Extreme Wealth

Jordan Goodman

• Introduction
• Jordan Goodman

Introduction

Presenter: So, our next presenter is pretty neat. I’ve actually had the chance to kind of hang out with him a little bit over the last couple of days because he’s been here. You saw him up on the panel. How many of you feel like you know every trick of the trade as far as investing goes? After three days you guys don’t? Well, our next guest is known as the Money Answer Man. The Money what? The Money who?

Audience: Answer Man!

Presenter: The Money Answer Man, and he’s been doing this for over 20 to 30 years now. He’s a published author. He’s written 12 books. His newest book is coming out in just a couple of days, Ten Strategies on How to Make You Rich in Any, what’s the word?

Audience: Any!

Presenter: In Any Economy. Whether it’s going up or going down, he’s gonna show you how to make some money. Now, this guy’s pretty smart. He’s so smart…

Audience: How smart is he?

Presenter: Some of you guys are pretty sharp. The rest of you, umm. This guy is so smart…

Audience: How smart is he?

Presenter: He wrote his own dictionary. His own dictionary. How about that? The Dictionary of Finance and Investment Terms. How many of you have written your own dictionary? Alright, so you might have something to learn from this gentleman. He’s here to answer all of your questions about finances, help teach you where to invest no matter what the economy, no matter what the market is. Please, help me give a huge welcome for Mr. Jordan Goodman!

Jordan Goodman: Alright.

Presenter: Thank you.

Jordan Goodman: Okay.

Presenter: Very good.

Jordan Goodman

Jordan Goodman: Thank you! Alright! Here we go! So, the last speaker. Are you guys ready to make a lot of money?

Audience: Yes!

Jordan Goodman: Would you mind if I gave you an income of 10% guaranteed, and if oil prices go up, you’ll double your money? Yes?

Audience: Yes!

Jordan Goodman: Would you mind if I cut your health care costs in half?

Audience: Yes!

Jordan Goodman: You would mind? Oh. That was a trick question. Would you mind if I gave you a mortgage where it only went down, never up?

Audience: No!

Jordan Goodman: No, you wouldn’t mind. That's good. So I’m gonna give you all of what I’ve got in every resource of every aspect of personal finance. Is that good?

Audience: Yes!

Jordan Goodman: So, I’m gonna warn you upfront, paper and pencil, okay? I’m gonna give you more resources in the time I’ve got with you than all the rest of the speakers combined. And you’re gonna be amazed at some of these things you never knew existed, and I’m gonna give you 800 numbers, websites, resources of all kinds, and you’re gonna say, “That's just impossible.” Alright? So you were warned.

At the end of these things, people’s hands are usually kind of bloody because they’ve been taking so many notes. Alright. We are gonna bring it on. And also, by the way, I’m glad to take questions as we go along. I’ve got plenty of time, and so with some of these things you might have questions. We’re gonna have some mic runners, so I am willing to take questions, you know, as long as it doesn’t get out of hand in the middle of all this. Alright? Alright.

The first part I wanna talk about is the investing side, and the second part—you see, I have 20 money secrets. The first 10 are kind of on the investing side. The second 10 are not really investing. They’re making the most of your money in every other way possible. Alright? Here we go. So, you ready to make money in hard times?

Audience: Yes!

Jordan Goodman: Are we in hard times?

Audience: Yes!

Jordan Goodman: Are they gonna get harder?

Audience: Yes!

Jordan Goodman: Are you gonna make more money when they’re harder?

Audience: Yes!

Jordan Goodman: Alright. You got the idea. Number One: Tax Liens and Deeds. Okay, now, some of you may have heard of some of these things, some may not have heard of these things, but basically what happens with the tax lien and deed is when somebody does not pay their property taxes the local municipality puts a lien on your property, and depending on the locality, they have a mandated penalty interest rate which can be as low as 9% and as high as 25%.

For example, in Texas it’s at typically 25%. And so when the homeowner does pay their taxes and catches up with it, they have to pay that penalty interest rate which you as the owner of the lien get to receive. Now, you are not collecting it from the homeowner who didn’t pay the taxes. You get it from the municipality.

So that's the worst thing that can happen, is you get 9% to 25%. The best thing that can happen is they don’t pay their property taxes at all, and then you get to buy their house for the property taxes. Okay. So, you have a house that's worth 200,000, 300,000, 500,000, 700,000, whatever it may be that you just bought for 3000, 6000, whatever the property taxes may be. Okay?

