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Don’t Quit Your Job. “Get Laid” Instead. It’s More Fun and Profitable

There are two schools of thought for many aspiring online entrepreneurs. One is to quit your job and focus on your business full time and the other one is to start a side business and quit once the business shows signs of viability.

Don't Quit, Get Laid Instead

I am a proponent of the later and will never tell you to quit your job to start a business. That is not always the right approach however.

There are solid arguments to be made for both approaches. The right approach for each individual is going to be different based on the individual’s personal circumstances.

If your circumstances happen to indicate that you should quit your job to work on your business, don’t quit without benefiting or profiting from your separation from your employer. Yes, it is possible to do that and I have done it before in one of my previous lives.

I am not talking about simply cashing in your unused vacation and getting the standard severance either. Sure, those are there, but what I am talking about is a much more lucrative exit strategy from your current employer, such as a full year’s living expenses for example.

I can summarize the highlights of how you can do this, but it wouldn’t be fair to my friend Sam Dogen who shared with me his new book in which he discusses several other methods to separate from your organization and profit from it that I wasn’t already aware of.

Sam is a personal finance blogger and recently wrote a book on how to engineer your layoff so that you can profit from it while maintaining a good relationship with your employer.

A Bit About the Author and Why He Wrote This Book

Sam had worked in the financial services industry since graduating college until recently when he retired at 35 to focus on his book and other initiatives. When he separated from his company, he managed to negotiate and secure a separation package to cover 6 years of living expenses. That is not a typo. I too was stunned.

I had to ask Sam about this arrangement and in our discussion he mentioned “I was happy to sign the papers if I could get 36 months worth of living expenses.  Instead, I managed to negotiate about 72-84 months worth.  That is the biggest no brainer in my mind to quit, ever.  It gives me huge breathing room, EXCLUDING all that I saved over the past 13 years to do whatever.”

Sam’s main concerns were “what if I quit and my bank account goes dry in six months?” “What if I can’t find a new job in a new industry that I really love?” “What if my entrepreneurial endeavors fail miserably and some exogenous variable knocks me out for the count?” “What if I turn into a deadbeat with no more motivation to do anything again?”

These are all valid concerns which makes it more important to secure a good separation package when leaving your employer. Sam didn’t hate his job, he just didn’t love it anymore like he once did. Many are in this situation. Many will fall into this situation down the road. And while quitting your job is not always the right decision, if you choose to do so, you want to do it while protecting your best interest.

So when Sam was ready to pull the trigger, he searched everywhere and while he found many books that talk about securing a lucrative job and making lots of money, he couldn’t find a book that talked about how to quit your job and profit from it.

My General Thoughts on Sam’s Book

I’ve read his book entirely in which he talks about several other individuals he helped, from bar tenders to folks working in Corporate America negotiate and secure several months of expenses from their employers on their way out. The book gets into the fine details explaining how exactly to do this in a step by step manner.

If you’ve been reading my blog for some time you probably have noticed that while I recommend a lot of the books I’ve read and benefited from here and there in my posts, I normally don’t write about books in this detail. In this case however, I feel that this book not only hits it out of the park, but it is also very much relevant to some of the audience of this blog.

Whether you plan to quit your job now or in the future to start a business, don’t quit like most people do and simply walk away with nothing. This book is a must read to learn how you can profit when you separate from your company while maintaining a good relation at the same time in the event you want to return back to your job or work with them in some capacity down the road. It’s never smart to burn bridges that you don’t have to.

It’s eye opening how much money companies are saving by “screwing” people off while making it seem that they are doing you a favor when they decide to end their relationship with you.

Read this article to understand exactly how, as well as why you may think you are getting a good deal when you are given a severance when in reality you are really not. A severance is chump change. The law gives you rights to much more that companies are not telling you.

What I Did Not Like About the Book

The book is lengthier than it can be due to lots of self promotion and tangent material – I felt the book could’ve been more concise, but that’s just Sam. He is very passionate about this topic and it is clearly apparent when you read the book. There is some material that is somewhat related but not critical to the book. It can be done without to make it a quicker read.

There is some philosophical talk as well that although good, could be done without. Again, that is Sam. He loves to pontificate and that also shows in the book. Not necessarily a bad thing – a reader may simply skip these parts to get to the main points.

The book includes several links that require internet connection. Though internet is mostly prevalent, there are still some circumstances where readers may read this book and feel teased because they cannot access the links immediately. Thankfully, none of the links are critical to the main message of the book which is delivered within the book’s content itself.

