Yap Money: A Weird Story About Money

What follows is an incredible story of a well developed economy based on giant, round, immovable stones.

A small island called Yap held an indigenous population that was untouched by civilization until the 1800’s when Spanish colonizers discovered them.

What they found so interesting was that despite their primitive nature, they had a very advanced and well-developed system of money.

They used these large, round, thick stone ‘wheels’ with a hole cut out in the middle in which they could insert a pole to help with its transport.

When I say large, I mean as large as 12 feet in diameter!


Even though they could be transported, they rarely were. They merely offset transactions against each other. Any outstanding debts would just be carried forward in expectation of some future exchange.

Some transactions were large enough to involve a price of an entire stone (called a Rai). But even these Rais were RARELY moved. The acquirer of the Rai was happy to leave the stone in its original location undisturbed on the previous owner’s premises.

My favorite part of this story! —->

There was one family whose wealth went unquestioned despite the fact that the Rai the ‘possessed’ had never been seen by anyone, including the family itself!

This was because during its transport it had fallen into the sea and sunk to the bottom of the ocean.

Everyone agreed that this unfortunate incident shouldn’t change the fact that the family still owned it, despite the fact that it was separated by a few hundred feet of water.

So the purchasing power of that stone remained as valid as if it were leaning against their house.

Why I love this story:

It seems so strange to try and imagine how this system could even work. Only then do I realize that we have the exact same system today.

Our stone ‘Rai’ are merely gold in a storage facility somewhere.

Or they are the ‘cash’ in a bank that I never see while I am transferring digits on a computer or iphone from one person to another.

Eventually the cash we use might disappear completely, and the numbers on our computer screen will be backed by agreed upon beliefs which have been the basis of economies for centuries.

Why I Can’t Stop Investing in Facebook:

I Can’t Stop Investing in Facebook:

Almost a year ago to the day, I published my first book How to Leverage Your Real Estate Business With Facebook. Before I started researching for my book, I was already an avid user of Facebook. I considered myself a late adopter of Facebook, as late as someone could be who was in college during the college-only years of Facebook.

Half-way through writing my book I made my first investment into Facebook. The more I read, and the more I wrote, the more I invested.shut up and take my money

Today it is by far my largest holding. No, it does not pay a dividend. But for someone like myself (early 30’s) who is investing for the next 10-50 years, Facebook has a LOT of benefits. Imagine being able to invest in Google 10 years ago. That is where I see Facebook today. Much like Google, who began as a search engine, Facebook is much more than just a place to stalk your highschool exes.

The Biggest Misconceptions Regarding Facebook:

Facebook is just for teenage girls looking to share photos:
This is the hurdle Facebook faced during its first 3-5 years of INSANE growth. In addition to its incredible user acquisitions, its ability to monetize these users has been even more impressive.

Teenage girls are no longer using Facebook:
What once was considered its biggest problem, critics now maintain the opposite to be true. But hey, critics gonna criticize.


All the young people are using Snapchat now:
Snapchat Snapchat Snapchat. AKA: Tha Facebook Killa. Except that its not. The biggest threat Snapchat poses to Facebook is that its attracting all the young people. When I tell people I am investing in Facebook over the next 10-50 years, their biggest concern is always Snapchat.

Tell me honestly, do you really think Snapchat is going to destroy Facebook and make them obsolete? Myspace is the common reference here, but remember who won that battle. I have mentioned previously why I think Instagram Stories is not a Snapchat killer, but still poses a threat to its growth, so I won’t touch on that here. (Don’t forget who owns Instagram)

What it all comes down to is this: The world is big enough for Facebook AND Snapchat. Much like the world needs Coke, Pepsi AND RC Cola. If you could go back in time to the invention of Soda, which one would you bet on?

If it isn’t clear by now, I feel that Facebook is Coke. Or using the television analysis, I think Facebook is CBS. Snapchat is currently MTV, but they are trying to become NBC. Will they? Maybe. Will it affect CBS value? I don’t think so.

If your argument against Facebook continuing to become a successful company is the existence of Snapchat, then I suppose you shouldn’t invest in any company ever, for fear of a competitor putting them out of business.


Facebook isn’t cool anymore.
So what? Neither is Microsoft. Neither is Apple. What companies are cool anymore? What companies can stay cool from one generation to another? Is Snapchat going to be cool in 5 years after it monetizes its users, seeks rapid growth, and creates unique partnerships like its recent deal with NBC to stream episodes of The Voice?

The hardest thing for any company to do is monetize its customers without alienating them. Even the people who claim to hate Facebook still check their accounts 3x an hour.

What I love about Facebook:

REAL ESTATE– As someone who cut their investing teeth in the real estate business, I will always have a soft spot for this industry. Today, I believe the most valuable real estate in the world is the home screen on your smartphone.

How many apps do you have on your phone? How many do you actually use? How many do you use daily? How many are there on your home screen?

This is like being one of the first 3 channels on your TV. Can you put a value on this? Ask CBS, NBC and ABC.

Right now, Facebook owns 3 of these channels- err, apps on your home screen. Maybe not yours, but globally, Facebook occupies three of the most used apps: Facebook, WhatsApp, Instagram. Facebook messenger is also growing rapidly and soon they will allow money transfers through your account.

Thats like owning three huge blocks of prime real estate in the world’s fastest growing and most valuable city.


GENIUS– Is it safe to call Mark Zuckerberg a genius yet? Yes, yes it is. In fact, one of the smartest things I think he has done is surround himself with any and all of the other geniuses he can find. Either by hiring them, or acquiring them.

When Facebook buys a company like Instagram or Occulus Rift, he isn’t just buying the company. He is buying the people. These are some of the smartest people in the world.

Then, he gives them unlimited resources and more smart people to interact with. This may not always lead to optimal results, but over time will lead to more positive returns than negative. I am literally willing to bet on this.

SMART GROWTH- Zuckerberg, and Facebook, understand the growth model better than anyone. They wrote the book on it.