So, now you bought a house that's worth 700,000 for 10,000, whatever it may be. Now, it’s a tough real estate market, so say you’re willing to discount the house to 500,000. You still make like 20 times your money. It’s not a bad thing.

Audience: What about the bank of the mortgage?

Jordan Goodman: The bank of the mortgage? Okay. Now, in many cases, there is a bank in the middle, and in that case you would get your penalty interest rate and you would not get to buy the house. But sometimes, things happen. For example, I’ll tell you the story of somebody I knew in Oklahoma, and there was a bank in the middle. Somebody bought the lien for I think it was $3000 dollars. The house was worth about 300,000. There was a mortgage on the property, and the mortgage was made by a small local bank.

And it turned out that during the time, that small bank was being taken over by a big bank, and after the homeowner says he's not gonna pay his taxes and the home is gonna be sold, the bank has 60 days to, in effect, foreclose on it. And so what happened was the little bank thought it was the responsibility of the big bank, and the big bank thought it was the responsibility of the little bank, and 60 days passed, nothing happened, and the guy got to buy the house for $3000 that was worth $300,000.

So, may banks be inefficient, right? So it doesn’t always happen, and I would say about 1 in 20 times you’re going to actually get to buy the house. So if you bought a whole bunch of tax liens and deeds, you’re going to have a better chance of kind of hitting these homeruns. But meanwhile, you’re earning 9% to 25% with basically no risk, with the municipality behind you. Alright? So that's basically what works. So what’s happening right now is there's a huge amount of tax liens and deeds out there. Because of all the hard times, the amount you have to choose from is just staggering.

Now, you have to be careful which kind of tax lien and deed you get. You want something that's actually a house or something that's saleable. Sometimes, you’ll a get lien on a railroad track or something or a toxic waste dump or something that's not exactly gonna be saleable. So it’s good to know what you’re getting involved with. But if those are good-quality properties, you could go in and what you do is you bid on these things, and you can either do it in person at these auctions or, in many cases, you can do it online as well.

So in the book, I actually give you some specific resources, websites, where you could actually learn about this stuff and bid online for these tax liens and deeds. Alright? So you see how this is a way to benefit when the economy goes down? You actually have more to choose from. That good for number one?

Audience: Yes!

Jordan Goodman: Alright. Liens and deeds are listed by the county. As people do not pay their taxes, they have a list, and they have an auction. Next Thursday, these are all the people who didn’t pay their property taxes, and they have an auction. In some cases, you may be the only one to show up at the auction. In general, the ones with the highest interest rates, like Texas, is where you have more people showing up. But some people, like Missouri I think is 9%, you show up and like you’re the only one in the courthouse, “I’ll take this one, this one, this one.” There's nobody competing against you.

Now, in some cases what happens, if there's a lot of competition, what you do is you bid down the interest rate. It’ll start at 25%. If there are tons of people who want it, it’ll go to 24, 23, and it’s sold at 17%. So, there's a reason why that rate is high. It attracts a lot of investors. Alright? But you can, again, do this online. You can do this from home. You don’t have to actually show up at the auction. Alright, so that's number one.

Go ahead. Can we get the mics up here? Because we’re getting some questions, we want everybody to hear the questions. We have a question right here. Let's just get you the mic. Yup. Stand up and speak. Yes, go ahead.

Audience: Are your strategies applicable in Canada and the United States?

Jordan Goodman: Yes. Absolutely. And I’m gonna tell you, some things are not in Canada, but most of them are, and Canadians can buy tax liens and deeds. No problem whatsoever. Absolutely. Okay. Number one. Got a question over here? Go ahead.

Audience: I’m just curious. If you have the deed to a property, aren’t you assuming all the liabilities of the property as well?

Jordan Goodman: Well, you are, but I mean the mortgage would have been taken out at that point. But the liabilities I’m worried are like it was a gas station and you’re gonna get the EPA wanting you to clean up a toxic waste dump, that kind of thing. But yeah, you get to own the full property for the amount of the property taxes that you paid.

Audience: But ultimately, you are responsible for whatever the deal happens to be?

Jordan Goodman: That's right.

Audience: Thank you.