I felt some of the points required re reading and yet they seemed a bit difficult to understand for me. But then again, that is just my opinion. Everyone interprets material differently. The good news is that when I followed up with some questions, Sam was very responsive and provided elaborate responses that clarified my understanding.

What I Liked About the Book

I like the fact that all the research is done for you and tested as well on several professionals. As a reader, you just have to take the information and act on it. Having been through the process of separation in the past, I learned a lot of new things I didnt know already that could have made my previous separations more profitable for me.

The book is very easy to read and although longer than I think it can be, you can easily get through it. The book is very comprehensive, with lots of tangent material that you can further explore through additional links. The book is very detailed, especially the real world examples and anecdotes provided by Sam.

To summarize, the book covers four main points in great depth:

  • Know your rights and the laws in your State
  • Understand the position companies are in when they make employment decisions and how it impacts their bottom line
  • How to start the process and plant the seeds
  • How to negotiate and seal the deal

I love the one page questionnaire toward the end. This is a framework, or a matrix that has a few questions that you can answer to determine whether you are ready to quit your job. The questions provide a scoring system that will answer this difficult question for you.

This is a wonderful idea. I can’t tell you the number of aspiring entrepreneurs that have consulted with me who ask me whether they should quit their jobs or whether I feel they are ready to. While many often contemplate quitting their jobs, a lot of them do not know simply when the time is right, or whether they are ready to do so to begin with.

Just ask yourself. Do you know for sure whether you can quit your job and still be alright? You may have an inclination about it, but it is very rare that you know 101%. If you did you’d do it. This framework makes it a lot easier for you to determine the answer to that question.

Concluding Thoughts on Quitting Your Job

Knowledge is power. Don’t forget that if you quit or get fired, you are not eligible for unemployment benefits. Whatever you do, do it the smart way. Take time to invest in your education and awareness, which will help you make the most of your strategic decisions in life.

If you are going to quit, do so in a way where you receive several months of living expenses as well as healthcare coverage for you and your family. By doing so, you are eliminating a lot of the concerns people have when they want to quit their jobs and try something new like an online business.

This book really introduces a new perspective on quitting your job the right way. It is very well done and I wouldn’t be surprised if this book received significant attention and led to several other opportunities for Sam.

This is the only book out there that talks about this subject that I know of, and the message needs to be spread, especially to the community of aspiring online entrepreneurs who may have the itch to quit their jobs either now or some day down the road.

You can check out Sam’s book here.

I contacted Sam to become an affiliate of his book after having read it and loved it. I really believe this information can significantly impact anyone who puts it into practice. I’d love to answer any of your questions if you are contemplating getting this resource. Let’s continue this discussion in the comments section below.

Knowledge is Power – Equip Yourself With Power

You may be perfectly happy and successful in your career today, and that’s fantastic. I congratulate you and am happy for you. Not many can say that for their careers.

But the truth is, you don’t have full control over your current situation. Anything can happen at any time because there are just too many external variables involved beyond your control.

You can definitely wait to consume and understand the wisdom in this book until you feel like you have reached a point of pulling the trigger on your job. However, I strongly believe this is information you want to consume when you are in a stable situation, financially and mentally, so that when the right time comes you know exactly what to do and how.

When faced with challenging situations, it is not uncommon to forget things, or not fully understand the material we consume because there is already so much going in our heads. For example, I certainly didn’t need the information in this book right at this moment, but I still took the time to consume it.

I know that when faced with a situation where this information would come handy, I’d be prepared to apply it effectively. You may not need the information in this book today, but when the time comes, you want to be equipped with the right information to make the best decision for yourself and your family.

I am Giving Away ONE FREE COPY of the Book

I was able to secure ONE FREE COPY of the book to giveaway to one lucky reader ($48 value).

I’d be happy to give you a copy if you help me spread the word. Here is how:

1) Please “Like” this post on Facebook

2) Tell me in the comments section if this sounds like a helpful resource, as well as why, and how would you use it? In other words, what is it that you will work on after using this book to quit your job profitably if you ever decide to go that route?

You must do both 1 & 2. I will pick one winner randomly in a couple weeks and tell you how I did it.

One other note. The technical details in this book are specific to those in the United States. That said, the fundamental principles are universal and likely apply no matter where you live and work. In addition, many jurisdictions outside the USA have similar employment rights / programs in place that are equivalent of or similar to the ones mentioned in this book.