Step one– Acquire users through exclusivity (college kids only)

Step two– Age up (grow with that demographic and then acquire older users)

Step three– create so much value for users that when you monetize they are too addicted to change.

Step four– grow grow grow.

Facebook and Instagram are both in step four. Most competitors don’t make it past step one. Some make it to step two and start to get offers from Facebook (as part of their step four). Snapchat is a unicorn currently struggling with step three (after turning down offers from Facebook).

I personally think Snapchat will succeed. I think they will find unique ways to monetize and will occupy a space on your home screen for many years.

But I don’t believe this is a zero sum game affecting Facebook. I would be more worried if I owned a television studio like NBC, ABC, CBS. Sure, they held a monopoly on your attention for several decades. But so did Radio and Newspapers.

In the battle for customers, clients and audiences, the fight between Snapchat and Facebook is all for show.

The real fight is for space on your smart phone home screen. Facebook and Snapchat are already there. While other media conglomerates are slow to realize this shift in your attention, companies like Twitter, Instagram, Snapchat, YouTube (google) and Facebook are solidifying their positions and investing in the next ones: Augmented and Virtual Reality.

Oh, and did I mention that Facebook owns Oculus Rift? Currently the biggest name in this space?

What are some uncommon ways to work smarter not harder?

Work Smarter Not Harder

This post originally appeared as an answer on Quora HEREquora

  • Take the first parking spot you see. Period.
  • When vacationing with kids, order supplies like formula and diapers from Amazon and have it delivered to your hotel so it’s waiting for you when you get there.
  • Buy a new car with a warranty: the poorest people end up spending the most money on  cars when they purchase the cheapest one they can find that constantly needs repairs. $500 here, $1000 there. Sometimes trying to save money costs you too much.
  • Starbucks mobile app when you are 2 minutes away. Or even waiting in a long line. As soon as the order comes through its added to the queue, and skips the line you are standing in.
  • Services like Trunk Club that do your clothes shopping for you, sends you a trunk, try 2zLQAV1Pon what you like and return what you don’t like by returning the trunk. UPS deliveries it and picks it up from your house. Not a necessity but MUCH better than going to the mall. IF you do have to go to the mall, take the first parking spot you see.
  • Automate savings and investing. Whether it’s a pay check or other income source. Set up automatic transfers or withdrawal into another account for Future You. Set it and forget it (but maybe review it once a year and reallocate where necessary)
  • Don’t worry about trying to make a quick return on investments, instead focus on DCA or Dollar Cost Averaging. Be the tortoise, not the hare.
  • Never stop learning. Turn your car into a university on wheels. This means no more talk radio, instead replace it with audio books.  Or better yet download AUDIBLE and subscribe to get discounts and 2 free books Audible – The Cash Flow Lifestyle
  • If you don’t drive then do this on your work commute. When you walk the dogs. When you work out. Be more efficient with your time. Never waste time.
  • If you aren’t handy, hire a handyman. Whatever you do in life to make your money you are better at than trying to fix the toilet or repair an outlet. Spend your hours doing your thing so you can afford to pay others to do theirs.
  • Wake up early. Exercise. Meditate. Eat well. Take care of your body. Be nice to others. Stay humble. Work hard even if you are smarter. Everyone I know who does these things are happier people.

Brief History of Money

Brief History of MoneyHow much do you know about money? Money is a beautiful thing. Mostly because it isn’t even real. Its a belief. Its a faith. It could even be considered a religion.

Since the creation of the idea of money, it has existed through generations and cultures around the world. It has evolved, spread and become ingrained in society… much like some religions.

I love money, and you should too! Money is not the root of all evil. If you think that, then you will never have any. Or if you get money, you won’t have it long.

If you give bad people money, they will be bad people, but with money. If you give good people money, they will be good people, and have money. Money is not bad. Money is freedom.

How is money freedom? Well, what is the price of your free time? How much do you sell your time for? Do you work 40 hours per week? Do you trade 5 days of work for 2 days of freedom?

Is this a good return? How much do you make? In terms of time you are on the losing end: Selling 5 days and getting 2 days in return.

While the amount of money you receive will vary , the simple fact is that the answer is money. You sell your time for money, and you probably don’t even know why.

Because your parents told you to? Society? Our educational system?

Again, don’t get mad at money. I like money, a lot! So I ask again, how much do you know about money?

I present to you, an essay: A Brief History Of Money



The history of the development of the human society from the hunter-gatherer societies to the modern worldwide global community, is highly intertwined with development of money.

What is money and what is debt? Moreover, how can paper have so much control over our lives?

Money could be anything from livestock to sacks of grain or sea-shells, precious metals, gyms…etc. that can be considered by the general populace to have value and can be exchanged for goods or services.

Aristotle, in Politics I, argues that money has inherently two natures: a means of exchange and a means to an end.  Although he deliberately ignores explaining the second nature, his work on money is most important since he was one of the first to document the development of money and its rise to power in modern society.

The essence of his analysis lies in the fact that value of money is directly related to the trust and value given to it by the people who exchange them; and that fact has never changed across the centuries.


The Barter System:

The hunter gatherer societies of ancient man could be a model of what closely resembles a ‘communist utopia’. Every member of the tribe did the particular task that was assigned to him and the wealth of the tribe was combined and distributed equally (with more going to the chief or best warriors of course.)

It was believed by several historians, philosophers, economists; including Aristotle Adam Smith in his book “Wealth of Nations”, that as the tasks of society became more specialized, a system of bartering was developed. The barter system essentially involved an exchange of goods or services with other goods or services.

The system involved, for example, a grain farmer in need of purchasing fruits. He  exchanges his grains for fruit with the fruit farmer. However, the barter system was fundamentally flawed due to the coincidence of wants.

If, for example, you produce cheese and you need grains, you can only trade with the grain farmer if he wants cheese. Another problem with the barter system is the inability to break the currency fairly. This was particularly a problem for people who traded in livestock. Trading a cow for a kilogram of grains is unfair, but killing the cow to cut into pieces for fair trade might sound reasonable but also devalues the remaining cow. It is from these predicaments that Aristotle and Adam Smith assumed that need of money existed and hence evolved.