Jordan Goodman: But I mean, typically, what people will do, and this again can be done remotely. I mean, you can be in New York and buy tax liens in Arizona or whatever. Typically, what people do is they buy the house if that happens, and then get a local real estate agent to sell it for them. So you have huge leverage in, you know, if you bought it for 3000 or 6000, and the thing is worth 300,000, you can come down a lot, underprice the market and still sell it for huge, huge profits. Any question over here? No. Okay. Alright. On the go. So that's number one.

Number Two: Buy Below-Market-Value Real Estate. Several different ways. And some of the speakers before have talked about this, but just to go over these again. Pre-foreclosures is one way to do it. Now, this is where somebody isn’t in foreclosure yet, but they are heading in that direction and they are very willing to deal. This is a desperate seller who is willing to do all kinds of things to help you get the house, and in many cases not even take financing back.

So there’s all kinds of ways of getting pre-foreclosures. Again, the idea is you’re getting real estate way below market value, and you can then sell it at market value, even a little bit below market value, but still make lots of money because you’ve got a desperate seller, and boy are there a lot of pre-foreclosures out there today.

The second way is actual foreclosures. Now, here’s where you go to a foreclosure auction and bid on it. A lot people doing this these days, but there's plenty of foreclosures to go around and many more to come. Just to give you a little background why this is happening. The whole subprime mortgage has blown up. This is what the whole situation is.

People got into these mortgages at way below market rates, 2, 3, 4, 5%, and it would be great, and then in three years it’ll adjust up to the market. Well, three years has arrived now that we’re in 2007. So people’s mortgages are adjusting up to 6, 7, 8, 9%, their payments are doubling, and they just cannot afford those higher rates, and so that's why they’re going into delinquency.

The foreclosure rate is now double what it was a year ago, and in some states it’s much, much higher than that. So there's gonna be tons of foreclosures that you’ll be able to take advantage of. So it’s not taking advantage of somebody, they lost their home, but you are able to buy it way below market and then sell it at a market level.

The next one are so-called bank-owned real estate or real estate owned, REOs, and this is where the bank has foreclosed on it and the bank wants to get rid of the property. They do not like being in the real estate business, and there's tons of real estate that the banks now own that they’re willing to sell and make all kinds of incredible deals.

In fact, I’ve been talking to several people who’ve said they’ve been buying bank REOs, and the bank had it listed for 113,000 and they bought it for 60,000 or some incredibly—because the banks wanna get the stuff off their balance sheet. So again, the banks, you can go to banks, I give you a whole system of how you do it, but you can do terrifically getting high-quality real estate at way below market prices by buying it directly from the banks that have already foreclosed these properties.

Question over here. Let's get the mic over there.

Audience: If you’re buying a foreclosure, don’t you have to do cash?

Jordan Goodman: Typically, you do have to do cash or have a certified check available. That's correct. Because they’re not gonna finance you at a foreclosure auction. That's correct. Good idea but I don’t think they’re gonna do it. Question over here. Mic. Just stand up so everybody can hear the question.

Audience: Hi. My experience has been that when you get a loan, they sell it out in the market. So, which banks are the banks that are holding most of the notes?

Jordan Goodman: Well, you’re right. What happens with mortgages is they have been taking the mortgages and selling them to mortgage-backed securities, and then that's being sold to investors around the world. The problem has been when there are foreclosures, those foreclosures and the losses go to the investors around the world, which is what’s been happening.

That's why banks in Germany and Spain and Australia have been blowing up, because they’ve been having huge amounts of these mortgage-backed securities. So that has been a problem. So the result of that is banks are now not willing to make loans over the levels set by Fannie Mae and Freddie Mac, which is 419,000, because they’re not able to sell it to mortgage-backed securities.

That's why Merrill Lynch took an 8.4-billion-dollar loss. That's why Citibank is gonna take an 11-billion-dollar loss. UBS, 3 billion. All of these because they have these mortgage-backed securities that have fallen so dramatically in value. So it’s really changed. In the old days, a bank would make a mortgage and actually hold onto it. Go ahead.

Audience: So they’re not sitting in your hometown banks, typically.

Jordan Goodman: Correct. What’s happened is the mortgage-backed securities market, mortgages are originated locally and then sold into mortgage-backed securities that are then sold to investors all over the world. So who owns—well, I mean in a case like that, the mortgage-backed security ultimately is gonna be where the pain is being felt. So you’ll have a local bank that is originating it and kind of administering the loan, and they’re the ones who are gonna do the foreclosures and so on.