Happy Thanksgiving to you if you celebrate. We have some relaxation time coming up with family and friends. Not a bad time to invest in some personal and professional development. All the best to you and I’ll see you after the feast . . .

Traveling for Free on Free Airline Travel Vouchers

My wife and I traveled to see my parents last weekend and on the way back the flight was oversold. The gate agent announced a request for volunteers willing to travel on the next flight in exchange for a $300 voucher and dinner coupons to be used at the airport.  The airline oversold by 16 seats and we ended up taking the deal.

Similar to hotels and other businesses that sell services based on a fixed capacity, airlines have algorithms they engage to manage passenger flight bookings.  Each airline has a threshold, or appetite that is acceptable to it for the number of seats oversold on any given route.  The algorithm is made of a wide array of variables such as average price paid per ticket, average profit per seat/airline mile, etc.

Based on this algorithm, airlines can afford to offer some compensation for those willing to give up their seat. For us these are always exciting times because we get to travel for free. Who doesn’t want free stuff?

I have realized in my years as a professional and now an entrepreneur that no matter how much wealth one accumulates or however rich one gets, everyone is still elated when they get something for free, even if it is a $10 free lunch. It is human nature.

As for my wife and I, we travel quite a bit and we must have accumulated thousands of dollars over time in free airline travel vouchers by volunteering for such opportunities.  I know I have just accounting for my personal travels.

For example, once on my way to Las Vegas, the airline was looking for volunteers and started off by offering $350. But because not many were volunteering and the flight was badly oversold, I was eventually able to negotiate a $600 voucher plus a free hotel night at the airport along with meal vouchers.

On my way from JFK in New York to Dubai, I was offered a free international roundtrip ticket good for a year because Emirates oversold by 1 and I was the only willing volunteer. My sister lived in New York at the time so it gave me a chance to take a quick cab ride to meet her for a few hours before the next flight at night. Same thing on my way to London and Canada.

When I was employed as a consultant, I remember getting a $850 voucher for giving up my seat from Dallas to Monterey, Mexico.  Similarly, there have been many instances where either myself or both my wife and I have scored free airline travel vouchers by volunteering to take the next flight out. Traveling for free has become a bad habit 🙂

How to Travel for Free Using Free Airline Travel Vouchers

I can’t say I have deliberately planned my travel around the best opportunities to get free airline travel vouchers, but a good friend of mine has used the system very well to score free travel frequently. Frank – you know it!  Here are some ways you can deliberately plan your travel to maximize the potential for free airline travel vouchers:

Book busy flights – the most obvious way to increase your chances of getting bumped is by booking busy flights.  There are websites like FlightStats that provide all kinds of flight related information that can help you gauge while flights often sell out or are just regularly busy.  On the day of your travel, call the airline reservations department and ask them about the availability of seats.  If they say there aren’t any seats left ask if the flight is oversold, and if it is ask by how many.

Calling ahead is important because you can ensure you show up to the airport early. Upon arrival, walk up to the gate agent and volunteer before they even asking for any.  Though I have not purposely booked a busy flight, this practice has helped me score some free airline travel vouchers over my “traveling career”.

Holidays are a “gimme” – holiday time is when travel is at its busiest. Think Thanksgiving holiday, labor day weekend, etc. Airports turn into zoos and there is much chaos surrounding airline staff.  Further, airlines know this is a time they bank the dough and therefore usually tend to oversell up the wall.

Think about it, if a passenger bought a ticket for $300 8 weeks in advance, but another passenger is willing to pay $800 by booking just a week ahead of travel, the airline might sell the $800 ticket despite the sale putting it in oversold status.

Why? Because it can hope that a volunteer will accept a $300 voucher and be willing to take another flight, netting the airline more net revenue from the arbitrage.  Because flights tend to be packed during holiday season, this is a good time for someone wanting to score free airline travel vouchers by volunteering to give up their seat.

Credit card points – this is not a no brainer by any means.  If you are interested in traveling for free, look into lucrative credit card offers that award thousands of miles in exchange for meeting a certain minimum spend within X months.  I’ve written about how you can maximize credit card perks in the past, and this is one sure way of scoring free travel.

If you want a more detailed case study, read my article on how I was able to make $4,220 for free in just 2 hours from credit card points.

