Predicting the future is a very hard thing to do especially when it involves investments. Calls come into my office quite regularly by people trying to sell gold, silver, stocks, and gas oil. They make claims about how wealthy you can get.

They have all kinds of voodoo evidence as to how these investments are going to take off in a short period of time.

You have probably experienced a similar situation. And the fact is no one can control the markets let alone predict with any accuracy. One thing they have is a 50% chance of getting it right. Probably better odds than what you would get at the tables in Vegas.

I can tell you right now how to predict the markets with accuracy in the next 90 days. If the Congress does not face reality rather than kick the can down the road we are going to be in serious trouble.

When you see banks that are offering 3% down that would be $4,500 on a $150K house in mid-America. The homeowner has no skin in the game. There is a high probability that they will default and we will be in the same situation that we were in 2006-2008.

You could not stay afloat if you were to run your family budget the way Congress runs the finances of the country. It is getting to the point that the country will not be able to pay interest on the national debt of $20.575 trillion.

The Huckster, in this case, is the Congress that is trying to sell us a bill of goods that is going to ruin the country over time. It is not just the present congress but many others in the past year have overspent. Last president to balance the budget

Now that charges have been made to how FICO scores are to be tabulated a credit report becomes less reliable. Credit card debt, car loans, and some mortgages have a higher rate of default. There are many HELO loans (home equity line of credit) that are coming due with an interest reset that a lot of people will not be able to afford. Debt Dilemma

What are you doing to increase your passive income? Don’t run your finances like the government. What many of you need to do is start a Roth IRA, HAS (health savings account) or a Coverdell Education Savings Account (ESA). They all have tax advantages. One place where you can get information on these programs is (I am not connected with them in any way other than I have IRA accounts with them. Not an affiliate.)

There is a gentleman I met that put $2,000 in his daughter’s ESA took a $1,000 out and bought an option on a house for $1,000 and sold the option for $15,000 which went directly in the ESA TAX-FREE. Is your child’s educational account growing?

Don’t complain do something now. Pay yourself first. Follow the example of the business philosopher Jim Rohn. Passive income will provide you independence and security.

One of the common complaints I hear is that most people have is the lack of income to provide them the standard of living they would love to have. My question usually is what are you doing to correct the issue? And the sheepish reply is Nothing. As Harry Truman used to say the Buck Stop Here. If you are not going to make an effort then I hate to tell you there is a 99.99% chance that an angel is not going to drop a bundle of cash in your lap.

Zig Ziegler use to use an old fashion farm pump to demonstrate the point that you were not going to get any water out of the pump unless you grabbed a hold of the handle and started pumping.

You are not going to create passive income unless you find a vehicle to use that will do that job. Hope will not do.

Let’s start with defining passive income. If you work at a job and the pay you receive is known as earned income. Passive income comes from investing money in a vehicle that will generate cash flow for you on a regular basis.

This time of year is interesting in that I have people who say during the year they are going to do something about creating passive income but stuff gets in the way. Yet as we get ready to finish the year it that some investors finally start making time some smart investment moves that they KNOW they should have been making a LONG TIME AGO.

Those that said they did not have time all of a sudden are making time to consider some serious financial planning and commitment of capital.

Why do some investors wait so long to get cracking on this?

They just have so much going on in their life that securing family future finances takes a back seat to everything else. They run out of time.

By the way…. it’s easy to do.

It is easy to push the can down the road because when it comes to changes:

  1. It takes time and effort
  2. It takes you out of a comfort one
  3. It is something where the results are not going to be realized until sometime in the future (for most)
  4. It is not always easy to make these decisions.

Then many ask will the change give me the results I want?

For those that Move Ahead and make the tough decisions feel good about themselves.

A bonus for many is if they have a IRA/401K their profits can grow tax sheltered.

If you want to have a continual flow of passive income you will need to constantly make changes to your plans.

