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The bank...

Not the banker

I have focused on the part of "being" of the formula "BE-do-have" because without the

appropriate mentality and attitude, you may not be prepared for the major economic changes
that we now face. The "to BE" someone with the skills and the mentality of the right side of the
quad, you will be prepared to recognize the opportunities that arise from these changes and will
be ready to "do", which

will result in that you will be able to "have" financial success.

I remember a phone call I received from my father rich at the end of 1986:

"Are you in the market for real estate or in the securities market?", he asked.

"In none of the two," I replied. The world is plunged into a financial crisis.

The Tax Reform Act of 1986 essentially eliminated many omissions

in the tax laws of which depended on many people on the left side of the

Quadrant, the "E" and "A" of high income. As

a result, I felt that individuals who focused mainly on the left-hand side

of the quadrant were affected and suffered more from the financial point of view as

a result of the Tax Reform Act of 1986.

Transfer of wealth

while the people of the left-hand side were suffering, many people who

were operating in the side "D" and "I" of the quadrant were enriching, thanks to the fact that the

Government was removing some to give to others.

To change the tax code, all the reasons to invest "and cheating with taxes

" were removed for people who simply were acquiring real estate and losing money. In my
opinion, a large part of the wealth was extracted from the side "E" and "A"

of the Quadrant and handed over to the side "D" and "I", exchanging cents for dollars.

When broke the savings and loan companies - organizations that

extended the credit bad-, thousands of millions of dollars in deposits were at

1. The panic was generalized. Because people were

worried about their jobs, the fall in the price of their properties, the crack of the stock market and
the general decline in business, were not able to see the tremendous opportunities that they had
in front of them.

2. They lacked the technical skills required in the right side of the Quadrant. In the same way that
a doctor must have technical skills developed to spend years in school and then by the on-the-job
training, someone in the quadrant "D" and "I" must also possess highly specialized technical skills.
but you can purchase it by four million", most of the people in the left-hand side of the quadrant
had no idea how to raise $4 million to acquire this gift from heaven, nor knew how to distinguish
the good from the bad.

3. They lacked a money-making machine. The majority of people during that period had to work
harder to survive. During this period, the business grew from his home to count with 11 offices
around the world. The system and the people in the system were working hard.

With the extra money and free time, my wife and I were able to spend a lot of time considering

It was the best time... It was the worst time

There is another proverb that says: "What matters is not what happens in one's life, but the
meaning we give to what happens."The period between 1986 and 1996 was, for some people, the
worst time of their lives. Later in this chapter I will describe in detail how to develop the assets
that helped me to become a free person from the financial point of view. One of the keys to a
successful life and happy is to be flexible enough to react adequately to any change to it; be able
to react and get some good out
Of anything. Unfortunately, the majority of the people have not been equipped to handle the
rapid economic changes that have occurred and continue to occur.

History is repeating itself

today people have forgotten the Tax Reform Act of 1986. And in addition, your home is an asset
and should be your largest investment." In such a way that these people see the "easy monthly
payments" and become trapped in a position of greater debt. The housing market is flourishing,
people have more income available and interest rates are low. The people are buying bigger

, your mood is euphoric and are making money at the stock market because they want to get rich
quickly and have realized that they need to invest

for your retirement. Again, in my opinion, a large transfer of wealth is about to occur. The
economy changes, but history is repeating itself. Only that does not occur in the same set of
circumstances. The money continues to flow from the left to the right side of the Quadrant. It
always does. Again, we will have another great transfer of wealth from the left to the right side of
the Quadrant.

It will take at least another 12 years before they will heal the emotional scars of those who lost
money... but the wounds will heal, just as other market

closer to its highest point. At that time, people will begin to quote Yogi Berra, the great baseball

of the New York Yankees: "It is a deja vu again."

Is this a conspiracy?

I often hear people, especially on the left side of the Quadrant, which says that there is something
similar to a global conspiracy, which is held together by a few

families ultra rich that control the banks. All of them are playing this great game of money, but
each quadrant is played from a different point of view, with a

different set of rules.

The big problem is that people on the left-hand side are not able to see what the people on the
right side are doing, but the people on the right side

know what the people of the left-hand side is doing.

Witch Hunt,

many people on the left side of the quadrant, in time to find out what the

people of the right side they know and what they ignore, go to "hunt". These people often want to

blame the rich for their personal financial problems, instead of realizing that

it is often their own lack of information on the money that constitutes the

fundamental reason for their problems.

The heroes become villains

Every few years a new financial guru that seems to have the new

magic formula for wealth. At the end of the 1970s were the brothers Hunt

who tried to corner the market of la plata. Almost

overnight were persecuted as criminals because many people

lost their money due to that followed the council of the brothers. One of them is

Alan Greenspan, the Chairman of the Board of the Federal Reserve. Only

time will tell.

In each cycle of rise of the economy there are heroes and in each cycle of decline

there are villains. The people always need of witches who burn or conspiracies

to blame for their own blindness.

Be the bank... not the banker

when i was about 25 years ago I realized that the game was to be the bank,

but that did not get a job as a banker. I was beginning to train my mind to
See what my eyes could not see.

The encouraged me to learn to understand the game and then that I learned the

game, i could do what i wanted to do with what I had discovered. One of the most important

I read was The Wordly Philosophers (The Worldly Philosophers), Robert Heilbroner.

For people who want to operate on the "D" and "I", his book is required reading,

because it is about economists of all times, beginning

with Adam Smith wrote The Wealth of Nations. The Crest of the Wave (the crest of the wave of

Prechter and The Great Boom Ahead (The great boom that comes Harry Dent.

How to play the bank

after the Tax Reform Act of 1986, there were opportunities everywhere. The

real estate, stock prices and business were available at low prices.

Although it was devastating for many people in the left-hand side of the Quadrant, it was

wonderful for me because I was able to use my skills as a "D" and "I" to take

advantage of the opportunities that surrounded me.

1. Prices. Real estate prices were so low that the payments of the

mortgages were well below the value of the income of the majority of the

properties. These properties make sense from an

economic point of view... which meant that had low risk. It was like going out to

buy to the department store where everything is reduced to 50 percent.

2. Financing. The banks i would extend a loan on real

estate, but not to buy shares in the stock market. I could have bought

stocks "on margin" (when you buy "margin", provides only a

portion of the total cost and the house of brokerages lends the rest), but I was not

strong enough from the economic point of view to

risk a decline in the market.

3. Taxes. If I won a million dollars in profits of stock

, he would have had to pay about 30% of the

capital gains tax on my utilities. In real estate, however,

that $1 million could be reused tax-free in the next real

estate transaction.

4. Cash flow. The income which is not decreased in spite of the fact that real

estate prices had declined. Even though i had a very large debt, i never did harm because

incomes were greater than the cost of having the debt.

5. An opportunity to become a bank.

The real estate allowed me to become a bank, something I had always wanted to do since 1974.


Let's say that i find a house that is worth $000 100 and get an

excellent treatment and only 80 000 payment for her (an initial payment of 10 000 and a mortgage

$70000 for which I am responsible.)