But the difference in the market now is they’ve been sold to these mortgage-backed securities and spread all over the world, whereas in the past, like for example during the savings and loans crisis in the late ‘80s and early ‘90s, it was the local banks that got hurt, and they went under because they were holding the securities that went under. Now, it’s diversified all over the world.

Audience: So the idea of going to your local banks or the banks in your area, they probably won’t have the loans?

Jordan Goodman: Some will, some will not, but there's plenty of—I actually have some resources in the book that kind of gives you exactly where to find it, but in many cases, the local banks, there are so many foreclosures out there and REOs. There's plenty to go around, believe me. Your local banks will have plenty.

Audience: Thank you.

Jordan Goodman: Sure. Thank you. Okay the next one is probate property. Now, this is when somebody dies, typically their house is gonna pass to their kids and their kids typically aren’t there, they’re off somewhere else. So the kids typically want to cash in the house, and you can buy that real estate usually at way below market value out of probate.

And so, say the house is worth, whatever, 300,000, and the family bought it 30 years ago for 50,000, whatever it may be, and the kids wanna get rid of it. So they won’t sell for 300,000, they’ll sell it for 250,000, whatever it is, for them. They just wanna get this out of their—they wanna cash in the asset in effect. That's a way of getting really high-quality real estate at way below market prices. The whole idea is to get below-market-value real estate, and probate is certainly a way to do it.

And then the last one is FSBO, for sale by owner. What you want, and there's plenty of them out there, are desperate sellers. And people who, what we just talked about, not even pre-foreclosure, but they’ve got these mortgages where they’re adjusting up and they’re really getting hurt. They in many cases wanna sell.

All kinds of reasons why people wanna sell: Divorce, financial hardship of various types. And you approach these homeowners, and then you’re trying to help them out out of their situation, and the result is they’re willing to give back financing, give you great deals on the house. And if you get it below market value, when you sell it at market value, even a little bit less, you can make yourself lots of money in real estate. Question over here. Let's get the mic over there.

Audience: You know how we got a benefit from the hard times? I’m a little worried about taking, like I heard in the panel when Greg had the graduates doing land trust, putting the properties on your name, and like, let's say there's a house that’s worth 300,000 and the sellers are desperate, and you just, “Okay, I’ll take over a hundred thousand dollars and see you later.” I’m worried about getting sued left and right.

Jordan Goodman: Well, you wanna make sure, do a title search. I mean, make sure that it’s a clean property and that there's no environmental problems. I mean, you wanna do some investigation and due diligence before you buy the thing.

Audience: Getting sued by the owners, like if you’re gonna help them and you’re gonna make like a hundred thousand dollars.

Jordan Goodman: This is all done by contract. Remember that the people who are selling you the real estate in general are gonna be desperate, and you are their savior. You are helping them. You’re not stealing their property. They wanna get out of their house one way or the other. I mean, this is just happening all over the country with people with subprime mortgages, all the things we talked about, the real estate owned at banks, the probate. You are helping the seller get out of the situation and you profit from it.

Audience: So just do a nice contract and that's it, right?

Jordan Goodman: It all has to be done under contract. Absolutely. And I’ve got some things actually in the book where I show you where to get all the contracts. All this paperwork is done in advance. You don’t have to start from scratch on this kind of stuff.

Audience: Okay.

Jordan Goodman: Alright? So there's loads of ways today, and again, as the times get harder, there's gonna be more and more great real estate deals out there. Sounds good? Alright. Want another one?

Audience: Yes!

Jordan Goodman: Alright. Number Three: Oil and Gas Investments. I saw today that oil was up to $96 a barrel on the markets. It’s going up to a hundred maybe by Christmas, maybe next week, something like that. I mean, just briefly, the reason that oil and gas is going up, oil particularly, is there's a basic supply-demand imbalance for oil in the world. Supply has been coming down because the oil fields have been getting exhausted.

Cantarell in Mexico is producing 50% of what it was three years ago. Even the Ghawar Field, which is the big one in Saudi Arabia, they have to now pump 20 gallons of water in to get the oil out, whereas it used to be like 1 gallon. So the big fields of the world are in general being exhausted, and meanwhile, the demand is going up dramatically, not only in the US.

We still buy and run these SUVs, and we talk about energy efficiency but we don’t live it in many cases. And China, everybody that switches from a bicycle to a car, is now long-term demand for oil. They’re moving into factories and office buildings and apartment buildings. This is all creating huge energy demand, and China’s growing at about 11% a year. Same is true in India, in Indonesia. The whole third world is just using more and more oil.