The problem with this theory; argues anthropologist David Graeber in his book “Debt the First: 5000 Years”, is that it lies more on personal experience rather than fact. The barter system never died out and today people still use it, even in advanced societies.

Graeber, therefore, claims that ancient societies used to trade on a trust based debt system and gift economies. The system was based on societies that were small enough so everyone knew each other and potential consequences so chances of someone defaulting become low. He argues that in a society like this, if you wan


The Rise Of Money:Brief History of Money

The Fertile Crescent

The Fertile Crescent is a region of land stretching from Asia Minor through the Middle East and into Egypt. The Fertile Crescent was host to humanities earliest civilizations. These included the likes of the Egyptians, Babylonians, Sumerians and Phoenicians.

In their early stages, none of these civilizations had a currency in a form we understand today, but they did have a centralized government with taxes and they often traded with each other.

The earliest records of currency usage was traced back to livestock and livestock products like manure, then eventually grains and other plantation were used.

In 4000 BC, the Egyptians are known to have used gold bars as a standard of value. This is important as it set a specific standard when traders went to exchange good. For example, if 100 pounds of manure was worth one gold bar, and 150 pounds of seed was worth one gold bar, then traders could determine that 100 pounds of manure was worth 150 pounds of seed.

Mesopotamia followed the same path and later created the ‘Shekel’, which was a standard set by silver bars.  This same concept was eventually implemented by Great Britain with the British Pound; where 1 pound valued 1 pound mass of silver.

The Mesopotamians, however, were also among the first to use clay tablets as a form of payment and debt collection. Clay tablets were used to keep records of debts between trading interactions.


In 600 BC,King Alyattes of Lydia (now part of Northern Turkey) was the first to ever establish a gold minted currency. The coin was minted with a naturally occurring alloy of gold and silver known as electrum. The coins were engraved with symbols of animals such as owls and snakes, which denoted the value of the coin and what  it could purchase.

This allowed trade to flourish in the region and was soon adopted by neighboring empires. However, due to its growing wealth,  Lydia drew the ire of the Persians and eventually fell to the Persian Empire.


Although they were not the first empire to develop a currency, China’s secluded location meant that most of its developments were of its own innovation.

Around 1100 BC, metal weapons and daggers were miniaturized and being used as currency. Over time, they were rounded, for obvious reasons, and a hole was added in the center so they can be tied together using strings. Eventually, merchants in China started to create ‘debt papers’. Because these ‘debt papers’ were so well documented and supported by the people, these papers eventually became a currency themselves.

As the Chinese organized military grew in numbers and strength, requiring payment through coinage became very inconvenient. The paper currency idea seemed intriguing to the Chinese Government Officials and was eventually instituted.

In 1200 AD, Marco Polo visited China and saw transactions with paper money first hand. Impressed, he was first to bring the idea back to Europe.


The first currency to develop in Africa was cowry shells and it remained the  dominant source for centuries. In fact, Mozambique was still using cowry shells as currency during the colonial times, even with precious metals and gems available.


The use of gold coins was transferred from Lydia to the Roman Empire around 500 BC. Before that, metals such as copper and its alloys, particularly bronze and before that obsidian, were being used as currency.

The introduction of gold coins was particularly useful for fueling the colonial desires and conquests of the Roman Empire. Soldiers were now being paid in gold, instead of bronze and plunder.

Since gold is a rare metal, when governments faced shortages they often chose invasion of other nations, or colonizing less developed nations for plunder and to enslave populations to mine for more gold.


IOU and Debts:

An IOU, which is the prequel to bank notes, surfaced in times where gold and precious metals used to make coinage was scarce. It was customary then for merchants with safes to store the gold and issue a paper with the value of the gold owed to that person.

Since it was easier to divide the value of paper by issuing new paper than it was to smelt down the gold into smaller denominations, IOUs or ‘debt paper’ rose greatly in popularity.

IOUs became incredibly popular after the foundation of the first official government banks in Ptolemaic Egypt. They were used to make daily payments and most wealthy people kept their savings in the bank. Archeologists have discovered records of these transactions occurring on a daily basis!

Brief History of MoneyDevelopment of Banking:

The fall of the Western Roman Empire in the 9th century gave rise to the Italian City-States that survived. Living on the remnants of their previous glory, the Italian City-States remained an important center for trade in Europe.

The word bank is actually derived from the Italian word “ banca” which means ‘table’, which the money lenders used in order to conduct their business. During this time, Europe, following Christian Doctrine, banned Christians from usury. or the implementation of interest on loans.

However, Jews were exempt from this law, not being Christian and all, and they were the only ones capable of loaning money with interest. They were not viewed upon positively by Christians, but were the only sources of financing since even the most generous of Christians didnt want to lend money to someone with no upside and all down side. Shakespeare’s “Merchant of Venice”, touches on this negative view towards Jews and money lenders.

During this time, several currencies were being used throughout Europe and their value was being calculated based on their gold and silver content. Additionally, this  usually changed based on the current state of the issuing government. Lastly, the Roman Numeral system was being used by many , further complicating most of the calculations required for money conversion and interest calculations.

Liber Abaci

In 1202, Fibonacci, also known as Leonardo of Pisa, published his book “The Liber Abaci”, or “The Book of Calculation”. This offered the first solution to many of the European currency issues. The book was meant to demonstrate the superiority of the Hindu-Arabic numerals, to the conventional Roman numerals. It also included several concepts of interest and debt calculations, money conversions and many other concepts that will be later incorporated in modern banking. This coincided with the return of Marco Polo advocating for the use of paper money.

The Medici

The Medici were a prominent family in the Italian City State of Florence. There were several prominent members, but the most important Giovanni di Bicci de’ Medici (c. 1360 – February 20/28, 1429). Giovanni set the foundation for modern banks.

Since usury was still illegal for Christians, and the current money-lender industry  had a business model that was highly prone to customers defaulting on their debt, Giovanni reinvented the business. He proposed that he will run a currency exchange business where a small fee would be paid as a percentage of the total transaction which wouldn’t be considered usury.

