Archive for the Michael Douville Category

Good Times Do Not Last Forever…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , , on October 14, 2017 by paulthepoke

MichaelLuke 12:15 Then He said to them, “Beware, and be on your guard against every form of greed; for not even when one has an abundance does his life consist of his possessions.”

A Tourist on vacation in Las Vegas can pick up the dice at the Craps Table and start a winning streak. Throwing the dice to win 5 times in a row and the casual gambler is becoming convinced the “House” will be paying for a Steak Dinner and a nice bottle of wine. Win 7 times and the Vacation is paid, 9 times and the Kids’ College can be funded, and in just a little more time, the casual gambler is now a “Pro” on his way to “breaking the House”. Just one more throw of the dice to complete “Financial Freedom”. A great Plan until it no longer works; disaster, catastrophe, an unforeseen calamity! All of the Cocktail Waitresses, Dealers, and Pit Bosses knew the streak would end; they had seen it many times before. In the Casino on Wall Street, the Dealers have seen this before; three Stock Bubbles in 20 years. Just like in Vegas, you have to know when to quit!

The signs have been there for quite a while; P/E’s over 30, Historic Margin Debt, declining Commercial and Industrial Loans, Technicals of Advance-Decline and 200 day Moving Average deterioration are signaling a tired and aging Stock Market. Further, historically, Stock Markets last about 85-90 months; this one is very old at 103 months. Just a little longer; everything is Awesome! Until it’s NOT! Greed can overcome Prudence and it is Prudent to pay attention and maybe take some Profits! The Pit Bosses and Dealers will not tell you when it is time to leave; they want your money to remain in the Casino. The true Winners know to walkaway when you are up.

The cycle for the Stocks is historically about 7.5 years; the best gains are often at the very end. Is the Trump rally signaling a potential End? Since Election Night, the Stock Market has gained 15%; almost straight up without even a pullback. Perhaps simply re-arranging assets could protect the portfolio. Accumulating assets with Cash Flow components that mitigate Economic Stress and transitioning into asset classes with longer cycles can be safer from catastrophic declines. Conservative entry level single family homes rented to credit worthy families can be a careful Strategy with consistent Income to mitigate any Economic downturn and allow one to sleep well at night (SWAN). Charts for US Real Estate project 7-9 years before the start of the cycle’s completion. Plenty of time to accumulate a strong portfolio for future profits while providing monthly Income to fund Cruises to the South Pacific or pay bills if the Business Cycle slows. Residential Rentals have a Use Factor; they are a necessity like Food, Water, and Shelter and may be a Lifeboat in an Economic Storm.

Check out our website michaeldouville.com for more blogs, videos and Michael’s new book – How To Create A Real Estate Money Machine and Retire with Income.  The first consultation is always free!

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How to Make HUGE Profits without even Trying!…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , on October 4, 2017 by paulthepoke

MichaelMatthew 16:2-3 He answered them, “When it is evening, you say, ‘It will be fair weather, for the sky is red.’ And in the morning, ‘It will be stormy today, for the sky is red and threatening.’ You know how to interpret the appearance of the sky, but you cannot interpret the signs of the times. -Jesus

Fortune 500 firms have had a few very good Quarters: sell product in Euro’s, Pounds, Yuans, Kronas, Swiss Francs, and even Rubles then convert them to US Dollars! Sheer Genius! An explosion in profitability without any improvements in Productivity, Innovation, or the time honored increases in Plants and Equipment! No additional employees are needed that would affect the profits; just devalue the US Dollar. Consider the fact that the beginning of the year, the US Dollar Index fluctuated between 102 and 103 and now is hovering around 93; a decline or devalue of 9.7% The Euro stood at 105 January 1st of this year and as of Oct 1, 2017 it is 118; a gain or strengthening of 12.3%.   What this means is Ford can sell a car for $30,000 Euros and convert to US Dollars with a Year-Over-Year gain of better than 12%: Genius! All of the multinational firms which are most if not all of them are experiencing this phenomenon! The Equity Markets are up 15% YTD, the US Dollar has devalued 12%. Could there be a Correlation? Could the decline of the dollar force the Stock Market higher? Further, Economies outside of the US receive the added bonus of Loan Repayments repaid in much cheaper Dollars discounting the Debt! Everyone wins! However, everything cycles! The US Dollar cycle IS forecast to go much lower, but buckle up and hold on, not necessarily in a straight line and not necessarily for just a few months!