Some of the best promotions I can remember are British Airway’s 100,000 mile promotion and American Airline’s 75,000 mile promotion, both of which I capitalized on.  These offers are just too good to pass up at times.

Complaining – I am not suggesting you become a full time downer for airlines each time you fly, but don’t be afraid to express your concerns when faced with difficulties while traveling. Baggage issues, travel delays, cancelations, poor customer service are all just a few examples of things you can file an airline complaint about.

I write in an email complaint each time I feel the services rendered by the airline was not satisfactory as per my expectations.  Most of the time, a representative from customer service writes back with a small compensation in the form of airline miles or cash vouchers.

I am not talking about hundreds of dollars, though those have come by too, rather I am talking about 5,000 miles here, 10,000 there, or $25 here, $50 there.  These amounts add up over time. For example, Frank often searches for flights that have poor on-time departures (airlines are now required to show this when you are booking online, or you can ask on the phone if you are booking with a live agent). He then complaints about the half hour delay and usually receives some points in his frequent flier account.

In some severe cases such as baggage damage or lost luggage, you are entitled to bigger compensation amounts. But because airlines are notorious for their poor customer service or no service, you may have to take matters a step further by filing an airline complaint in small claims court.

For the amount of travel I have done over the years, I have had to take a few airlines to court on multiple occasions, each resulting in a favorable outcome for me.  Most disgruntled airline passengers don’t do this because they don’t know how the process works. Many are frustrated but also intimidated or overwhelmed and therefore often give up.

The process is actually quite easy if you have the right guidance.  Realizing this need, I packaged my knowledge of how the system works, coupled with countless personal experiences, into an eBook which I sell on my Sue the Airlines website.

Side Note for Internet Entrepreneurs: This is an example of how you can monetize your personal experiences.  The book sells on my website, ClickBank, Amazon, Barnes and Google Books.

So while I can’t say I plan out my travels specifically around the opportunity to get bumped in exchange for compensation, I have traveled thousands of miles on the airline’s dime.  Frank however has deliberately worked the system and I remember him telling me that he hadn’t paid out of pocket for travel in over two years at one point.  Isn’t that something?

Now that I think of it, neither have I – and I travel a lot, for personal and for business. Just in the last 18 months, I’ve made 3 international trips and about 30 domestic trips to visit friends, family, attend internet marketing conferences, etc.

Concluding Thoughts

We just returned back from a 6 day trip to San Francisco and the flight part of our trip was fully funded by free airline vouchers. Traveling is fun as it is for us, and travelling for free is just out of the world.

Getting free tickets is not difficult for a frequent traveler. That said, most day to day travelers travel for work and do not have the flexibility we do and therefore cannot take advantage of such offers.   Those who travel for leisure have limited vacation time and often want to maximize their holidays.

If you travel for work and were presented the opportunity to travel for free using free airline vouchers, would you do it?  CAN you do it is the more appropriate question?  Can you tell your boss the truth and get away with it if it means a free personal trip for you in the future? Many corporate policies are against such behavior.

What if you were traveling on your own time for leisure, would you do it? Have you done it? I’d love to hear your stories and tips you can share to help our readers maximize free travel opportunities.

Sunil
Traveling Free

Arbitrage – How to Use Your Mortgage as a Wealth Creation Tool

I am going to contradict what I have said in the past about my views on mortgage debt to articulate why mortgages can be leveraged as wealth creation tools through simple arbitrage.

What is arbitrage? In the simplest terms it is the shuffling of resources from a less favorable outcome to a more favorable income.  For example, buying candy for .50 cents and selling it for $1, or borrowing money at a 4% interest rate and then lending it for 6%. Sounds like what the banks do?

For a long time I believed and preached not carrying any mortgage debt on a personal residential property – in other words your home that you live in. This is still true, but that message is mainly for those who lack discipline or the financial literacy to be able to leverage alternative arbitrage opportunities.

While paying off your mortgage has its benefits, not paying it off also has a significant amount of benefits which I will discuss in this post. The reason why I am specifying the home you live in is because I have been and still am favorable toward good debt incurred to purchase investment property that you can financially benefit from over the long haul.  Investing in real estate is one of my favorite ways to generate passive income and build long term wealth.

Mortgages totally make sense if you have alternative investment opportunities.  What stops many from considering the alternatives is the risk element involved, or potential loss of capital.  While to each their own, this approach in my opinion ends up costing the homeowner not only the opportunity to make exponentially more money on their equity, but also money out of pocket when income taxes and inflation are factored into the equation.

