This is another book in the Rich Dad’s series. This one targets the real estates, strongly advocated by the Rich Dad organization. Summary below:

The key tax saving strategy: component (capital) depreciation and building depreciation as a phantom deduction/cash flow. Need to qualify as a real estate professional or get a sliding scale of $25,000 deduction between $100K and $150K income.

The book went to some gory details of tax-free 1031 exchange – not very interesting. But using the IRA money through a trust company and with the title held in LLC to buy real estate was an interesting concept. The UBIT (unrelated business income tax) tax (37.5%) may be applied for the loan portion of the net income less $1K exclusion. The balance remains in IRA tax-free and accumulated tax-free.

If one runs a business, consider owning the building through an LLC for protection and tax advantage. The other three tax strategies: installment sale, incomplete contract of sale, and charitable remainder trust.

On legal strategies: homestead exemption (Florida has the best exemption), insurance, and asset protection.

4 types of ownership: 1. fee estates, 2. life estates, 3. estates at will, and 4. leasehold estates (rental: fixed-term tenancy or lease, periodic tenancy/rental, tenancy at will).

Landlord liability: duty of care (public policy), duty to inspect (for unsafe conditions), duty to disclose a dangerous condition, implied warranty of habitability.

Insurance: first line of defense.

Asset protection: LLC and limited partnerships (LP) – cannot be forced to sell the property but only with charging order (right to receive distributions from the entity). Nevada and Wyoming have the best charging order. Land trusts can be used to hold title to the property of another person (beneficiary) for that other person’s benefit.

4 ways to protect your primary residence: 1. insurance, 2. homestead exemption, 3. debt, 4. single-member LLC.

Structures for holding your real estates: personally-held (no asset protection), partnership (LP or LLC, distribution comes out at basis), S corporation (flow-through entities, distribution at fair market value, no self-employment tax), C corporation (higher capital-gain tax).

Great case studies or stories sprinkled throughout the book to make the book interesting. This book serves as a comprehensive reference book who wants to invest in real estates. Excellent book.

After reading the “Liar’s Poker,” I was anxious to read this book. It was not disappointing, in fact, the book reads like a thriller and yet it’s a real life non-fiction narrative. The scary thing is that the bad guys (the ones caused the biggest subprime mortgage failures) are still out there with the 10’s and 100’s of millions of bonus they managed to extract along the way without suffering any penalty. Doomsday machine it was. Created by Wall Street firms motivated by greed to sucker the banks and investors into purchasing all the AAA and BBB high-grade CDO’s. The rating agency, whose rating algorithm somehow got gamed by the conspirators, contributed significantly to the calamity by rating the bonds much higher than they should have been. The inefficiency of the rating agencies’ models to treat all events as a statistics and normal distribution were simply wrong and fraud. These types of Black Swan events happen more often than we thought. All it took is one or two of these events to wipe out trillions from the economy.

I remember the house bubble started around 2005 when my house was purchased by a buyer with almost zero down payment. I was shocked how easy the credit was and I knew a house bubble was in the making when a renter can easily buy a home than renting/leasing an apartment. Why the bubble lasted as long as it did was beyond me. Who are to blame? Allan Greenspan? Or just the rampant greed on Wall Street?

Unfortunately, the bad guys were not any worse off. Many banks and firms collapsed as a result. Ultimately, the victims were 10’s and 100’s of thousands of the poor who got suckered into the subprime conspiracy and lost their homes. Because of the economic collapse, millions lost their jobs and the middle class and poor will bear the tax burden of the bail outs by the government. It’s an all around disaster that hurt the majority of the people and benefit very few people.

From the book, I have learned a lot about how the asset-backed bonds (CDO = Collateralized debt obligations) work and some of the derivative vehicles (Credit default swap) used to hedge the downside of the bonds but were used to short a CDO. Also, the work of the hedge fund manager is less than glorious. The constant need to justify their actions when things are going south was as unbearable to Michael Burry as I can imagine.

The unlikely heroes (Michael Burry, Steve Eisman, and the garage-band hedge fund managers) in the story, who had the wisdom to see the stupidity of the subprime mortgage and managed to short the market with courage and determination came out very wealthy. The author did a great job in narrating several people’s stories interesting enough and simultaneously that the readers don’t get bogged down by the gory details the financial instruments and the their tradings. Michael Lewis is a master to making a seemingly mundane theme like this subprime mortgage fiasco rather interesting. And it took a master like the author to tie the story back to the Liar’s Poker with the lunch with ex-Saloman Brother boss. This is a must read for anyone who wants to know how a civilization can be brought down by just a few greedy and selfish people who know very little about what they’re doing in building a doomsday machine.