The Business Cycle is getting tired and the accumulation of Debt has been Historic. In tough times or perilous times, the US Dollar becomes the currency of choice creating demand; demand will raise the price which will have the opposite affect of a declining Dollar: Markets will drop and Economies stall. The Globe would be vulnerable to a Recession, which would enhance the race to the US Dollar. Debt would become more expensive and much more difficult to service, possibly precipitating defaults of weaker entities. Once started, the completion to the Business Cycle will finish; a brutal cleansing will take place. Those that recognize the Portends and Prepare will not only survive, but have intact resources to purchase Assets that may be discounted to levels that will not be available for Generations, possibly never again.

The completion of this Business Cycle could be very scary. It could affect millions of families. Business revenues could decline precipitously; many will fail. We have been through this before and will go though it again in our lifetimes; in each case Income was paramount to survival. Further, over-leveraged, debt burdened entities were the greatest at risk; there is still time to pay debt. Although there are no guarantees in Life, Good Times do not last nor do Bad Times; this cleansing cycle will give way to incredibly better times. There are many Top Analysts that expect the Dollar to eventually cycle to new lows over the coming years, which might cause the Stock Market to explode to much higher levels and Real Assets skyrocket to new levels creating Generational Wealth.

In the Great Recession, the rental portfolio was a Lifeboat providing consistent cash flow month after month even though the general Business climate was very poor. The paper cash value declined, but the Income fluctuated well less than 10% and the vacancy factor dropped, the maintenance factor dropped, the taxes and insurance all dropped mitigating the slight decline in Rental Revenue. The current Investment Horizon is a minimum of 7 years which should be well beyond any crisis and the goal is to catch the bottom of the Dollar decline and the peak of the current Real Estate Cycle. Please consult with your advisor, but please consider re-allocating a portion of your portfolio to very conservative, residential rentals for consistent monthly Income.

Contact us at 480.948.5554 or michaeldouville0@gmail.com.  Your first consultation is always free and check out our website for more information at michaeldouville.com. Michael’s book “How to Create a Real Estate Money Machine and Retire with Income” is available on Amazon. Thank you.

 

Return OF Your Investment!…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , , on September 27, 2017 by paulthepoke

MichaelProverbs 27:12 The prudent see danger and take refuge, but the simple keep going and pay the penalty.

There are times to be Bold and times to be Cautious. Everything associated with the US Stock Market is distorted! The Stock Market has reached all time record highs, but valuations seem to be overly stretched with historically precarious P/E ratios of over 30+. Current Corporate Profits are suspect due to the liberal use of Non-GAAP accounting procedures which give enormous flexibility to Earnings. In addition, Dividends have been paid with Debt rather than Profits and the use of debt is so pervasive that Margin Debt used to leverage stock purchases is now also at Historic all-time levels and will compound and multiply any downturn in prices. Further, Central Banks have for 10 years, relentlessly pushed the Global Stock and Bond Markets higher, but now are attempting to shrink their balance sheets. The Fed is starting to sell $10 Billion a month for the 4th Quarter of 2017 and will be increasing every quarter through 2018 resulting in $510 Billion of liquidity withdrawal. Removing the constant purchasing of Equities may introduce Selling Pressure creating the unwanted opposite effect.
Trees do not grow to the sky and cycles eventually turn. There comes a time to take profits and re-distribute assets to safer allocations. In December of 2007, Charles Nenner recommended cashing out of the Stock Market and remained out until after March of 2009 avoiding the horrific sell off. He has again recommended to be out of Equities since July 1, 2017 and recommends only “Small Units” that can be rented for a portion of assets. Bill Gross who was known as the Bond King because of his stature with PIMCO, has stated he does not like Stocks and does not like Bonds believing both asset classes are extremely overvalued and risky. Mr Gross recommended Real Assets such as Gold and Real Estate in August of 2016. Real Assets versus Financial Assets are now inverse to Financials having declined for several years; they now appear to have bottomed, but have not yet turned up.
 

As shown on the chart above, a new Commodity Cycle is due to appear. There are many reasons for an increase in prices; a declining US Dollar would be a good pick. Nonetheless, these cycles come with regularity and are inverse to the Stock and Bond Markets. As copper, iron ore, gold, lumber, and land increase, typically, stocks and bonds decline as higher commodity prices are the harbinger to higher interest rates and inflation.

