first a few things about me.

I've been married for almost 21 years.  I have two sons, Seth who is 17 and Chase who is 14 as of this writing.  I'm a Christian and I not only believe but I know that Christ died for me and is my Lord and Savior. 

We live in Texas, just outside of Dallas in a little town named Lavon.  I'm a graduate of Texas Christian University and I currently work in the Information Technology field. 

I'm a huge Dallas Cowboys, Texas Rangers, Dallas Mavericks and Dallas Stars fan.  Sports play a big part in our lives as both boys play baseball at a high level as well as basketball and run cross country.

So back to the original question, what is this blog about?

I like getting involved in many things.  I am a licensed firearm dealer (FFL) and part-owner of a water and fire restoration company in addition to my full-time job.  I also enjoy running, health and fitness, saving money, investing, side hustles, Christian Apologetics, and a variety of other topics.

I have an existing website for my gun business,  a blog, and a podcast.  I also have an old blog that I haven't updated in a while.  Please check these out.

I thought I would create this blog to give me an avenue to discuss and share other information that I am interested in.  This blog will be an informational site as well as one where I share some personal information.

What does the title of this blog mean?

My approach to each day and the advice I have shared with my kids is to "Do the hard things first".

I try and knock out anything that I either don't want to do because it is difficult or  unpleasant early in my day.  This frees my mind up so I am not subconsciously dreading some activity.   This helps me eliminate any procrastination and helps me be more productive.

Also, I have always tried things just to see if I can do them.  Examples are running a marathon, taking karate lessons, becoming an FFL, starting a restoration business, and starting a podcast to name a few.  A reason some people never become the person they want to be is because they never start.

So, just "Do The Hard Things".