So, oil demand is going up, oil supply is stagnant or coming down to some extent, and that's why oil prices are going up. And on top of that you the speculative aspect that these futures traders, if they see something going up, they’re gonna jump in like crazy, so it makes it go up even faster because that's what’s been happening lately.

So the idea is that even in hard times, I mean it seems strange, doesn’t, that the economy is going down yet oil prices are going up, and I think that's gonna continue to happen. So, here are some ways to play that. There are so-called income trusts that have yields of between 8 and 12%. Now, that's double, sometimes triple, what you’re earning at a money market fund or CD or something like that.

They typically are in Canada. There's about 50 or 60 of them right now, really high-quality income trusts. They own existing reserves of oil and gas, typically 20 or 30 years worth of oil. They’re not exploring for new oil. They’ve already found the oil. They pump the oil out, and gas, and then sell it and give very, very high dividend yields.

Now, typically they pay their dividends monthly. Most companies are quarterly, but these guys actually pay it monthly. So it’s a way of getting passive income on a monthly basis, annualized comes to 8 to as much as 12%. This sound good? Okay. Now, in addition to that, when oil prices go up, the stock prices go up as well, so you get capital appreciation and double or triple the income you’re getting with a money market fund or CD of some kind. Alright?

So let me give you some examples. Provident Energy trusts, symbol for that is PVX. I first started talking about that on radio shows when it was about 6. It’s now about 13, and still yielding about 11% today. Another one’s called Pengrowth Energy, PGH. That's yielding about 11% now, something like that. Another one’s called Penn West Energy, PWE, which is a large one that actually just bought another one called Harvest Energy.

Now, there was something that happened about a year ago in Canada which affected these things, and I want you to be clear about that. What used to happen until, it was actually a Halloween night 2006, is these were not taxed at the corporate level, and so all the income they would distribute to would be taxed at the dividend level but not at the corporate level.

And so this became extremely popular in Canada, and companies that were not oil and gas were converting to income trust status like crazy. And when two of the biggest companies in Canada, BCE, Bell Canada, and Telus, the two big phone companies, said, “We’re gonna become income trust, too,” the government kind of freaked out and said, “Oh boy, we’re gonna lose all of our corporations. They’re all gonna become income trusts and we’re not gonna have any tax revenue.”

Now, the conservative government that had been elected I think in May in Canada had specifically and explicitly said in their campaign they are never going to tax income trusts at the corporate level. Okay? And that's what everybody thought, and literally on Halloween night, as all the investment bankers were out trick or treating with their kids, they said, “We changed our mind. We’re gonna tax them.”

This was a complete and total shock to the marketplace, and income trust fell by about 20 to 25% the next day because nobody had expected this whatsoever. And so that in fact has happened, that is going to go into effect starting in 2011. So in 2011, income trusts are gonna be paying taxes in Canada at the corporate level, which will lower the dividend yields to some extent. But what’s happened is, when the income trust dropped, everything else was the same.

In fact, oil prices had gone up, and in fact, there had been a huge amount of takeovers in this area, over 20 takeovers of income trusts in the last year, because the values of these things were way below market value. And of course, the yields went up. if they’re paying the same dividend yields and the stock price goes down, what used to be a 10% yield now became like a 13% yield.

So if you’re buying it today after the fall, in effect, I think there's huge potential upside. So, Harvest Energy, they’re just one after another that's been taken over. In fact, one of the big ones, Primewest Energy, was just taken over by the government of Abu Dhabi for about $5 billion. I’ve had that one for a long time. I got it at about 16. It was taken over at 26, so I made $10 a share on the investment, and I’ve been earning 11% yields being paid monthly on top of that.

So, yes, they are gonna be taxed at the corporate level starting 2011, but I still think they are a terrific way, and then the prices go up with oil and gas prices, and they also raise their dividends. When you have oil and gas prices going up, remember they’re paying monthly, they actually raise their dividends as well. There's a question over here.

Audience: Are these symbols on Toronto or New York?

Jordan Goodman: These are New York symbols, but it’s actually pretty much the same symbol but you just like put T in front of it in Toronto. T.PVX, that kind of thing. Alright? So, now, these are three examples. There are loads of them, and actually in the Fast Profits in Hard Times book, I list the 30 largest ones and give you the stock symbols and what they invest in and the address of them and all the details about them. But these are just three examples to kind of get you started, alright? Have you heard of these before? Great. Alright.