To be Prudent, consider an exit strategy for any precipitous decline in the Markets or Economy. Should the Commodity Cycle begin, the building components of Single Family homes typically thrive causing Capital Appreciation in addition to the consistent monthly Cash Flow and Income. Due to the Hurricane damage in Houston and Florida, Maricopa County in Arizona should be considered as a prime market for investment.

Contact us at 480.948.5554.  Your first consultation is always free and check out our website for more information at

https://michaeldouville.com/return-of-your-investment/

Thank you.

You Cannot Save Your Way to Retirement!…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , , , on September 2, 2017 by paulthepoke

MichaelProverbs 3:1-2 My son, do not forget my teaching, but let your heart keep my commandments, for length of days and years of life and peace they will add to you.

Everyone looks forward to the day you stay home when everyone else is working. A lifetime of work obligations has finally come to an end; your time now belongs to you! Unfortunately, a new set on concerns emerges: how will the bills get paid when you quit working? Will the Nest Egg last 30 years? How much is enough?

It is always a surprise to realize just how expensive Life can be. Retirement is not necessarily cheap. This is the time when dreams are realized and Cruises are booked, Flights are booked, Motor Homes bought and travel plans are made. You and your spouse have planned for years to enjoy a trouble free and worry free life. Grandchildren are visited and taken to Disneyland or Lego Land, memories are made to last forever. However, very few will enjoy their “Golden Years”.

The average baby Boomer turning 66 today has earned a Social Security payment of approximately $1404 a month. This is for someone who has forgone “Early” payments and has waited to receive the “Full Retirement” benefit. Unfortunately, most Retirees take early retirement as soon as they qualify at 62 and the monthly revenue drops to $1077 per month. Either way, most working couples can count on Social Security for well less than $2800/month; for Life! Hardly riches to fund Cruises or Motor Homes! In addition, the average “Nest Egg” is $109,000. Sorry, it needs to last a long time and annuitized, results in a monthly payment of less than $400 per month. The Government Accounting Office tracks these statistics and it is even worse than this scenario: the average Baby boomer receives less than $19,000 a year and has a net worth of less than $35,000. Further, many retirees are 100% out of money within 10-20 years of retirement. This has resulted in a record labor participation rate of 62% for workers aged 75+; retired and back to work! Saving and conserving is woefully lacking in preparing for an American Retirement. Everyone MUST invest.

There are basically 4 asset classes for the average American: Stocks, Bonds, Commodities, and Real Estate. Stocks and Bonds have done incredibly well since 2009. So well, many believe a bubble exists in both asset classes. Stocks have enjoyed a Market with virtually no corrections or downturns for years and may be extremely overdue and overvalued. Risk in the Stock Market may be much higher than many realize. An average recession results in a 39.6% loss in most portfolios; at 66, there is not time to re-build. Bonds have been calculated by Martin Armstrong to be close to a 5,000 year high with interest rates below the ancient Sumerians! Any rise in rates devastates a Bond portfolio and with rates this low, yields are likely to rise more than fall.

Commodities have been devastated and although prices seem to have stopped falling, it may be after the next recession before they recover. Real Estate is also subject to Market Declines that devastate other Asset Classes, but the Cycle length is much longer while the Cash Flow component mitigates any market turbulence. The Cash Flow is a great help during Recessions when business is struggling.

Rental homes continue to consistently provide monthly cash flow even in down turns and historically have appreciated gaining in value and monthly rental cash flow. Rental homes are perfect for Retirement planning and can be held inside retirement vehicles like Self-Directed IRA’s or can be held personally where they often offer Tax Shelter to qualified owners. Cyclically, Real Estate enjoys a long 18.5 year average duration and although corrections in an ongoing Bull Market can occur, accumulation for a cycle review in 2023/2024 could be appropriate.

It is never too late to start an Investment Program. Please review with your financial Adviser. If I or my staff can help, the first step is just to ask and the first consultation is always FREE!

https://michaeldouville.com/cannot-save-way-retirement/

 

Rule #1 – Never Rob Your Own Bank…Featuring Michael Douville

Posted in Michael Douville, Uncategorized with tags , , , , , , , on August 16, 2017 by paulthepoke

MichaelJeremiah 22:13 Woe to him who builds his house by unrighteousness, and his upper rooms by injustice, who makes his neighbor serve him for nothing and does not give him his wages.