He also proposed the use of his vaults as storage for deposits from wealthy kings and the Pope. He could then use these money deposits to finance other money transactions as well as return an interest fee to the depositor for using his.

These ideas revolutionized banking in Europe and subsequently made the family incredibly powerful and prominent. The Medici banking network extended throughout all the city states and was highly reliable.  Eventually, it collapsed due to high risk debts where the debtor defaulted. Nonetheless, the business model remains as ghost within modern business models.

Inflation and The Spanish Empire:

In the mid-15th century, the Spanish colonial empire discovered a literal mountain of silver in Bolivia. Using slaves acquired from the indigenous populations of nearby regions, the Spanish empire was capable of producing 160,000 tons of silver between the 16th and the 18th centuries.

This sudden influx of silver gave the Spanish empire extraordinary wealth and turned their country’s currency into a de facto currency in the world. So much so, that the Spanish- Chinese silk trade greatly enriched China with silver and caused them to reform their entire tax system, requiring their citizens to pay taxes with silver instead of what was historically used: grains and labor.

The lack of economic understanding by the Spanish government and their inability to reform taxes due to the huge influx of silver lead to a great inflation in Europe, and even reaching and impacting the Chinese empire. This inflation, coupled with the expulsion of the Jews and the Moors from Spain, eventually lead to several revolutions in the Spanish Empire and their eventual defeat by Elizabeth I of England.


Brief History of MoneyBank Notes and The Gold Standard:

Throughout history, the idea of “paper currency with a standard of value tied to gold” was continuously sought for myriad of reasons. The ease of use, the potential to travel and store wealth, and breaking down barriers of trade are just a few.

Although first used by the Chinese as a an attempt to counter their inflation problems, Bank notes soon became popularized in Europe, with much help from Marco Polo. The first bank note was used in Sweden in 1661 by a commercial bank. Following the Spanish inflation, the effectiveness of this idea grew and several other commercial banks began to adopt the concept of issuing paper currency backed by precious metals, gold or commodities.

This was essentially an advanced form of an IOU where a bank pledges to pay the value of paper to the holder in gold. What made this system more advanced than a mere IOU was that whoever was holding the paper could receive the gold, not just who the debt was issued to. This meant instead of trading gold, you could just trade the paper and any government would back its value.

Several measures had to be set where banks should have enough gold reserve to give gold to all bank note holders in case they want to withdraw their gold. However, due to investments and lending mass induced panic have several times threatened to shut down the system as people lost faith in the paper and attempted to withdraw the gold.

In the 1900s the United States also adopted the gold standard. The value of the dollar was tied to gold, meaning at any time you could trade your dollars in for actual gold.

After World War 1, most of the countries had to abandon the gold standard due to the economic depression. This was the result of owing more money than gold reserves. The United States, instead, devalued its money by slightly decreasing the value of the dollar vs. gold. This meant that it now too more money to by the same amount of gold before the war.

Eventually, the gold standard  in the United States was also dropped during the Vietnam War in the 1970s when President Nixon ordered the Federal Reserve to abandon in order to induce a temporary inflation to support the war costs. The intent was to return to the gold standard following the completion of the war.
(For more on how this one decision changed your money for ever, read: What Would You Do With One Million Dollars?)

Fiat Currencies

Most currencies today are known as fiat money rather than commodity money. Contrary to commodity money which is usually backed by precious metals or goods, fiat money is a worthless object that is widely accepted as payment method. Worthless in the fact that other than trading it for goods and services with the belief of value, there is no other use for the currency. For example, if you couldn’t buy anything with your dollar, what could you do with it? Burn it for 30 seconds of heat possibly?

The value of the money is determined by several factors, but it is for the most part determined by the issuing authority and government that guarantees its value. Fiat currency can lose their value under several conditions such as; the populace refusing to accept it, the issuing agency fails to guarantee the value or the destruction of the government. Historically, the biggest factor remains to be the trust of the people and whether or not they believe in their governments ability to back its value.


The US DollarBrief History of Money

The history of the US dollar can be traced back to the 1690s, before the United States was officially established. The first Colony to implement paper money was Massachusetts, which used it for financing military expeditions. Soon, other colonies followed. There were British restrictions imposed on the colonies paper money and in 1775 non-British currency was banned when the American Revolution began.

The Continental Congress then introduced the continental currency which did not last long due to insufficient bank support and rampant counterfeiting. This led to the charting of the first national bank in Philadelphia, The Bank of North America, in order to aid government finances. In 1785, the dollar was to become the currency of United States.

In 1792 the Coinage Act helped organize the monetary system of the states as it introduced gold, silver and copper.  In 1861, the Greenbacks or the green paper note was introduced to finance the civil war. Several techniques such as treasury seal was used to combat counterfeiting.  In 1863, the national banking system was drafted by congress in order to allow the US Treasury to oversee the issuance of National bank notes, which in turn, made it easier for banks to distribute money and purchase US bonds.

The Federal Reserve

In 1913 The Federal Reserve Act was issued which established one central bank and organized a national banking system that could keep up the ever-changing financial needs of the States. The board issued a new Federal Reserve Note in 1914 in the form of a $10 bill.

Confederate Money

During the outbreak of the American Civil War, the confederate government in the south issued the Confederate States of America Dollar. It was one of the first perquisites of fiat money as it wasn’t backed by any assets, only simply the promise to pay those who bear it after the South wins.

The faith in the currency started to diminish as the war tilted in favor of the North. Inflation followed, and by the end of 1863 it was worth 6 gold cents and kept on declining. Now the Confederate dollar, also known as “Greyback” is a prized collectible item with many versions.

Electronic Currency:

Today, economic transactions regularly take place electronically, without the exchange of any physical currency. Digital cash in the form of bits and bytes will most likely continue to be the currency of the future.

The problem with concepts like Bitcoin, however, is that they are truly fiat currencies with absolutely no value behind them ever. There is no government willing to go to war to defend its value, and no way to store it other than electronically. This leaves it open to many security issues.