This is a simple book. It’s got the recipes to “kick start” your success. After reading the physical book the second time following the audio book, I realized there are substances to what the author is proposing. Separating out the internal and external intent helps the balance out the goal and gives it a perspective of “serving” others. I like the idea of the Success Script and asking for help and feedback. I think I just might give it a try. The summary is as follows:

Step 1: Stating your intents ( the underlying emotional foundation of your goal. It gives you the personal focus, energy, passion and commitment you need to succeed): 1. Internal (why achieving your goal is important to you) and external (shows you why achieving your goal benefits other people). Write them down: 1. Internal Intent: Why do you want to achieve this goal? What do you love about it? How will your life change once your goal is achieved? 2. External Intent: How will achieving your goal help other people? How will it benefit the company you work for, your clients, or the world? Succeed by: 1. Push guilt aside. 2. Mentally re-prioritize often. 3. Revel in the small tasks of life. 4. Know you’ll succeed.

Step 2: Obtain focus on creating your instant impact message, a brief, personal, powerful statement based on benefit that you consistently repeat to everyone you meet. Revealing the benefit behind your goal to the world and asking for help when you need it builds self-confidence. To make a direct impression. Should be 10 words or less.

Step 3: Find your voices by using your success script. Kick start law of positive words. Always speak positively about yourself and your goals. A positive attitude attracts and a negative one repels. A success script is a page of information that allows you to control the flow of conversations and keep them moving in a positive direction. 1. Write the name of your goal and your instant impact message. 2 State how you deliver the benefit you offer. 3. 3x Delivery methods and associated instant impact message. 4. Show people what you can do, and the opportunities will come knocking! List 3 people you’ll approach for testimonials. 5. Connect with others by sharing your internal intent and experience. Create you bio by first stating your internal intent and then your experience (1st, 2nd, and 3rd areas of related experience). 6. Make it very easy for people to contact and refer you.

Step 4: Triumph by becoming inter”ask”ive. State your goal using your Success Script, and near the end of the conversation always ask a specific question that you feel you need answered. 1. Become inter”ask”ive with a question of the day. 2. Continually discover information. 3. Become open to suggestions. 4. Do more than expected. 5. Set you goal and let it blossom. 6. Life on your terms, 7. Engage naysayers! a. asking for their advice. b. Demonstrating that you want to hear their ideas, c. complimenting them on their suggestions. 8. Contact – Learn – Achieve Success on your terms. a. People who have achieve success. b. experts in your neighborhood. c. friends, family, and colleagues. d. the library. e. Dream like a child, decide as an adult, and go for it! 9. The Oh, so dreaded double no. Fear provides us the energy we need to achieve the impossible. a. Go for “yes.” b. Treat every “no” as a maybe, c. Achieve the dreaded double “no.” d. Be positively relentless.

Establish a firm foundation: hold a kick start success launch party. a. Invite 4 to 6 friends and family members to your home for a Kick Start Success Launch Party. b. Use your Success Script to introduce yourself and your goal. c. State your current challenge and ask for help. d. L-I-S-Ten (List all the ideas). e. Thank everyone for coming.

Energize your spirit: Form a success team. consists of 3~4 people. What matters is their ability to listen and motivate without interfering. Meet regularly to encourage everyone involved to keep working on their goals by celebrating recent successes, maintaining focus by discussing your next goal, kick starting action by asking about your next action steps, providing contacts or resources that can expand your possibilities, motivating by sharing their experience and ideas, stating “sounds great. Keep going!”

One thing that stood out for me is how audacious his father was in setting an example of asking for help, specifically, the author got his first tricycle and bicycle because of his father’s forthright manner in asking for them, and author got his private school education because his father asked his company’s CEO for help. The rest is history. Now that’s courage!

Another that stood out for me is author’s advise in possessing the virtue of generosity and not keeping score. This counters most people’s understanding of reciprocity in networking. But I think this is really the truth. The most successful and connected people are generous and giving.

This book is a a gold mine, full of strategies, concrete steps and tips on networking. The author is a fanatic and a pretty good one at networking. Here is a summary of the book.

On Goal Setting:
1. Find your passion. “A goal is a dream with a deadline.” a. Look inside. b. Look outside. “Human ambition is like Japanese carp; they grow proportional to the size of their environment.”
2. Putting goals to paper. Relationship Action Plan: a. develop goals that will help you fulfill your mission. b. connecting those goals to the people, places things that will help you get the job done. c. find the best ways to reach out to the people who will help you accomplish your goals. Criteria for the goals: a. be specific, b. be believable, c. must be challenging and demanding.
3. Create a personal “Board of Advisers”

What you can do to be audacious: 1. Find a role model, 2. Learn to speak, 3. Get involved, 4. Get therapy, 5. Just do it.

How not to be a networking jerk: 1. Don’t schmooze: Make sure you have something to offer when you speak, and offer it with sincerity. 2. Don’t rely on the currency of gossip. 3. Don’t come to the party empty-handed. In connecting, as in blogging, you’re only as good as what you give away. 4. Don’t treat those under you poorly. In business, the food chain is transient. 5. Be transparent. People respond with trust when they know you’re dealing straight with them. 6. Don’t be efficient. Reaching to others is not a numbers game. Your goal is to make genuine connection with people you can count on.

