Fred Rewey’s Blog

Over the years, I have made numerous references to what I call my “Playground Rules”. Here are some of them…

#1. You must first understand the rules before you can break them.

#2. People are the asset, not money.

#3. Things don’t always work out the way we want…tough bounce - move on.

#4. Any goal not written down is merely a dream.

#5. Never think $500 is not a lot of money.

#6. Never believe your own press.

#7. You go where you look.

#8. Get out of your comfort zone…and stay there.

#9. Some lessons in life were meant for others to learn something, not us.

#10. Your success can only be measured by you.

I had an interesting conversation with someone today in that at one point they commented that my success was probably due to my ignoring the rules and going my own direction. I thought about that for a minute. If I was to review both my successes (and failures for that matter), the successes were not from an ignoring of the rules, but understanding them completely.

Until you fully understand the rules involved, you can’t break them. I certainly think that “breaking the rules” or “going against the grain” can maximize a positive outcome, but you don’t break the rules just for the sake of breaking the rules. Take negotiations for example. The better you understand the person you are negotiating with, the more likely you are to succeed - you know where they are coming from and what their needs or desires are. You can better help them and yourself. Conversely, if you know nothing about the other person, you are really flying blind and only hoping for a positive outcome.

Break the rules…but learn them first…

“Because I have never done it, and it is there.” ~ That was my response as to why I was going to drive my motorcycle across the country beginning July 29th.

As most of you know, I love to ride motorcycles. Whether I am firing up my first Harley-Davidson (Fat Boy), the new Iron Horse 9’ Chopper, or the “Geezer Glide” (a 2003 HD Ultra Classic), it is just great to get out and ride.

In all of my riding, I never have really gone on a long trip. Sure, Tracy and I have ridden to a nearby state and put in 650+ miles for the day; but across county – that is something else entirely.

My actual trip starts in Orlando, FL at 6:00am on Saturday ~ I will work my way across the country (with three friends), stop by the Sturgis Rally in South Dakota, my home state of Wisconsin, and see numerous national parks and landmarks along the way.

Sure, it will be tough. Yes, I am probably crazy for doing it. But like I said from the onset, “because I have never done it, and it is there.”

Talk to you soon.

*****UPDATE 8/13/06*******

Ok, the journey is over and I wouldn’t trade it for the world. We had a great time and with over 9 hours a day on a bike, you have a lot of time to think (maybe too much time). I have new respect for those that do “Iron Butt” rides (over 1,000 miles day).

Other than driving through a record heat wave, the ride was always pleasant. I saw the Badlands, Deadwood, Spearfish Canyon, Mount Rushmore, Custer Park, Devils Tower as well as hundreds of Buffalo, Deer, Elk, and a whole lot of corn.

In the end, we traveled from Florida to Wyoming to Wisconsin and back to Florida. (13 days, 14 states).

It is a great country we live in and I highly recommend getting out there and seeing it!

Excitement and motivation are naturally at high levels when first starting on a new path, goal, or project. This is especially true when starting your own cash flow business on the path to financial freedom. Unfortunately, many experience roadblocks that may cause delays. I have found there are three important lessons that help pave your path to success.

1. Avoid Life’s Inertia

You may have already experienced this after starting your business. You set goals with great intentions but found yourself sidetracked by normal day-to-day life situations (work, taking care of the kids, taking care of the spouse, grocery shopping, going out to dinner, etc, etc). The list certainly goes on and on. Expect it. Know that it will happen and plan around it. Making a change for the positive is always tough. Making time can sometimes be even tougher but, as Nike® says, “Just do it.” Find some dedicated time to work your business (at least 8-10 hours per week) and don’t let anything, short of a real emergency, get in your way.

2. Plan on Work

One of the first things to realize is that working the Cash Flow business is no different than working any business - it requires work. The great part is that opposed to working for someone else, you reap all the benefits of your efforts. Simply putting up a sign in your home office that says “I buy cash flows” will not get the phone to ring. In the end, that is what it is all about. It doesn’t matter how good you are on the phone, how well you operate a calculator, how many Funders you know, or if you are the best negotiator on the planet. If the phone doesn’t ring you have nothing. A valued mentor taught me this important lesson over 15 years ago; it is just as true today as it was then - and probably always will be.

3. Feeling You Are Not Ready

Let me say this, “You are ready”! You have all you need to succeed in the cash flow industry, now you just have to get better. Learn all you can. Read all you can. TRY to do as many deals as you can. We say “try” because in the beginning we don’t care whether the deal closes or not (although we always hope it closes for you). What you want is “experience.” If you are concerned that you may say the wrong thing to a seller and lose the deal, let me just say this, “you will.” There, now knowing that you WILL make a mistake should put your mind at rest. We all make mistakes, it is what we do with them that matters. Bottom line: You have all that you need to get started - so get out there and do it.

Turned 40 today.

I have to admit, it was not as bad as I thought it would be - mostly for the fact that I finally believe what (older) people tell you - you are as old as you feel. Of course if you ask my wife or teenager, they may say that would make me around 6.