If you have made it this far, congratulations. I appreciate you. This is important stuff. You should study the history of the things you want, and I want money. You should too.

But remember, money is just an idea. And inflation is a small parasite that is constantly eating bites out of your savings unless you are continuing to grow it.

How do you grow it? Income Producing Assets.

These pay you money every month, and also increase in ‘value’ as inflation grows. If you want to build wealth, this is your path.

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Brief History of Money

So You Want To Be An Investor? Don’t Quit Your Day Job


Don’t Quit Your Day Job

I often get asked “Where should I start?” or better yet, “What would you do if you were me?”


If I were you? I would get started immediately! But that doesn’t necessarily mean investing in Real Estate. Here’s why:

I cut my teeth in the Real Estate Investing game at the perfect time to be in the Real Estate Investing Game. I knew this at the time because everyone told me how stupid I was for getting into real estate in 2009.

This was a combination of being introduced to the right books at the right time, investing my savings and income made from my first company into Kiyosaki Real Estate courses, and eventually just pulling the trigger on my first property purchase.

I was VERY fortunate. All of these factors had to come into play at the right time for me to succeed. Not to mention I was born in 1984, graduated college in 2007, and then fired from my corporate job in 2008. If I was born a few years earlier and things were different, maybe I would have invested in real estate at the worst time ever.

I know I am lucky, but I also know that I was willing to take the risk when others wouldn’t.

However, risk taking is easy when you are unemployed and living with your parents. It gets harder in your 30’s when you are married with 2 kids. I get this.

This is why I am very cautious when people ask me how they should get started investing in Real Estate. You can do all the homework in the world, but eventually you will have to pull the trigger.

So before you do, make sure you have the following covered:

It Must Cash Flow!

What does this mean? You should know by now, but if not here is a refresher. It should put more money into your pocket every month than it takes out.

If it doesn’t cash flow after mortgage, taxes, insurance, property manager fees and miscellaneous repairs, than it isn’t an investment. Its a liability. Even if its losing just $100 a month, you try and convince yourself its a good thing because  of  appreciation, and taxes and blah blah blah.

The problem with losing money on an investment is
A- It’s dumb to lose money on an investment
B- How many of these “investments” can you afford if its losing money every month?
C- You won’t get rich by losing money.

Which brings us to number two:

You Are Going To Use A Property Manager

I don’t care if you only own one rental property, use a property manager. If you don’t, you will never buy number 2. Trust me. I see it countless times.
Or if you end up being the exception to the rule and do purchase a second rental property, you become a full time land lord and your other income producing projects suffer or become non-existent.

You are investing in Real Estate, you are not switching job careers to property management.

Your Best Course of Action is to Purchase a Primary Residence, and then Rent It Out

The best wealth tool that everyone in America has access to is your mortgage on your primary residence.

It’s the best interest rate on any loan you can get, and its secured by real property. And you get access to a couple of these over your lifespan if you are smart about it. So be smart about it.

Don’t Quit Your Day Job

If you want to be a writer and you aren’t writing every day then you don’t really want to be a writer.

If you want to be an investor and you aren’t reading on your lunch break, listening to podcasts and audio books during your work commute, and attending seminars on the weekends, then you don’t really want to be an investor.

How will quitting your job make you a better investor? It wont.

So whats the secret to investing? Working your ass off. There is no free time. Time is money. Time is Valuable. Time is a rare asset.

Never in the history of the world has there been so many different ways to make money for anyone at any time in any country.

Before You Invest In Real Estate

Ask yourself why do you want to invest in real estate.


Ok, then read this: “Why Do I want to invest in Real Estate?”

Answer: Because I want passive income and investments.

Then ask: “Why do I want Passive Income and Investments?”

Answer: “So I have the freedom to live the life I choose!”

Lastly: “What Life would I choose if I could?”

Answer: (This is where you come up with your own answer)

Does your 3rd answer line up with question number 1? Then great! You should start investing in Real Estate ASAP!

Does your 3rd answer describe something else that has nothing to do with Real Estate investing?

Well then maybe real estate isn’t for you? I am learning that it isn’t for everyone. But that’s ok, because only 64%-68% of the American adult population historically owns real estate, and that includes the real estate boom of 2006.

Maybe what you really want is to travel the world. There are other ways to generate income that will allow for this. Maybe you can intern at an embassy in a country you want to spend time in? Don’t need to own real estate for that.

For me, real estate made a lot of sense, and still does. But we are also not in the same market we were before. This is why I also diversify into stocks and other small business opportunities.

If you plan on spending more than a couple of years in any one place, I highly recommend buying a home and renting the rooms out. If you have a family and this isn’t conceivable then I recommend buying a home and in a few years moving to another one and keeping your first as a rental.

If you can do this every 3 years imagine the position you will be in after a short decade. The time is going to pass by anyway!

Make these types of decisions as early as possible.

Or don’t. Just keep doing what you are doing and keep getting what you have been getting.

What do you think? Love this? Hate this? Let me know!

Why Tesla Will Succeed

Tesla, as a Company, is Going to Succeed:

When it comes to investing, its always important to buy with your head and not your heart. Develop your system, and invest accordingly. If you want to change your investments, refer back to your system and decide whether or not your system needs to be adjusted, updated or overhauled.

Always refer to your system before making investment decisions. Your system is your brain. You spent a lot of time developing it, so stick to it. When markets go up and when markets go down, stick to it.

As you should be aware of by now, my system involves cash flow. Not just cash flow, but continually growing my cash flow every month, so that next month I make more passive income than I did this month, every month, forever. This is my system. Even if it means buying just one more dividend paying stock this month, I am sticking to that system.


Liking a Product VS. Liking a Company

There are times where a new product may come along that you think is just fantastic. Maybe the GoPro was one of these products? Very cool product indeed, and also developed a cult following with raving fans which is very tough to do.