Do your homework before meeting the persons. Do your research: on internet, public library, literature from company’s PR, and annual reports.

Take names: identify the people who can help you get to your mission.

Warming the cold calls: 1. Draft off a reference. Credibility is the first thing you want to establish in any interaction. 2. State your value. Selling is, reduced to its essence, solving another person’s problems. 3. Talk a little, say a lot. Make it quick, convenient, and definitive. 4. Offer a compromise.

Managing the gatekeeper – artfully: There are a couple of examples worth reading.

Never Eat Alone: clone the events – dine with a few people instead of one on one.

Share your passion: Your passions and the events you build around them will create deeper levels of intimacy. When your day is fueled by passion, filled with interesting people to share it with, reaching out will seem less like a challenge or a chore and more like an effortless consequence of the way you work.

Follow up or fail: Follow up the key to success in any field. Reminders to be included in your follow-ups: always express your gratitude, include an item of interest from your meeting/conversation, reaffirm whatever commitments you both made, be brief and to the point, always address the thank-you note to the person by name, use email or snail mail, timeliness is the key, follow up with those who have acted as the go-between.

Be a conference commando: 1. Help the organizer (better yet, be the organizer), 2. Listen (better yet, talk), 3. Guerrilla warfare: organize a conference within a conference. 4. Draft off a big kahuna, 5. Be an information hub, 6. Master the deep bump (quickly make contact, establish enough of connection to secure the next meeting, and move on). Get people to like you first. 7. Know your targets. 8. Breaks are no time to take a break. 9. Follow up. 10. It’s the people, to the speakers.

Connecting with connectors: 1. Restaurateurs , 2. Headhunters, 3. Lobbyists, 4. Fundraisers, 5. Public relations people. 6. Politicians, 7.Journalists.

Expanding your circle: 1. You and the person you’re sharing contacts with must be equal partners that give as much as they get. 2. You must be able to trust your partners. Not a free for all – exchanging contacts should take place around specific events, functions, or causes.

Art of Small talk: Don’t talk small. 1. Learn to power of nonverbal cues: a. hearty smile, b. good balance of eye contact. c. unfold your arms and relax, d. nod your head and lean in, e. learn to touch people. 2. Be sincere. 3. Develop conversational currency. 4. Adjust your Johari window (small window for introverted people). Envision yourself as a mirror. Tweak your style to ensure that windows remain wide open. 5. Make a graceful exit. 6. Until we meet again. 7. Learn to listen. 8. If all else fails, five words that never do. “You’re wonderful. Tell me more.”

What motivates people: 1. making money, 2. finding love, 3. changing the world. The most successful relationship builders are amalgam of financial guru, sex therapist, and all around do-gooder. Every person’s deepest life long desire is to be significant and to be recognized. Health, wealth and children gender deep emotional bonds.

Social arbitrage: a constant and open exchange of favors and intelligence. Don’t wait to be asked. Just do it. Real power comes from being indispensable. Indispensability comes from being a switchboard, parceling out as much information, contacts, and good will to as many people as possible.

Pinging – all the time. By email, phone call, and face-to-face encounter. 2 ~ 3 pings a year. Divide to 5 categories: personal, customers, prospects, important business associates, aspirational contacts.

Find anchor tenants and feed them. Anchor tenants are people who are in relation to one’s core group of friends, different, like Journalists, artists. Six to ten guests is the optimal number to invite to dinner. “Bonus guests” came before or after the dinner. Thursdays are good days for dinner. A few other rules: 1. create a theme. 2. Use invitations, 3. Don’t be a kitchen slave. 4. Create atmosphere, 5. Forget being formal, 6. Don’t seat couples together, 7. relax.

Being interesting: Be a person of content: have a unique point of view. 1. Get out in front and analyze the trends and opportunities on the cutting edge. 2. Ask seemingly stupid questions. 3. Know yourself and your talents. Not work obsessively on the skills and talents that you lack, but to focus and cultivate your strengths so that your weaknesses matter less. 4. Always learn. 5. Stay healthy. 6. Expose yourself to unusual experiences. 7. Don’t get discouraged. 8. Know the new technology. 9. Develop a niche. 10. Follow the money.

Build your brand: 1. Develop a personal branding message (PBM) 2. Package the brand. 3. Broadcast your brand. Look the part. Live the part. a. You’re your own PR representative. b. Know the media landscape, c. work the angles. d. Think small: go local first. e. Make reporter happy. f. Master the art of soundbite. g. Don’t be annoying, h. It’s all on the record, i. Trumpet the message, not the messenger, j. Treat journalist you would any other member of your network or community of friends, k. Be a name dropper. l. You’ve got to market the marketing. m. There is no limit to the ways you can go about enhancing your profile.