So while many people would rather have their homes paid off and be debt free, the wealthy on the other hand consider themselves debt free based on liquidity on their balance sheets and cash flow to pay off large loans such as a mortgage anytime they wish.  They understand that mortgages are one of the best wealth creation mechanisms and one that can get them to their goal of liquidity the quickest.

Think about it, why would you tie up your cash and eliminate potential tax benefits, often yielding zero net return on equity, when you can invest your money elsewhere?

Fee Simple Mortgages

Another benefit of many mortgages is that one can simply walk away from a mortgage at anytime. Sure you will take a hit on your credit, but who cares when you have loads of liquidity? Need a house next time? No problem, just pay cash. The cash you save on a home purchase today can be invested in instruments yielding higher return on equity.

Can the authorities come after you for the mortgage debt default? Not in most cases. Most mortgage loans are fee simple loans. The lender can ding your credit, but cannot come after you personally and liquidate your assets.  The credit can be repaired in seven years if I am not mistaken. I am not suggesting you draw up your life plan based on these facts, but they are good to know.

Corporations Love to Leverage Arbitrage

Even corporations understand this is the right way to do it. Many large companies have the cash to pay off debt but they do not. They understand the power of leverage. In fact, most companies are highly leveraged! Why? They raise public debt in the form of bonds at 8% and turn around to make 15% on that money. They have it figured out.

Why can’t individuals do the same?  They can.  Those who have invested in their financial literacy can by using  mortgages as wealth creation tools.  A mortgage is not necessarily a bad thing.  It can be used as arbitrage to leverage what you don’t have and yet benefit from compounding returns on equity and tax savings.

Arbitrage Case Study

I like to visualize specific scenarios when I am learning so let’s consider the following:

Let’s say you bought an investment property worth $250,000 with a 20% down payment of $50,000.  By putting down 20%, you have full control over 100% of the asset valued at $250,000.  Highly leveraged? Yes I think.  You cannot do this in the stock market as you can trade of a 50% margin at best.

You can depreciate investment property over 27 years, in this case resulting in a $9,259 deduction per year.  If you are in the 25% tax bracket, the depreciation deduction alone would save you $2,315 in taxes, or roughly 4.6% return on $50,000 of equity.

Assuming a modest 3% appreciation of the property, you will have made an additional $7,500 or roughly 15%, which now puts you at about 19.6% return on $50,000 equity.  Say you paid off $1,500 in principal payments and generated another $2,400 ($200/month) from positive cash flow from rent, you now have an extra $3,900, roughly 7.8%, which brings the total return on equity to a nice 27.4%.

These numbers could be “bloomier” but I have maintained a relative conservative approach for demonstration purposes.

Paying Off Your Mortgage vs. Building Wealth

Let’s walk through another scenario in a slightly different example.  Let’s assume you get a $200,000 interest only mortgage at 7% on a $250,000 property. Assuming you are in the 25% tax bracket, your effective borrowing rate is 5.25%.  Your annual interest expense therefore is $10,500 or $315,000 total cost of borrowing over a 30 year span.

Can you do better by investing the $200,000 in cash elsewhere assuming you had it instead of paying off the mortgage?  Let’s have a look.

$200,000 invested at 8% compounded over 30 years yields a total interest income of $1,812,531. Assuming the same 25% tax bracket, you will have $1,359,398 in your pocket.  I know I know I am assuming an 8% compounded rate which you may have an opinion on despite what all the historical charts say.

I understand that the bitter reality can state otherwise.  That said, there are alternative opportunities for those who have invested in their financial education, such as investing in equity indexed annuities that can realistically yield 8% fixed interest on $200,000 of parked cash or investing overseas at higher risk free interest rates with the understanding there is forex and geopolitical risk.

I purposely did not factor in appreciation of property because this would equally apply to both scenarios. So what is the rush in paying off your mortgage? Would you rather pay it off early or have a few extra million in your bank account down the road?

Let’s look at this in a slightly different way.  If Person A is interested in a interest only mortgage and person B doesn’t believe in mortgages, assuming they have the same net worth today, who will come out ahead financially if both were to purchase a $250,000 property?

