Category: Personal Finance

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So the Stock Market Dropped a Little…

S&P 500 and DOW Industrials - Nov-17 to 06-Feb-2018
The bottom, so far, is still higher than where we were in November.

There was a significant drop-off last week through yesterday in the US stock market. The possible good news is that after a few straight days of dropping, today it looks to be climbing again. And the markets seem to have only dropped to early December levels. It’s the market, that’s what it does.

The purpose of this post is to document an observation. My inbox is starting to fill up with email from various advisory services, both automated web-based and actual human-led “capital management” firms to plug their services in these “times of uncertainty”.

I get it. They are taking advantage of a marketing opportunity when a certain segment of the population in the US will get worried that their retirement or investment dollars could be at risk. It just seems a little icky.

\rant

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Real Estate Investing: How We Started Out

Like the game Monopoly, you can grow your money with Real Estate.

This week, we are going to talk about how we started investing in real estate. It wasn’t an overnight decision, or result, for that matter.

My first foray into real estate investing (REI) was to partner with one my uncles and my cousin (his son) to develop an RV park in the Port Fourchon area. It seemed like a great idea…lots of potential for revenue and extended development. And I knew nothing about evaluating the deal to see if it was going to be a money maker or not. I put up the money to initiate the lease of the land ($20,000) and we proceeded to get a loan from a local bank to develop the park. We had to get permits, evaluations, inspections, etc.  The total amount from the bank came to $150,000. Just as the park was about to open, the BP Macondo/Deepwater Horizon oil spill happened and shut down the oil & gas industry in the Gulf of Mexico. The space was leased to a catering company as a staging area for feeding spill cleanup workers and to facilitate a training space.

We eventually opened up the park and began operating. My cousin and his wife managed the operations.

I began traveling around the world a good bit for work and realized that I could not be deeply  involved in the deal in addition to my wife not being happy with me involving us in it in the first place. My cousin offered to buy us out for $30,000, paid over time. This worked for us as it got our  money back, along with about a 17% total ROI.

While the deal made us money, the stress and aggravation of not being in control left us with a bad taste in our mouths.

Fast forward a couple of years and we decided to remodel my in-laws’ home to set up as a rental. My father-in-law passed away the preceding year, leaving the home to my wife. We got it remodeled after a few false starts and bumps in the road. And started renting it out.

I mostly stayed hands-off of the operations and mainly just helped handle repairs & stuff, since it was my wife’s house (via inheritance).

Towards the end of 2015, I started to get aggravated with my job, (for the nth time), and started a more serious search for something else that I could rely on for income. In January of 2016, I found Bigger Pockets, an online forum/educational platform for real estate investors. It was then that I realized that REI was something that I could do. In fact, in a way, we were already doing it. The thing that appealed to me about it was that successful investors rely on systems and processes to make their businesses run well. WOW! I am a “Systems & Processes” type of guy! It was an epiphany, of sorts.

I started listening to podcasts, devouring forum posts related to my topics of interest, attending real estate investor association meetings, and reading books to learn about how to reach my financial goals through  REI. I put together a 30,000 foot overview of what I would like to do and how I could do it. When I discussed my idea with my wife, she was initially skeptical because I repeatedly come up with plans to make money and either never initiate them or follow through on them.

I continued to learn about buying and managing rental properties, along with operating a business. I became more involved in the operation of the existing rental, more or less making it my responsibility.

So, that is how we got started in REI.

Let me know what you think in the comments. Ask questions, tell your story.

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On Achieving Goals or How Much Is Enough

“Everything we see hides another thing, we always want to see what is hidden by what we see.” -René Magritte

What is your goal with regards to financial stability? Do you want to be “a millionaire”? Do you want to be considered one of the richest people in the world? Do you want to retire early and follow a passion, such as world travel or support a volunteer organization?

Or do you just want to get to the point of being able to live comfortably and not have to worry about worrying? (FYI, these are not rhetorical questions. I really would like to know your goals)

There seem to be several ways of looking at this and all seem to contradict each other in some way, shape, or form.

Having the goal of becoming “a millionaire” is either not a good idea (according to CNBC) or highly dependant on your goals and specific situation (according to Kiplingers). TL;DR – Lot’s of factors to consider.

If becoming one of the richest people in the world is your goal, there is a pretty good chance that you already are there. If you make more than $34, 200 per year in income, you are already in the top 1% of the world’s wealthy. If you are looking at Net Worth, you need to have a Net Worth of  $770,000 or better to be in the  top one percent of the wealthiest people in the world.

For those of you who want to retire early for travel or whatever, it is possible with a little effort and strategic thinking. Or, better yet, take the Tim Ferriss approach and set yourself up to take multiple mini-retirements starting now.

I kind of like the Tim Ferris approach and want to achieve that one day. And we are working towards that goal. In fact, I would venture to say that we are almost there.

I have worked most of my life with the goal of getting to this goal or that goal, then everything will be: easier, gravy, much simpler. But  this past year, we had a revelation…over the last 15 years or so, every change in situation at work or uncomfortable conditions to be endured were rationalized by saying “this is only temporary and when I achieve “X”, things will be much better!” The revelation was that every time “X” was achieved, a new “X” would take it’s place. It’s a continual cycle of expanding goals.

