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Rules for Asset Protection

By John Dietz - Email Editor - Editor Bio

Date : 30-Jan-2007

Dear Valued Customer:

At the time, it seemed like a great idea. …

Have you ever questioned yourself in this way?

The human condition that motivates us to make money quicker and faster also leaves us open to error. In the ever-present drive to be the first to market or to follow a trend, such as the real estate or stock market, we tend to get sloppy and ignore those voices inside that say to stop and look at the big picture.

Ask yourself some serious questions when you decide on the next business venture:

Why do I want to do this?
Does it make sense for my family?
Is it a good fit for my personality?

You could add many more bullet points to the list. In the personal arena, you may question your investment theories. If you are an entrepreneur, you may question yourself about products, services or business modules. In the beginning, all of our plans look good. When the logistics and facts are applied, our beginning concept may change, and if you are lucky, those changes may end up for the better.

Insight for Deal Makers

Every deal and every investment has its own parameters. An idea that is fragile and cannot withstand flexible demands is not a good condition for success. Concepts that are successful from inception to fruition often balance a variety of conditions rather than to depend upon just one condition. Then again, a concept that requires so many conditions to be successful is almost impossible. What I am advocating is that the decision must have balance.

Insight for Decision Making

Many times the question “should I do this deal?” comes across my desk. I find myself giving similar advice under many circumstances. When the right combinations of people come together with the same intent, then what is supposed to happen will happen. This answer is part of the solution. When you are forcing a deal or a decision, it may be time to step back and get a dose of balance and a measure of integrity. We often find it difficult to let go of our ideas because we force them on ourselves. You cannot be the person who “makes the rules” and the person “who breaks the rules.” Integrity withstands extortion and has no price; it is for reason, not for want.

Insight for Entrepreneurs

Did you ever wake up with a great idea for a product or service only to find out that six months later the very same idea ended up on the shelf of your local retailer? Someone has literally beaten you to the punch. The ability to create, design, dream, and implement new ideas and technologies is within all of us.

Insight for Investors

Look at the laissez-faire attitude society has faced in the last few years in the real estate market. The “buy now, worry later” mantras has smart people looking back and asking, “What was I thinking?” It is an amazing elixir when other people around you are getting rich. The drive and assumed monetary gain is so strong it usurps mental clarity, and the net result is an Asset Protection nightmare.

Remember When

Remember when you bought that tech stock in 1999? It seemed like a good idea. Remember when you bought gold at $850.00 the last go around? Remember the relative that borrowed 10k for what seemed to be a no lose business deal? Remember when—just recently—any piece of real estate you bought went up in value, and the rent roles well exceeded the debt service?

Insight for All

In hindsight’s you say, “What was I thinking?” The fact is none of us makes great deals all the time. I would argue that most deals are akin to major league batting averages, and the truth is all of us are very, very average. What makes the difference is the entrance strategy, meaning, what is the reason and purpose for doing what you are doing and why are you making this decision? Next is the exit strategy, meaning, how do I get out of this deal when and where I want in any market conditions.

The only difference between super success and average is the super successful cut their losses and let the winners run. Last year nationwide housing foreclosures were up over 37 percent year over year. We may have seen the last of the real estate bottom. You never know. It could get worse. Do you have an exit strategy? In fact, what was your reason to get into that piece of real estate in first place?

Having a good idea and putting your plans on the fast track must include a sizable reason to get into the venture, and it must have an absolute way to exit with your proverbial shorts.

THOSE ARE THE RULES OF ASSET PROTECTION!

Until next time,

John

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