Person A

  • Current net worth: $250,000
  • Buys a home for $250,000
  • Pays $50,000 down
  • Takes a interest only mortgage for $200,000 at 7%
  • Invests the remaining $200,000 of net worth
  • Assets = $250,000 home
  • Liabilities = $200,000 mortgage loan
  • Investments = $200,000 at 8% interest per year

Person B

  • Current net worth: $250,000
  • Buys a home for $250,000
  • Pays $250,000
  • Assets = $250,000 home – no debt

Let’s make the following assumptions:

  • Appreciation:  4% annual appreciation on property for both homeowners
  • Tax bracket:  25% for both homeowners

Let’s have a look at where each Person stands at the end of 30 years.

Person B

  • Beginning net worth: $250,000
  • 4% annual appreciation over 30 years: $560,849
  • Current net worth: $810,849

Person A

  • Beginning net worth: $250,000
  • 4% annual appreciation over 30 years: $560,849
  • 8% ROI on investment, net of 25% tax:  $1,359,398
  • Total mortgage interest paid after 25% tax deduction / benefit:  ($315,000)
  • Mortgage payoff: ($200,000)
  • Current net worth: $1,655,247

Person A is better off by $844,398, or almost a $1 million dollars over a 30 year horizon.

Arbitrage can be so powerful that sometimes you can borrow at a higher interest rate than what you earn and still make money in the long term. Why? Because of the power of compounding. Let’s have a look how.

Say you borrowed $100,000 at 8% interest rate. Assuming you are in the 25% tax bracket, your effective borrowing cost is only 6%.  Your annual interest is therefore $6,000 or $180,000 over 30 years.

Say you are able to earn 6% return on the $100,000, this amounts to a total return of $474,349 over 30 years.  Assuming the same 25% tax bracket, you will keep $355,762 in your pocket after paying uncle Sam. Take out the interest payments of $180,000 and you will have benefited by $175,762 from this simple investment arbitrage.

WOW ? ? ?

Yes I know. The problem is that many just do not view mortgages a wealth creation tool, therefore many financial planners simply don’t include mortgages in their client’s financial strategy. I personally think it is one of the best tax advantaged strategy to create wealth.

I understand this information can take some time to digest and accept, especially if you have never been exposed to this type of an analysis.  We are just not accustomed to view mortgages under this light. Are we missing out?

Can You Still Make Money in Real Estate?

You can arbitrage your way into tons of opportunities in real estate yesterday, today and tomorrow.  It is my opinion that one can make money in real estate in any type of economy or era.  Majority of our Nation’s wealthiest have created more wealth from real estate than any other type of endeavor.

We currently have over 300 million Americans, and this number is projected to surpass 400 million by 2050, which is “just around the corner”.  The demand for real estate is likely to only increase and just like our historical past, real estate will AGAIN be the underlying basis for a heavy bulk of the wealth creation that will take place in the coming years.

I personally love real estate because of the leverage factor, the tax advantages through depreciation and what have you, potential capital gains through property value appreciation and short term cash flow resulting from rents collected.

How do I personally create wealth in real estate? Arbitrage, arbitrage, arbitrage.  You can read my approach to value investing in real estate here.

Concluding Thoughts

When the $hit hits the fan you are actually safer if you have a large mortgage balance relative to someone who has paid a lot into their property.  Why? Banks foreclose on those who have the most equity in their properties first because that is where they can recoup the most amount of their money.

How sad but true.  Those who are fully leveraged (i.e. zero down mortgages) essentially shift all the risk from their personal balance sheets to the banks.  With that said why would one put equity in their home?  Think about it, if you lose your job and don’t have the cash flow coming in any more, no bank will lend to you no matter what kind of equity you have in your home. So what good is all that equity after all? Why are you rushing to pay so fast?

Most people view paying off mortgages as the more conservative approach, but ironically it’s just the other way around. Having the cash, or liquidity to cover emergencies is what sounds more conservative to me.  I’d rather have that cash liquid.

If you are interested in running some numbers, and particularly if you are interested in real estate investing either now or later, I highly recommend two effective tools that will help you crunch the numbers such as ROI return on investment, cap rates, pro forma financials, sensitivity analysis (if/then and “what if” analysis).

These are software packages that are very reasonable in cost and ones which I highly recommend.  They are well worth their nominal cost.

http://www.realdata.com/

http://www.ianalyzerei.com/

Readers: Do you agree or disagree with me? Why? What are some of the pros and cons involved in this kind of arbitrage? Is the risk worth the return in your opinion?

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