Okay, the next one is kind of similar. It’s kind of an American version of these and are called Master Limited Partnerships or MLPs. What these are is they’re taking existing oil and gas properties, rolling them up into what’s called an MLP, and they are not taxed at the corporate level, and then they pay out income yields of somewhere from 6 to 10%, something like that.

Now, actually there have been several income trusts that have become MLPs. In fact, Provident Energy, I mentioned here, has been become an MLP or is going to do that. So it’s a way of them avoiding taxation at the Canadian level. They become a U.S. MLP. So it’s the same kind of thing, and you can not only get them directly but there are mutual funds that give you a broad diversified portfolio of either MLPs or income trusts. So I mention in the book all of the different names and phone numbers of all these. Two examples of some good MLPs was one called Enbridge, which is EEP, and Magellan Midstream Partners, MMP.

Now, typically what the Master Limited Partnerships do is a very, very stable business, which is pipelines. Now, the income trusts are going up and down with oil prices, in general up, but pipelines have long-term contracts to transport oil and gas, and it really doesn’t even matter what the price of oil and gas is as long as the contracts are in place. So they tend to be much more stable, and it’s a way of getting much higher income than certainly what you’re getting on a CD or money market fund.

And money markets are gonna be going down. The Federal Reserve has been lowering interest rates and you’re gonna be seeing the yields which might be 4-1/2%, go down to 4, to 3-1/2, and so on. It’s gonna be very similar to what happened after 2001 when the Fed lowered interest rates to try to save the economy. So this is the way we’re actually gonna have yields going up and the stock prices going up as opposed to other kind of safe investments where their yields are gonna be going down. Alright? Any questions about that? Over here?

Audience: Hi. Isn’t one of the dangers of income trusts that are energy-based that it’s a depleting resource?

Jordan Goodman: It is a depleting resource except they keep buying new reserves. So, because of the cash flow they have from oil at $95 a barrel, they’ve got plenty of cash to go out and buy new reserves. Before you buy one, I mean the three I mentioned are very, very solid, you wanna see what kind of reserves they have, and they’ll put right in their year-end reports how many years of life they have yet. So that is correct. You wanna make sure that they have good-quality reserves. But in general, they’ve been buying reserves and they’ve got plenty, plenty of years to have these. Correct. Alright? Okay, so that was number—we have a question over here?

Audience: More of a comment than a question. A lot of the income trusts, they do buy replacement reserves, but a number of them don’t replace their reserves as fast as they deplete them, so be really careful and look at the sheet because you may get yourself into a trust that pays a really good dividend, pays a really good yield…

Jordan Goodman: But it’s depleting its assets, correct. I agree.

Audience: …but it’s actually depleting its assets, and then what happens is the stock depletes and you end up losing all of your capital even though you got the yield.

Jordan Goodman: So there's something called the replacement ratio, and in these statements it’ll say what percent of the assets we replaced each year. And typically they’re buying assets, sometimes exploring, but typically buying assets. That's one of the reasons why they’ve had a lot of takeovers in these fields. So that's correct. You don’t want something that's just depleting its assets down but is constantly replacing its assets. That's correct. Thank you. Okay, so that's Number Three. Was that one good?

Audience: Yes!

Jordan Goodman: Alright. Wanna make more money?

Audience: Yes!

Jordan Goodman: Alright. Just wanna make sure. Alright. There are other high dividend stocks, and I consider a high dividend stock anything yielding 5% or higher, and I’ll just give you some other examples of this. Oil tanker stocks. Two examples of that would be Frontline, FRO, and Double Hull Tankers, DHT. Now, what Double Hull does is they have all these tankers that obviously have double hulls, and this came in after the Exxon Valdez hit. They had single hulls, and you hit a rock and you destroy half of Alaska, so that wasn’t very good.

So now, there are more regulations coming in. The tankers have to be double hull, so if they run aground they don’t spill oil all over the place. So in fact, it takes a long time to build a tanker, like five years. If you were to order a tanker today, you may get it in 2012. So, in effect, they have a monopoly on this. There is not a lot of competition for them, and with oil prices where they are today, there's a lot of demand for tankers.