“Willie” “Joe” and “Al” have lived their entire lives in the “Neighborhood”. Their total working career consisted of working for Semtec Steel; a company very similar to many current Companies that have promised to repay their employees for their Loyalty and Sacrifice by promising benefits for Retirement. Through bad business practice, mismanagement, and possible shady deals with Williamsburg Savings Bank, the Pension is now broke. The three are devastated and realize their feeling of Loyalty to the Company has been misplaced and NO ONE CARES! The Bank is at the center of the Default and the three Retirees decide to “get their money back” and rob the bank!

What a delight to watch acting legends Michael Cain, Alan Arkin, and Morgan Freeman portray these stunned and desperate Pensioners. Very endearing performances bring the story to life. Veteran actress Ann Margret plays the female love interest with charm and allure. Going In Style is entertaining and enlightening; well worth the time and money. Going In Style is fictional, the story is not!

 

How many workers have spent their career working for Fortune 500 companies that have gone broke and taken the Pension with them? Who can remember Pan Am, TWA, Piedmont Airlines, America West, Patriot Coal, Bethlehem Steel, LTV Steel, or the infamous Enron Energy. These were great companies; great places to work. The bankruptcy always seemed to be a surprise to the employees. However, the results were predictable; the Employee Pension went into default and benefits were either completely eliminated or greatly reduced. A complete shock and disruption to the Retirees. The pattern seems to be repeating.

Pension funds in general are enormously underfunded. States such as Illinois, California, Maine, and Connecticut, as well as municipalities like Hartford, Connecticut, Stockton or San Bernadino in California, or even Puerto Rico may renege on promises and devastate those depending on benefits. THE BENEFITS ARE NOT COMING. Many, many Fortune 500 companies have Retirement Accounts vastly underfunded. As a result the next Recession will have casualties beyond corporate Liquidations, many Pension Plans WILL default. It is time to make tough decisions.

 

Discuss options with your Financial Adviser as to early withdrawal penalties for any fixed benefits you may be entitled. Those that exit early are often the greatest winners. Cut expenses, pay down debt particularly Home Equity and credit cards. Eliminate unnecessary purchases. Build a reserve; accumulate at least 60-90 days worth of expenses in Cash; keep the Cash close and NOT in a Safe Deposit Box in any Bank! Consider taking profits on a significant portion of your Stock and Bond portfolio which might be re- deployed in cash flowing assets to mitigate any losses from Wall Street or a Benefit Plan. Entry level single family homes in the growth corridors of Florida, Houston or Dallas in Texas, or Maricopa County in Arizona should provide a safer re-allocation strategy with conservative, consistent monthly Income. Take your personal preparations very serious; these are “Interesting Times” we live in!

https://michaeldouville.com/rule-1-never-rob-bank/

Retiring Wealthy Today, Back to Work in 10 Years?…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , , on August 7, 2017 by paulthepoke

MichaelProverbs 6:6-8 Go to the ant, O sluggard, observe her ways and be wise, which, having no chief, officer or ruler, prepares her food in the summer and gathers her provision in the harvest.

Plans! So many plans are made for the “Golden Years” when the kids braces are paid, first cars have been bought, tuitions have been paid, and the Age of Retirement has been attained. The “Nest Egg” of Retirement Funds, Savings, and Social Security should last a lifetime. A Lifetime can be a long time!

The GAO (Government Accounting Office) keeps track of the Retirement Statistics and reports startling findings:

A) 52% of Americans 55 and over have NO retirement Savings.

B) 48% that have Retirement Savings have a median amount of $109,000. This annuitizes to $405 a month.

C) 50% of Baby Boomers will be out of money within 10-20 years

D) The average Baby Boomer’s net worth is $34,760 with Income of $18,932.