Its ok to buy products you like. But that doesn’t mean you should buy their company’s stock. Especially if it doesn’t follow your system. GoPro makes a great product, but if it wants to be a successful company and make money on your investment, it must overcome A LOT of hurdles.

We want to make investments into companies with as few ‘ifs’ as possible. GoPro going from successful product to a successful company has a lot ‘ifs’ in front of it, and many of those ‘ifs’ are competitors that are much larger than them already.

Tesla Will Succeed

Tesla Will Succeed

Tesla Will Succeed

What Does This Have To Do With Tesla?

Tesla is a car company. A new car company. A new car company in an age where the industry doesn’t allow for new car companies.

There are many ‘ifs’ in front of Tesla for it to succeed as a company.

But heres the catch, I really believe its going to succeed.

Tesla Chart May 7, 2015
Tesla Chart May 7, 2015

Elon Musk, CEO and Founder of Tesla just announced their latest product. A batter for the home. Tesla may not be a car company after all. It may be a battery company. It may be a batter company in an industry that definitely needs more efficient batteries.

What Really Makes Tesla Special?

Elon Musk is out to change the world. This is a very good thing, and your heart will most likely support this. But your brain should tell you that most people are lazy and change is hard. Investing in change can be expensive.

You can like the idea of renewable energy for the earth, but for your investment portfolio it has to make both sense and cents.

So what is it that makes Tesla so special? From day one, Elon Musk has marketed his products as a luxury product, and when you make a luxury product, you can make your own margins. This is not a statement meant to be cynical, its meant to point out Elon Musk’s true genius!

When you create a product for the masses, you must mass produce it as cheaply as possible and cut all possible corners. This sacrifices product integrity, and eventually brand integrity.

Tesla makes a $100,000 car. This gives it plenty of room for error when it comes to profit margins. It also allows for investment and innovation. A $100,000 car model today may be a $30,000 car model ten years from now. And there will be a new $100,000 car model ten years from now that will consist of parts and innovations not even considered today.

Now Tesla makes a $3500 home battery back. This isn’t something you need. Its something you want. People love buying things they want more than things they need. 

There is a lot of potential for a home battery. In fact, the next natural disaster that strikes I bet you will see Tesla delivering charged batteries to the stricken areas that will greatly demonstrate their potential and importance. Mark my words.

Unfortunately, I don’t hold the same views that many have that this will completely change the world. As a storage of power, I assume these are officially the best batteries on the market. But energy demand will not slow down, and the cost and demand for the raw materials needed for solar power are just not inline.

Additionally, the problem with humanity is that the more efficient things get, the more we use, the more we ‘need’.

The more fuel efficient our cars become, the more we drive.

The more battery our iPhones have the more apps we download and photos we take.

The more energy efficient our homes become, the more energy we consume. Smart thermostats? Smart refrigerators? Smart TVs?

The Future for Tesla

So what does the future hold for Tesla? No one knows for sure. If someone says they do, they are lying. But its hard to argue that the future doesn’t seem bright. First, they updated an outdated industry and forced change and reform. Then, they improved on an old product and created an entirely new marketplace that just days ago didn’t even exist.

Does this sound like another company to you?

Why Tesla Will Succeed


As of today, Tesla does not pay a dividend. It is a growth stock and growth stocks rarely pay dividends. I currently do not own any Tesla stock… but I would be lying if I said I wasn’t reviewing my investing system later today.


What did you think? Like this? Hate this? Let me know! 

How To Get Rich and Skinny in 30 Days!!! (But Not Really)

How To Get Rich and Skinny in 30 Days!!! (But Not Really)

If you want to lose weight you need to exercise more and eat less. Its really that simple. You can argue all you want about carbs, gluten free, vegan, whatever, but it really comes down to exercising more and eating less.


But people like complexity. People like to know more. People like to learn something from somewhere so that they can tell someone who hasn’t heard about it yet and say “You haven’t heard about…….????”


If you want to get rich you need to save more and spend less. Its really that simple. You can argue all you want about derivatives, option trading, IPO’s, whatever, but it really comes down to saving more and spending less.


But people like complexity… You can see where I am going I’m sure….


So why isn’t everyone rich and skinny?

We all know what we should be doing. Why don’t we do it?


Well, one reason is that we all don’t really know this. Or rather we do, but we convince ourselves it isn’t true. We argue about carbs and gluten free and then convince ourselves its too complex and difficult, and since we will never lose weight we should argue about how a “A Vegan Diet Really Isn’t Good For You” or “Running Is So Bad For Your Knees”, over a cheeseburger, large fries and a “diet” coke.


Same thing happens with your money. You are bombarded with the jargon, get rich quick schemes, “Don’t Miss Out on This Hot Stock!” articles, and of course my favorite: “Sign up now and I will teach you the Secret that Wall Street Doesn’t Want You to Know” seminars.


But really, just save more and spend less, every day, forever.


But forever is a long time.


30 Days

So why not just do it for 30 days?


Don’t budget. Budgeting sucks. Even financial experts that charge you money for their advice don’t keep budgets.


Just go one month. 30 days. Don’t do anything drastic, just spend a little less and save a little more.


Maybe cook dinner instead of going out? Or if you go out, just drink water instead of soda or alcohol. Or if you are at Starbucks, ask for a large cup of ice water instead of a bottle of water.


There are a lot of things you could do throughout the day. For 30 days.


Just spend a little less, and save a little more.


What? Does it sound too easy? Not complex enough? Well, if you want to invest in the complex stuff we can talk about that. But if you want to invest, you need to have some money. So spend a little less, and save a little more.


One Choice At A Time

By enforcing one small but positive habit that is easily manageable, you will start to notice the following:

1. Its not that hard.
2. What if I had started sooner, where would I be?
3. Your good habit muscle will get stronger, and you will expand it into other parts of your life.


Maybe spending a little less and saving a little more means going out to dinner less often. So instead you start to cook. Maybe you research some recipes and find you like cooking. Maybe you drink less alcohol and start to wake up earlier and feel more refreshed. Or maybe you go 30 days and end up fatter and in more debt.


Who knows? Its only 30 days.