I am making the most of my 40th year as possible - learning a new language, river rafting, traveling to the Arizona desert to go through a Covert Ops training, and getting on my bike July 29th for a 7,000 mile motorcycle trip across the country. Although I try to always enjoy life along the way (I fully believe in the “life’s too short” quote) a milestone certainly helps get you in gear.

For those of you under 40 (or 30 for that matter), the best advice I can give you is don’t wait. As Dave Mathews says, “the future is no place to place your better days.”

I can’t wait until 50! - well, maybe a can wait a little while…

Well it appears that all eyes are on the Nation’s Real Estate Pricing and Interest Rate’s seemingly continued increases (see the March 22, 2005 post!). What does this mean to you?

For starters, if you are a homeowner that is already enjoying fixed rate financing you will begin to see the benefits of locking in those lower interest rates. This will be particularly true for those that own property to use as rentals. If you have been tied to variable rate financing you are going to start to see the downside. Certainly you have been enjoying lower payments but, like most things, now it is time to pay – literally.

Over the last several months we have mentioned numerous times about the need to “shift” over to fixed rate. Although that ship is pulling out, it is not too late. Real Estate prices, although still booming in a lot of areas, is largely tapering off and beginning the shift to a “buyers market.”

Which brings us to our next question, “Will Real Estate prices crash?” Well, it may be premature to answer that question in any definitive manner, all indications point to a decrease. While I think “Crash” is too firm a word, given the fact we have enjoyed so much growth over the last several years, I think a “correction” is more in order. The greatest concern will be for those that bought on speculative analysis and for those that purchased property (rental) that does not cash flow.

Now would be a good time to address the two issues above – before it impacts any short or long term objectives you may have.

If your goals in 2006 are in line with getting ahead financially, you really only have two ways to do that. Save more money (by cutting down on some expenses) or two, make more money. Although we often look at a multitude of ways to do both, let’s look for the quick hit in the form of a raise from an employer.

When looking for a raise you must concentrate and three main things.

1. It is assumed that you deliver good quality work. But don’t overlook attitude. Call it “team player” or “likeable” - whatever the description don’t underestimate that people need to like you. It cannot only make the different on if you get a raise or not, but how much.

2. Oftentimes people fail to know what their position is worth. There are many resources online such as www.bls.gov that will allow you to look for similar position (and area). By knowing what an “industry average” is may better help you case.

3. Sometimes you need to simply look elsewhere. Ok, we are usually more comfortable staying in the same place but sometimes you need to make a move to another company. When looking at such a move be sure to focus on benefits such as health care and other employee benefits – they can really add up.

As we say start 2006 we find it is a good time to look back on the prior year for some important financial lessons learned. Consider upgrading your financial plan by taking the following actions:

Prepare for Disaster
With several hurricanes and other natural or man-made disasters occurring in 2005, we saw the importance of having a disaster plan in place for both our family and business. Be sure to keep all important financial documents together in a small fire and water proof box so they are protected and readily available. Also consider digitizing them for storage on remote servers and maintaining physical copies of important mementos or documents in a safe deposit box or with trusted family members in another city. Take time to review your current insurance coverage to be sure it adequately covers your home and business needs.

Establish and Maintain Good Credit
A strong credit history has long been important to your financial health. In 2005, the change in bankruptcy laws upped the ante by making it harder to obtain protection from creditors. Start by obtaining a copy of your credit report and reviewing for accuracy. Reports can be obtained for a fee from credit reporting agencies or you can obtain your free copy from each of the bureaus (as mandated by federal law) by visiting www.annualcreditreport.com. Make a goal to keep your credit score above 720 (based on a range of 300-850).

Protect from Identity Theft
With identity theft on the rise, it is essential to take steps that will help you avoid losing months or years cleaning up the mess it can make of your credit. Be sure to:

• Keep an eye on your credit report for any suspicious use or unauthorized inquiries. Carefully review credit card statements for any charges that were not initiated by authorized users, regardless of how small the charge. We once caught fraudulent use of a credit card early that started with a small charge of under $25 at gas station.
• Purchase a cross-cut shredder and use it to dispose of any trash containing personal or business information
• Install a good virus protection program on your computer and only download files sent to you by people you know. Avoid chain letter type emails.
• Never respond to email solicitations asking for personal information or passwords, even if it appears to be from a bank or other known provider. Avoid this type of “phising” by only initiating transactions online.
• Use passwords and pin numbers that are difficult to guess AND change them often. Avoid using the same password or pin number for every account.
• Keep confidential information secure from visitors or employees in both your home and office.

Think Green
Gas prices are on the rise and unlikely to fall below $2.00 per gallon anytime soon. If shopping for a new vehicle, consider purchasing a fuel efficient model to save money and natural resources. The IRS has provided additional incentive to think green by providing substantial tax credits for purchasing qualifying hybrids or clean-energy vehicles. These dollar-for-dollar tax credits could reduce your 2006 tax bill by up to $3,400 depending on the type of vehicle you purchase.

Maximize Retirement Savings
Retirement plans provide for the ability to accumulate wealth either tax-free or tax-deferred. Many plans also provide a tax deduction for contributions. These tax benefits are in addition to those offered through any employee match. There are also new benefits available under the Roth 401(k) plan starting in 2006. Make a goal to not only learn about the different types of retirement plans but to maximize your contributions for benefits now and in retirement.