These terrible facts have resulted in Seniors returning to the workforce in vast numbers distorting the employment statistics. Notice who is ringing up your groceries, stocking the shelves at the hardware store, or preparing your coffee. These retirees are not in the workforce for entertainment or to pass the time, they need to pay the electric bill, buy tires for the car, and pay for their prescriptions. In 2013, 9.6 million jobs had been recovered, 7.2 million went to those over 55. The trend has accelerated. Here is a Chart of age labor participation:

Retirees are Broke! The highest participation rate for 2017 is the 75 years old and up (10 years after retirement?) with a participation rate of 62%! Failure to plan is planning to fail. Those that planned have higher risks they may know.

There are so many Red Flags and Black Swans in the Global Economy; there should be none. Recessions are the final segment of the Business Cycle and they come with regularity. It has been 9 years since 2008; the cycle may be completing. Also, the average Baby Boomer’s wealth is parked in the Stock Market; typically 70% with 20% in Bonds. The regular, average Recession causes losses in Equities of 40%. At 65, you do not have time to wait for a rebound! A Recession is coming, no one knows when. What will happen to your Dreams, your Plans, your Security if you lost 40% or more? Still feel Wealthy? Still feel Secure?

It is not necessary to consistently place your Portfolio at Risk. In times of uncertainty, consider taking profits and going to CASH with a significant portion. Speak to your Financial Adviser about an Exit Strategy if the Market turns against you. Review your debt load and monthly obligations; reduce your costs. Consider other asset classes that do not correlate with Wall Street like very conservative rental properties managed by Professionals which will provide consistent, conservative Income for a portion of your portfolio. Remember to have fun, you earned it.

https://michaeldouville.com/retiring-wealthy-today-back-work-10-years/

 

Promise Made, Promises Broken…Featuring Michael Douville

Posted in Michael Douville with tags , , , , , , on July 31, 2017 by paulthepoke

MichaelEcclesiastes 5:5 It is better not to make a promise than to make one and not keep it.

How does a City, County, State, or large Industry balance a budget or keep the P/E Ratio in Bonus range? The solution is simple: promise huge Benefits in the distant future.  Just sell the sizzle and promise a rosy future while hoping for the best; a Pension Ponzi Scheme!  Further enhance the story, with results calculated on gains that justify expectations. The Day of Reckoning was far in the future, political and executive terms would expire and someone else would be blamed. Now, Baby Boomers are retiring at the rate of 10,000 per day and are looking to collect. The Day of Reckoning is upon us!

Through mis-management, mis-allocations, possible fraud, or just bad luck, most Pensions in America are dangerously under-funded. The Capital inflows from working members are below the outflows to Retirees in an unsustainable rate.  Illinois, downgraded by both credit institutions was able to pass a budget and avoid Bond “Junk Status”. The Legislator decided to eliminate a $900 million dollar contribution to the Pension Fund! A Great Reset is coming! Those Promised are knocking at the door to collect.  How can a City Worker, Policeman, Fireman, etc., retire at 70% of their last year’s pay which was surely stuffed with all the overtime, vacation pay, and sick days possible and receive benefits payable for LIFE! Then hire a replacement at 100% pay to do the job of the retiree. Unsustainable! Unbelievable!

Pensions benefits will not be fully paid; retirees will not receive the Income they were promised.  These retirees faithfully followed the rules; their retirement was guaranteed. They paid mortgages, car loans, and schools tuition; but not IRA’s or Rental Properties. The Teamsters Mid-States Pension recently petitioned the Federal Government to reduce benefits by 60% to avoid a bankruptcy. Many retirees monthly payments were cut from $3300/month to $1300.  No Golden Years for Mid States Retirees! More dire is the Local 707 Teamsters Pension which has filed for Bankruptcy.  Reduced monthly payments are sent by the Pension Benefits Guaranty Corporation. PBGC is itself struggling under the weight of collapsed Pension Funds and may not survive.

In the next Recession, large Corporations, Cities, Municipalities, and maybe even States will be unable to service obligations. Retirees will be severely impacted. Those with “Benefits”, innocently and faithfully counting on “Others” to fulfill promises, did not personally prepare for their own future. The Retirees will be the first to be sacrificed. They did nothing wrong, they were Lambs to the Slaughter!!

There is still a little time to prepare; consult your Financial Adviser.  Review the Asset Allocation and consider placing a good portion of the funds in Real Assets; or cash flowing conservative entry level homes which will mitigate a downturn due to the consistent immediate Income component.  No longer can you trust the goodwill of others; your Destiny must be in YOUR hands!

https://michaeldouville.com/

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