Anyone can do 30 days.


Can you do 30 days?


You Don’t Need To Be An Expert To Get Started, Just Get Started

So don’t make a budget. Don’t worry about forever. Just worry about the next 30 days, one day at a time. Every time you are presented with a choice, remember your goal today is to spend a little less and save a little more. Remember, every single decision should have this goal in mind.


Just choose the option that allows you to spend just a little less. How little? Depends on how rich you want to be someday, or how soon you want to be rich.


Don’t worry about what you are going to do with the money either. Just spend less of it and save more of it.


For 30 days.


Anyone can do 30 days.


Starting today.



6 Best People to Follow On Twitter for Entrepreneurs

As most entrepreneurs can attest, if you cannot find something you are looking for in the world, it is best to create it yourself. So without much further ado, I give you my list of top Entrepreneurs and Business People that you MUST be following on Twitter.

1. Mark Cuban @mcuban

If you didn’t already know, I once greatly disliked Mark Cuban. And then I heard him speak at a conference. And then I read his book: How to Win at The Sport of Business. And then I started watching Shark Tank. And then I started following him on Twitter.
Click for Complete Mark Cuban Bio.

2. Ashton Kutcher @aplusk

Model turned Actor turned Venture Capitalist, Kutcher has financed such companies as Summly (Just bought by Yahoo! for $30 Million), Socialcam and FlipBoad. With over 14 million followers, no one does Twitter quite like Mr. Kutcher.
Click for Complete Ashton Kutcher Bio. 

3. Richard Branson

”Tie-loathing adventurer and thrill seeker, who believes in turning ideas into reality. Otherwise known as Dr Yes at Virgin.” If you only get the chance to read one Biography this summer, make it Richard Branson’s
Click for Complete Richard Branson Bio.


4. Elon Musk @elonmusk

Founder of Pay-Pal and electric car company Tesla, Mr. Musk tired of earth and started SpaceX, a privately owned space exploration company. Yes, you read that correctly. Mr. Musk has made a living (and quite a living) by literally turning dreams into reality. “Failing is an option here. If you aren’t failing then you aren’t innovating enough.”

Click for Complete Elon Musk Bio. 


5. Mark Suster @msuster

Two time entrepreneur sold both companies (second one sold to SalesForce.com) is now full-time Venture Capitalist looking to invest in the next big thing. Actively seeking out young entrepreneurs and tweeting sage advice along the way.

Click for Complete Mark Suster Bio. 


6. Skyler Irvine @skyler_irvine

Founder of CashFlowLifestyle.net , Real Estate Investor and Natural Gas advocate; Skyler is a must follow for tracking global and national trends that will impact you financially. Author of this blog, Skyler is easily accessible on Twitter and also his Facebook Page at www.facebook.com/TheCashFlowLifestyle.




Love him or hate him, he’s right:America is on sale.

This morning I came across Rich Dad Poor Dad author Robert Kiyosaki giving an interview about where he is investing his money today. Here is the link.
So where is he investing his money in today’s market? The same place he invested in yesterday’s market as well as where he will invest in tomorrow’s market. Why does he do this? Because it works. Cash flow works. Cash flow works in any market.
Oil, natural gas, real estate… does this sound familiar?
Now he has an advantage over you, don’t get me wrong. It is much more difficult for you to invest in private oil drilling projects and apartment buildings. His only advantage over you is that he started a long time ago. If you start now, eventually you can do these deals as well. Can’t afford an apartment complex? Buy a REIT today so tomorrow you can.
It is not how much you make that matters, but rather how much you keep. Find something you are good it to make your money, but then put that money to work. Buy assets that produce income. Yes, it is really that simple.
Robert Kiyosaki preaches only two things, and he has been preaching them for a long time. Get financially educated, and invest in assets that produce income. Whether you love him, or hate him he is right: America is on sale right now.


How to create your wealth system

If you ask any successful entrepreneur for help in your wealth building journey, one piece of advice you will hear a lot is the importance of building your system.


Whichever endeavor you take on, creating and evolving your system is the only way you will ever be able to maximize your time and energies efficiently.


In addition, each system must have its own specific criteria.

For example, say you want to be a real estate investor. What type of real estate do you want to invest in?


How about residential real estate? Lets say 3 bedroom 2 bath homes. Is that specific enough? No.


For a system to be self sustaining and successful, your criteria must also include

-location of investments

-maximum amount of investment

-price range

-minimum cash flow

-minimum cash on cash return

-minimum rate of return

-minimum appreciation


Over time, you will add to this criteria and it will evolve to suit your own specific needs.


Once this criteria for your investments is finalized, you can use it as an integral part of your investment search. As with all systems, this is only successful when it is used properly and consistently.


This means, if the investment doesn’t fit your criteria, you move on. It also means that you must use this system for every investment you make.

Your goal for this system is for it to become automatic.


This is because once your system is in place, you can leverage it by sharing it with your team members. With your system in place, your team can do the work because they already have the guidelines built into the system.


Your team is doing your work, following your vision and values because you built the system.


Steve Jobs built a system.


Warren Buffett Built a system.


Will their companies survive without them at the helm? If their companies follow the system they will. Warren Buffett doesn’t pick stocks with a gut feeling, his system picks his stocks for him.


It is important you start on your system today, so that when an investment comes along (and they always do!) that may sound good, you already have a system in place that will decide if it is right for you.

What are you saving for?