Don’t procrastinate about starting a plan to create Passive Income. It takes discipline to start to keep the momentum moving. Start small if necessary but start. have questions contact me by phone (210)-807-3382 or email

In future letters we will discuss some vehicles to use and how little you need to get started.

In November, I was in San Diego to attend a Magnify Your Wealth Seminar and after the second-day session was over, Aaron Young the host took about 50 of us out on the bay late in the afternoon. I snapped this picture of the sea lions contemplating their financial future. They don’t seem to have a worry in the world.

The new tax law is pending and you will find all sorts of changes that will affect us starting the beginning of 2018. One unfortunate part of the bill does away with any further contributions to the ESA (education savings account) also known as the Coverdale education fund. What it did was allow you to put $2,000 a year of after-tax income into the fund to grow tax-free. It also allowed for this to be handed down to other generations.

I know of people put in $2,000 in 5 years ago and it grew to the point of paying their child’s education and still have money left over. And it was tax-free money.

Like the guys above many people were asleep at the switch and did not know this existed or new it and did nothing. Procrastinators seem to travel in bunches. And they are like the herd and follow one another.

Passive income is a great vehicle for providing financial freedom. Sometimes referred to as mailbox money. How much additional monthly income do you need to provide you with financial freedom?

There are many ways to generate passive income and you do not have to have a lot of money.

One way is with options. I gave a farmer $900 for an option to buy 25 acres of grazing land in return for a set price which could be exercised within 12 months. Rather than exercise the option for myself I sold the option to a cattle farmer who needed additional pasture and made $10,500 as an assignment fee. Suppose you did one of these a quarter, would that make a difference in your family’s life?

You could do this with anything. Suppose you took an option on a car that you would buy at a set price and then turn around and sell it to someone else. You would make money on what is called “the spread.” The difference between what your options were at and what the price is when you sold the car for.

Options allow you to control the ownership of an item yet not have your capital tied up. In some cases, the dollar amount that you own for the option can be very small. I have done with $10.00.

The land where Disneyland stands was acquired by options. Over a period of time, Disney through options acquired all the land at a very low price. The lawyer who acquired the option did so in names other than Disney.

Passive income can make a difference in you having the freedom to many things in life. It might be taking the kids to Disneyland or helping a friend or family member who is having a tough time financially.

Like the sea lions don’t lie around doing anything. Get up and start putting an action plan together. Get the momentum started.

The Following is by Jeff Watson a lawyer in Ohio

By Jeff Watson on Jun 30, 2015 in Uncategorized | 0 comments

I had the opportunity recently to learn from a man who challenged much of what I knew about how adults learn. Mr. Jeff Hurt was a speaker at the Mid-Year Convention hosted by National REIA in Minneapolis two weeks ago. He is a gentlemen who has studied andragogy (the method and practice of teaching adult learners; adult education) for a number of years. When Jeff was presenting, he got my complete attention with a very simple question: “If you are asking yourself if you or your organization are relevant, then you probably already know the answer, and it’s that you are not.”

One of my goals is to be relevant, whether in the things I write and share with you, or how I practice law, raise my family, or do investing. I want to make a difference and improve things, not make them worse. That’s why his question got my full attention. A better question I should be asking myself (and you should be asking yourself) regarding my business, outreach, marketing and interaction with customers, friends and family is, “How can I become more relevant?”

What does “becoming more relevant” mean to you? When I think of the word “relevant,” I think of the legal definition given under the Rules of Evidence regarding whether something is relevant and admissible in a court of law: “Evidence is relevant if: (a) it has a tendency to make a fact more or less probable than it would be without the evidence, and (b) the fact is of consequence in determining the action.”

As you can tell by reading the foregoing definition of “relevant,” it’s really not that socially relevant! Our society has changed in the way adolescents and adults process information. While a particular fact might be relevant in a courtroom, it may also bore the jury to sleep. The evidence may be relevant, but the manner in which it is introduced and admitted may be even more relevant as to the outcome.

Allow me to share with you three takeaways that I received regarding becoming more relevant:
Understand how your audience learns. How do you think your audience learns?