Not long after realizing that this was continually happening in my work life, a speaker at a REIA (Real Estate Investment Association) that I attend in Lafayette, Louisiana covered the topic “Freedom Number?…Check! Now What? Albert Pellissier basically pointed out that you don’t need to be on a continuous roller coaster of “Striving for ‘X'” and spend more time with your family, enjoying your life.

That is what I intend to do. I also want to share tips, tricks, and ideas, through this blog, with all of you, to help you achieve your goals.

Let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this  blog.

 

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My History With Money, Pt. II

Last post, I talked about the examples of managing money that I grew up around. I thought I would go to school, then come back to work in the family business. While in college, I slowly realized that those techniques would not lead to success. I watched the family business decline and came to the conclusion that if I continued on the track I was on, the best I could hope for was a low-paying job with the state and that did not fit in with my goals of owning my business and becoming wealthy.
Oddly enough, these observations drove me to the oil and gas industry. When I started there, the old-timers would ask me why I got into it. My reply was “Because I wanted a steady paycheck.” Their response was to laugh & laugh! It was funny because at the  time, the industry was just coming out of one of the worst slumps it had ever seen (early ’90s) and “oilfield” + “steady paycheck” did not make sense to them.
So I began my oilfield career and also began contributing to a retirement fund. I mostly contributed the maximum amount allowable. I never really missed it due to those savings occurring via payroll deduction. That being said, the money I did take home, I felt entitled to spend, since I earned it. And spend I did! I bought a huge house, lots of electronics to fill it, decided to open a recording studio in the house, had to do repairs along the way, and a host of other debt accumulation.
I was roughly $100,000 in debt. So I decided to do something about it. I sold the house for a small profit, removing about 87% of my debt, and moved in with a fraternity brother as room mates to cut my expenses. After about 6 months I had paid off the remaining debt and began saving money to build a house once my fiance and I got married.
That was when my financial conservativeness training began. My wife taught me that unless we could pay cash for something, then we did not need it, in addition to just because you want something, doesn’t mean you need it.
Fast-forward 15 years and through saving, strategic investment, a little inheritance, and core principles of not spending frivolously, we are pretty much set for retirement.
I turn 50 this year and could probably retire now, but I am concerned about health insurance costs. So, for the time being, I continue to work to keep the health benefits, while growing real estate investments and helping guide the growth of a business investment along with my partners.
I think the key things that helped to get us here are as follows:
  • Learning to not spend, especially when I don’t have it
  • Learning to not spend just because I have it

 

Saving money to allow us to strategically take advantage of opportunities when they presented themselves.
Let me know what you think in the comments. Ask questions, tell your story.
If you like my posts, please share them with others and subscribe to this  blog.
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My History With Money, Pt. I

What I grew up seeing around me.
What I wanted to do.

Today I am going to relate my experiences with Money from when I was a child to present day, in a loose chronological order.

 

My parents split up when I was approximately 10 years old and I don’t really remember a whole lot about our finances prior to that. What I do remember is that after that point, things were not easy.

 

We moved in with my grandparents, away from friends and family, started a new school, and began a different life. At the end of that school year, I began an unwanted tradition of working every summer on one of my grandfather’s shrimp boats and later in my uncles’ seafood businesses. Whatever money was earned went to help cover costs for my mother, my sister, and me to survive. I would get a hundred dollars at the end of the summer to buy school clothes for the upcoming year and that was the about all I would see of what I made.

 

My cousins of a similar age were doing the same work as me, but they got to keep all of their money, spending it on nice stereos, toys, etc., because their parents were making money and running a business.

 

I started learning about the businesses because it seemed like the way to not be poor. What I learned, besides the mechanics of actual operations, were bad money management habits.

Things seemed to be all about making sure you got your share out of the revenue, to the detriment of everything else…spending the holidays at hunting camps, spending the last bit of money you have, with no guarantee of future revenue.

This is not a good model to follow, especially if you are trying to maintain a steady income, much less, grow your income. Eventually, within a few years, both uncles were out of money, with no business to support them, because they only focused on the “right now” and had trouble planning for the long haul.

The takeaway lesson from today’s post is to not spend everything you make. Practice restraint and plan for the future. Short of winning the lottery like a former co-worker, you will not get rich quick. BUT, if you practice this as a habit, it should allow you to prepare for retirement.

Let me know what you think in the comments. Ask questions, tell your story.

If you like my posts, please share them with others and subscribe to this  blog.

 
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2018 Goals (A Hello World Post for this Blog)

HELLO WORLD!

If you do not know me already, my name is Clint Galliano. I live in Louisiana and have worked in the oil and gas industry for most of my career. But I also do other “stuff”. In addition to working in O & G, my wife and I invest in real estate and invested a door manufacturing business, which I sit on the board of.

I started this new blog because I wanted to start posting content mainly not related to my OFTAS Blog (Oilfield, Tech, And Stuff), and leaning more towards finance, business, and investing.

In addition, one of my partners challenged me to write more in 2018. I take it as a growth opportunity.

While 2017 was interesting for me and my family, I am ready to plow into 2018 and grow as a person and as an investor. I am going to set a goal of writing a post a week on this blog, minimum, for the whole year. I may post more, depending on current events.

Below is the list of topics I plan to cover:

  • Business Finance
  • Technology
  • Personal Finance
  • Automation
  • Current Events
  • Personal
  • Real Estate Investing
  • Holiday Lighting Displays
I hope You enjoy my posted and can benefit from them.
Leave me comment to let me know what you think about the topics!
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