Have you started investing yet? How much have you invested? How much do you have saved? Do you have more saved than invested? Why?
There are myriad reasons why, I am sure. But one reason that is unacceptable is that “I don’t have enough saved to start investing.”  If this is you than you need to change your perception of what investing is. The greatest investment you can make is in your education, and that can start with a simple book from Amazon.com. The next investment you need to make is into something that makes you money. Every investment should make you money, but most people fall into the gambler’s mentality and aim for the big reward “investments” with low probability of return.
Just because your neighbor invests in stocks doesn’t mean he knows what he is doing, so you shouldn’t him for advice. Additionally, if he is your neighbor than he is most likely in the same financial situation as yourself, and your goal is to improve your financial situation, always. I recently watched the movie Wall Street 2 for the second time, and the same themes stuck out as the first time I watched it. Oliver Stone did his best job to try and demonize Wall Street, and you could argue that it wasn’t very difficult. Whether or not you have seen the movie this will not ruin it for you:
Shia LeBeouf is questioning Josh Brolin about what his “number” is. His number being the number of dollars he needs to make before he would “walk away”. The villain Josh Brolin responds with this: http://www.youtube.com/watch?v=Humfsis-QLI
If you don’t have the time to view the clip, or don’t have audio, Josh Brolin’s response is: “More.” The audience is supposed to respond with “that greedy jerk!” However, my response was “Hey, that’s my number!”
I do not believe that there is anything wrong with wanting more. In fact, it is human nature. Whether you want more money, more desert, more happiness, more time with your family, more hours in the day we are always going to want more. Its just too bad that the we are taught things such as money is the root of all evil. It is engraved in our minds at a young age that money is inherently bad. However, it is never people that have money that tell us this. Either people that were given money and lost it or never had it in the first place that seem to hate it the most. When you hate something, you subconsciously push it away from you. (Money, if you are listening I love you!)
This brings us back to the original question: What are you saving for? It is important to come to the conclusion that your investments are your savings. You need your money to work for you, and you must always have your money at work. Sometimes this may mean keeping your money in cash, but not always. It is true that cash is king, but cash can mean many things. Holding a lot of liquid assets is similar to holding cash, except for the fact that liquid assets can go up in value, pay dividends or be leveraged. Cash sits in your savings account losing value to inflation as well as tempts you with easy withdrawal access to help pay a credit card bill at the end of the month. Yes I know, you promise to pay it back out of your next paycheck, but you are not going to get rich this way. Ever.
So what’s your number? How much money do you need to “save” before you think you are ready to start investing? Unlike before, your answer better not be “more.”
For new investors looking for a little guidance, I encourage you to check out http://www.skylerirvine.com/ or you can join the discussion on our Facebook page at www.facebook.com/SkylerIrivnePLLC
Asking questions will always be free. Not asking questions can cost you millions.

What is Investing?

What Is Investing?

What is investing? It sounds like a simple question, but is it? Investing should be simple, but we have a way of complicating it.

Investing should be defined as anything you buy that makes you money. Simple, right?

Investing in stocks should NOT be confused with day trading. Investing in stocks is NOT about finding a hot stock tip.

If you are just starting out investing, you should consider companies that you plan to hold onto for at least one year. If you decide to sell after a year, at least you will be paying long term capital gains tax versus short term capital gains (less than one year) which is taxed at your ordinary income rate.

Stock Trading Is Not Investing

If you are starting out with $1000 to “play around with” you must remember that every trade (buying or selling) you do will cost you $9.99 (at e-trade brokerage). Essentially, that is 1%. So you buy $1000 worth of stock, it costs you 1%, and say it goes up and you sell; it costs you 1%. This stock needs to have gone up at least 2% to cover just your trades. In addition, you are paying ordinary income tax (say 18-23% as an estimate) on any gains on top of that.

This is where the investor joke, “They call them stock brokers because they make you broke off their stocks” comes from. Stock brokers encourage trades because they get a piece of the action like a bookie taking bets. The house always wins because they represent both sides, and also take a piece off the top.

To make money day trading, you need to be using a lot of capital. A lot of day traders use leverage (other people’s money) so that a small spread yields them a lot of profit. But also a small mistake can be VERY costly. People that make a living off of day trading can apply for a special IRS status so that they are not taxed on short term capital gains like you and I are. You need a lot of money, and to dedicate the majority of your time to qualify for this status. This is not investing. This is trading.

Investing is Necessary For Wealth

What you need to do is invest. Think of investing as your savings account, only better. When your money sits in your savings account, what happens to it? It gets eaten up. Sometimes slowly (inflation or a nice dinner) and sometimes rapidly (vacation or car repairs).

When your savings is tied up in investments, the psychological impact is great. Your brain considers the money spent. It is in another account, and is tied up in stocks. Worst case scenario, you can ALWAYS take it out if you NEEDED to. But you need to convince yourself never to do so.

Real Estate:

It is no secret that I love real estate. I love everything about it. One interesting thing about real estate that not many people know, is that you can own real estate without owning a property.


You may think that you don’t have enough money to invest yet, but you are wrong. It is all about establishing your plan, and then sticking to it. Everything I have read about real estate tells me that apartment buildings are wonderful investments. I would love to own an apartment building. But sadly, I am not in a position at this time to provide the funding to acquire one.

Instead, I found a company that owns apartment complexes throughout Southern California (very strong rental market) and is willing to sell me shares so that I can own a piece of it. In addition, this company is paying me money to own these shares. Why is that? If you don’t know then you didn’t click on the link that provides information about REITS.

Maybe you like commercial properties? Hotels? Retail? Medical? Residential? There are all kinds. Here is an alphabetical list.

The greatest thing about REITS is that you get all the benefits of owning real estate, without the hassle. I want to own an apartment still, but instead of throwing money into a savings account to save up for one, I am investing into an apartment REIT that pays me money to own it, plus will go up in value over time as inflation hits and the market recovers.

This will help me reach my goal FASTER. Investing shouldn’t be about: “I am saving up X amount of dollars, then I am going to invest in Y.”

Investing should be about: “I am going to invest in X  now, and then eventually I am going to take that and invest in Y.”

Investing For You

There are investments for everyone. Depending on your age, income, risk tolerance, whatever. There is no reason to NOT invest other than being uneducated. But everyone has the ability to fix that.

I used to believe that I had to learn enough about a topic so that I could ask an “expert” a logical question. I later learned this was not enough. Instead I would urge you to know enough on a topic to ask a logical question, and also know whether or not the “expert” just gave you a bull shit answer.

To conclude, when it comes to investing always remember Warren Buffett’s two rules of investing.
1. Never lose money.
2. Don’t forget rule number one.