Package the information in a way that allows them to accept it and process it. What does “processing information” mean to you?
Remember that it is not merely giving the information, but it’s allowing the audience to experience the information, thereby learning it better. How can your audience experience the information you are sharing?

If you have some thoughts you wish to share with me regarding what becoming more relevant means to you, please do so by replying to this email.

I recently heard a recording by Jay Baer who was attending a convention put on by IBM in Las Vegas called IBM Impact @ InterConnect – 2015 Global Conference.  Jay was making the point that innovation maybe dead or sort of dead.


In today’s environment, whether or not it is in the computer technology sector or any other field, that what is going on is improvement on what already exists. And that was the point that IBM was making by holding this event. Is innovation all that important (I am not advocating that we should not innovate) or should we be squeezing more productivity out of what we already have.

I can remember as a child reading Dick Tracy in the cartoon section of the paper where Dick used his watch as a two-way radio. Now we have Apple among others coming out with computer based watches. These are improvement over Dick’s cartoon watch.

Fifty plus years ago when I was on the farm we had a 1940’s Chevy pickup truck that had an ignition with a key in it and you started it by pushing a starter button. Well it is 2015 and many of your up scale cars such as BMW have push button starters. For years it was all in one ignition key and starter.

Steve Jobs took a mobile phone and turned it into a mobile computer. He upgraded the hand-held phone into a high-tech device.

Today we have all sorts of companies selling and promoting weight loss programs and pills as a solution to our over eating. My mother would always say loosing weight is very simple “reduce your calorie intake.” So true, yet as a nation the weight loss industry is a multi-million dollar industry and growing, yet they would be put out of business if all we did was “reduce calorie intake”.


Let me hear from you is Innovation dead?


Boyd McClean


Recently I wrote an advertisement for a part-time temporary job in Craigslist and had it posted 3 weeks and received 1 response. I was very detailed in the advertisement as to the job description. Needless to say I was a little disappointed in the results.


So I decided to rewrite the advertisement in point form rather than a narrative form. The qualifications did not change only the way it was presented. In less than 24 hours I received four responces to the advertisement.

I started thinking about what occurred and learned a very good lesson in keping matters short and to the point. My fist advertisement was detailed yet when the same material was presented in point form the response was significantly greater.

How many times do we attend meetings that are long winded and very short on content of information. Last evening I attended a meeting that lasted 2 hours where the presenter covered a lot of material, yet he had a stop watch and allowed only a certain amount of time for discussion. When the time limit was reached, he cut off further discussion and moved onto the next subject matter. Not all were thrilled at his procedure, yet much was accomplished. He ended the meeting by saying that if you felt you did not have time to make your point of view, send him a followup email.

Robert McNamara a former defense secretary of the US had a policy that if wanted to convey an idea to him do so in one page only. That made a lot of people mad especially in government where shortness and clarity are not the norm. If you doubt me look at the IRS Tax Code.


For those of you who have children will agree that if you are going to give them a directive make it short or to the point, otherwise they put their head back and roll their eyes, In their mind they are thinking “Yea Dad make your point and lets move on.”

So the lesson I relearned was keep it simple, brief and to the point.

Boyd McClean

I have been hearing from many of you that have some balloon
payments coming due. May not be a problem for many of you
BUT if you have a property that may not be performing very
well along with a very cautious appraisal and lending environment
it may not be as easy as you thought to refinance your property.


If you have this problem here are the two things you do…

1. See if you can get it refinanced, no matter what the value. If the
value of the property is lower than you expected and it will not cover
the amount you owe (in terms of what the bank will lend you) then
see if the bank will still lend on the property using their loan to value.
For example. Property worth $100,000 – you owe $85,000. Bank says
yeah we will loan on that property but only $75,000 – leaving you stuck
for the other $10,000.

OK. Just see if they will lend the $75,000 and if they will go to step 2.

