Rockefeller, Getty, Carnegie, Ballmer, Trump — When it Comes to Current
Market Conditions, There are Lessons to be Learned from these Billionaires
In all of the studies of the wealthiest individuals in history, scholars, researchers and even casual readers continue to find ONE major similarity among all those who built great fortunes. Do you know what it is?
Every single billionaire you could ever read about has used the exact same strategy at some point. They bought when everyone else was selling, and they sold when everyone else was buying. They have invested heavily into assets at deflated prices. They have gone against public sentiment.
Buy low and sell high. It worked for the world’s first billionaires, and it’s working for today’s billionaires … including those in real estate, the market the media seem to be trying to scare everybody out of. But the time to be scared of the real estate market is past, real estate billionaire Donald Trump said recently in an interview with Larry King:
“It’s an amazing situation. There are tremendous opportunities. You know what’s interesting? I was begging people not to buy real estate two years ago and everybody was buying. And now they are less interested when this is the time they should be negotiating to buy. This is the time.”
In order to acquire wealth, you have to think like a wealthy person. Even more important, you have to do what wealthy people do. And wealth people are buyers when times seem the worst. Here is another example of the one major similarity, described in the autobiography of J. Paul Getty, the billionaire who built much of his fortune during the Great Depression — the worst economic time ever in this country.
In his autobiography, Getty wrote: “In business, as in politics, it is never easy to go against the beliefs and attitudes held by the majority. The businessman who moves counter to the tide of prevailing opinion must expect to be obstructed, derided and damned.”
Getty saw the Great Depression as an opportunity to acquire assets for his businesses at discounted prices. Getty didn’t listen to the press. He made independent decisions based upon his own beliefs about the market. In fact, he did the exact opposite of what everyone else was doing. Here is an example of this as quoted from his book.
“When I purchased the Hotel Pierre, located on Manhattan’s swank Fifth Avenue at 61st Street for $2,350,000, it was New York’s most modern hotel. No crystal ball was needed to show that this was an excellent buy. The country was rapidly emerging from the Depression; business conditions were improving steadily. Business and personal travel were bound to increase greatly. There had been very little hotel construction in New York for several years, and none was planned for the immediate future. The Pierre was a bargain and a hotel with a great potential. But the gloom-and-doom chaps were too busy titillating their masochistic streaks with pessimistic predictions of worse times to come to recognize such bargains as this when they saw them.
I began negotiations for the purchase of the Hotel Pierre in October of 1938 and took possession the following May. At today’s (1965) land and construction costs, between 25 million and 35 million dollars would be needed to duplicate the Pierre in New York City.
I’m not crowing; I’m merely trying to show that there are always opportunities through which businessmen can profit handsomely if they will only recognize and seize them — and if they will disregard the pessimistic auguries of self-appointed prophets of doom.”
To understand this commonality further, also consider the following fortune-builders:
What lesson can we extract from these wealthy individuals?
Buy when everyone else is selling. Lock in valuable assets at discounted prices. Sell these valuable assets when the market rebounds for significant profits.
What is Trump doing today, buying or standing idle? What would Getty do if he was in your shoes today? What would Rockefeller do? Would these multi-millionaires sit on the sidelines, or would they get busy buying homes at discounted prices? Smart Real Estate Investors are going to use the unique real estate market as an opportunity lock in a fortune.
Today’s real estate market opens the door for the select few to achieve financial independence very quickly. This really is the time. The media would have you believe you should be scared of real estate right now, but as some of the richest people in history have shown, buying when everyone else is scared is a common strategy to acquire massive wealth.
And while everyone wants to tell you how bad the market is, nobody is talking about what will ultimately be the biggest truth …
This market will rebound
Another commonality of all the richest men in history is they invested into demand. Right now, real estate prices are dipping — it’s a correction from the real estate boom in recent years — but every other time the housing market dipped, it has come back strong. This is because there is, was, and always will be a demand for affordable housing. The subprime mortgage crisis has made it tougher to get housing, but the demand is still there. And …
This demand is estimated to grow by 40% over the next 20 years
At a recent meeting I attended with leading Real Estate Professionals and Investors from around the country, one of them said:
“The need for affordable housing has not changed. The only thing that has changed is the financing for affordable housing.”
He is 100 percent correct. To take the point further, we should step back and look at the projected growth of our population through the year 2036.
If you really study this graph, you’ll see that the population is expected to grow significantly over the next 20-40 years.
Many people think that they missed their big opportunity to buy real estate. Well, this is not the case. Sellers are motivated to sell their homes right now. Home prices have dropped significantly in certain areas from previous years, and the population is projected to grow dramatically over the next few decades. The opportunity to invest is right now. Now, if our projected population growth were to be declining, I might have a different feeling about the real estate market. The population growth chart gives us a crystal ball for our real estate investments. This crystal ball is not available with any other investing opportunity.
It is very easy to see that demand for housing will be increasing. As demand increases over time, so will housing prices and/or rents. Real estate is unlike so many other investments because its value is based upon need. Humans NEED housing. The key point is that people NEED housing. People don’t NEED stocks and/or mutual funds. There is a BIG difference.
Always invest into demand.
Demand is always fueled by need.
You don’t have to be rich to invest in real estate right now, but it never hurts to learn the lessons taught by those who have already become rich. And the richest men in history would be — and are — investing into the demand of real estate at bargain prices right now. Shouldn’t you be investing now too?
Information for this report was obtained with research from several books, including “The Wealthy 100” by Michael Klepper & Robert Gunther; “How to Be a Billionaire” by Martin Fridson; “John Jacob Astor” by Axel Madsen; “Andrew Carnegie” by David Nasaw; and “The Titan” by Ron Chernow. Additional commonalities of wealth can be found in the Income for Life Monthly Newsletter.
I have been a member of the Income for Life program for one year. As with many people intrigued with Real Estate investing, I have attended many seminars by several different Real Estate Gurus over the years. While many of these “experts” would grab your interest with success stories, they would also charge high fees for you to learn their secrets. When I attended Bob Mangat’s workshop a year ago, I was impressed by the simple plan he had to help people get involved with real estate investing. To me, the Rent-to-Own concept was logical and something that I did not have to radically alter my lifestyle to utilize. The other major factor that persuaded me to try the Income for Life program was that Bob Mangat lives and works in the local area. As a result, he understands the concerns and problems for either first time or experienced investors in our local market.
In October 2009, when I joined the Income for life program, I set a goal of buying 10 RTO properties. I believed in aiming high to achieve success. Despite changes to the mortgage rules last April, I was able to purchase 5 RTO properties generating a monthly revenue stream of over $14,000.00 and creating a positive cash flow of over $4,000.00 per month. Now while I did not achieve my goal of buying 10 RTO properties, I can only look back at what I have now and think if what I had started would be considered a failure or a success.
I wish to thank Bob and his team over the past year for all of their support and look forward to continued success in the future.
- Keith Chong – October 2010