2. Ask the lender to take what you can get and carry the remaining amount
over time. Back to our example. If we refinance we are short $10,000 aren’t we.
Ask the lender to take the $75,000 now and carry the other $10,000 on a separate
note. Many lenders will do this because they are getting a vast majority of their
money now and can live with taking the small leftover on a time payment

OR if the above does not work then…

Ask for an extension. If you have been paying on time and have been doing
your part many times an extension will be granted. The key here is to ask for the
extension WELL enough ahead of time – before your balloon payment comes due
versus waiting until the last minute. Also ask for more time than you think you will need.


Many people get whacky when it comes to these items not working out as expected.
Just make sure you are proactive in your approach.


When I take my group of folks around and look at properties there
will be quite a few that will have owner financing as a possibility.



Many reasons actually and some you should use when you are
working on your purchases right now.

1. Rate of return. A rate of 6% – 8% on a owner carried note
or mortgage is a decent return these days compared to what
money is doing in other places. Good argument.

2. Good Argument #2. Financing With Banks. I am not kidding when I
tell you this. I have had a bank sit on one of my clients
requests for financing now over 3 months THINKING about doing
this deal. They won’t say YES or NO. Right now many lenders
are being knee jerk conservative and a project that may
have been easy to finance a year ago all of sudden may not be.
A good reason for an owner – if they truly want to sell – to
go with owner financing.

3. Capital Gains Taxes. Now when an owner sells a property on
an installment they do not get out of capital gains taxes BUT
they do get to pay the taxes as they receive the payments –
therefore paying their tax over time vs. all up front.

4. Good Cash Flow – No Management. The other good argument
here is the owner gets a monthly check – for the same amount –
month after month with no work or management at all. They just
collect payments of predictable cash flow.


Use these as your arguments in your quest for owner financing. Right now is
one of the best times to get it done!


Boyd McClean

A couple of days ago I told you the three questions you need
to be asking yourself when you purchase an apartment
property…BEFORE you purchase.

By way of review…

Are The Numbers Real and Can They Be Verified?

5 Years From Now Will This Location Be Attractive To Renters
and Possible Buyers Of This Apartment Property?

Do I Want To Be A Landlord Or An Investor? (Probably First Question).


Lets talk again in this blog about the numbers and why they are so

Remember the value of the property and the cash flow is all regulated by
the numbers. It could be the most beautiful (or ugly) property in the
city but if the numbers do not work then the property does not work
and makes no sense to own. You could have a good location and
a good tenant mix but if the numbers are out of whack you pass on
it – no matter how nice it is.


What about realistic potential? What about that?
Lets say you just got done looking at an apartment property and
the numbers do not add up. BEFORE you trash it and move on
you need to ask ONE MORE question….

Can I realistically raise rents and reduce expenses in the next 12
months? If so, what does the property look like now??


The KEY WORD HERE is REALISTICALLY! Now is not the time
to fantasize. You have to be realistic.

After this exercise it may still be a project to trash. Fine. But…
You will find that more than one project will be very, very good
and on the surface may be a dog but may be great after you
get done working on it.

So, keep this in mind as you move and look at each property.

Boyd McClean

Three questions you make sure you ask yourself when it comes to
investing in an apartment or commercial investment property….

1. Are The Numbers Real and Can They Be Verified?
2. Five Years From Now Will This Location Be Attractive To You?
3. Renters and Possible Buyers Of This Apartment Property?


Do I Want To Be A Landlord Or An Investor? (Probably First Question).

I just got done reading an article in a local paper where a guy owns
a property that is in a bad area with bad tenants (some of actually
assaulted this guy) and is not surprisingly tired of being a Landlord.
The other thing is the numbers he used when buying the property
looked good but now the property is not meeting it projections –
not even close.


I hear and see this stuff happen a lot. Our friend here is not alone.

What a huge benefit he would have had if he asked just these three
questions before he purchased this apartment project. What looked
great now becomes the nightmare.

Make sure you ask these three simple questions before you invest in
your next project.

Boyd McClean