They typically charge about $200,000 a day to transport oil from the Middle East to North America, whatever it may be. And a lot of transporting it to Asia, where they have huge demand for oil as well. So they have very, very high dividend yields, typically 10 to 15% dividend yields, and the stocks move up along with oil prices as well. So that's one, and there are some others. Knightsbridge is another one. There's a bunch of these oil tanker stocks that have done very, very well.

Second would be utilities. Now, here again, people do like to keep their lights on, and so the high-quality utilities I mentioned here, Con Edison, FairPoint Communications, which is in the telephone business, water utilities, telephone, electric, gas, very stable demand, and they have very high yields, and in many cases, they’ve been raising their dividend yields, and as interest rates come down, utility prices, stock prices, tend to go up.

So, again, it’s a way of benefiting from the weaker economy because people do tend to pay their utility bills. You’re getting higher dividends, stock prices tend to do very well in uncertain times. So those are just a few examples there.

And then the fourth category here are so-called business development corporations or BDCs. Now, these are companies you may not be as familiar with that what they do is they have capital and they either lend it or take equity positions in medium- and smaller-sized companies. Now, when they lend it, they’re getting very high interest rates because these are companies that may not be that credit-worthy, so they’re getting yields on their loans of 10% or higher, so that's why they can pay out dividends of typically 6, 7, 8%. And, they get equity in these companies as well so if the companies do well and grow and eventually go public, they get a nice equity participation as well.

So it’s a combination of very high current income and growth. So some examples there would be CapitalSource, CSE, Allied Capital, ALD, there's one called Gramercy Capital. There's a whole bunch of these things. Again, I list them all in the book, but this is a way of getting high income, benefiting from medium- and small-sized businesses, and getting some really good potential growth.

So there's lots of companies that have 5% yields or higher. I’ll give you some examples. There’s a newsletter called High-Yield Investing that actually has these on an ongoing basis; highyieldinvesting.com is their website. There's another newsletter I mentioned called The 25% Cash Machine. There's guy named Bryan Perry who runs that one. So those are two newsletters that on an ongoing basis are covering these yields, stocks, of 5% or higher.

It’s called The 25% Cash Machine. There's a cash machine, and the guy’s name is Bryan Perry, B-R-Y-A-N P-E-R-R-Y. Bryan Perry. So that's a way of ongoing seeing the new high yield stocks all the time. Alright. Are we feeling good so far?

Audience: Yes!

Jordan Goodman: You wanna make more money?

Audience: Yes!

Jordan Goodman: Just wanna make sure. Okay. On we go. That was Number Four. Number Five: DRIPs, Dividend Reinvestment Plans. Now, this is for the lazy person who is not gonna spend any time watching stocks. What a dividend reinvestment plan is, is if you reinvest dividends back into the company, there typically is about 1300 of them, and in addition to reinvesting dividends you can do what’s called optional cash purchase or OCP.

So, say you have Exxon, whatever, it’s yielding 5%. The dividends are buying more Exxon stock all the time, and you can set it up so automatically you could put in another hundred dollars a month, whatever it may be. It’s buying shares on an automatic basis with no commissions whatsoever. There's a website, directinvesting.com, where you can set that up. I think they charge you a one-time fee of like $10 per stock to set it up, and then it’s just on automatic pilot for the future.

So DRIPs are a very good way of building up capital over time brainlessly. You don’t even think about it, just automatically happening for you obviously get into high-quality stocks. Now, on top of regular dividend reinvestment plans are called discount dividend reinvestment plans or discount DRIPs. Now, here’s an example of free money. Are you open to free money?

Audience: Yes!

Jordan Goodman: Alright. Discount DRIPs wanna have long-term shareholder loyalty, so what they do is they will typically pay 5% discount on reinvested dividends. So if you give them $100 of dividends, you’ve reinvested $100 of dividends, you don’t get back $100, you get $105 worth of stock in that company, and of course it’s compounding, and this is all happening on an automatic basis without you even thinking about it. Alright? So that's an example of free money. Five percent every month, no commissions, on automatic pilot. You want automatic free money going for you?

Audience: Yes!

Jordan Goodman: Alright. There you go. So here are some examples of some of the companies that have discount DRIPs: First National Community Bank, the symbol for that is FNCB; Health Care REIT is a real estate investment trust, HCN is the symbol for that; and Marathon Oil, MRO. There's actually about 25 of them, and in the book I list all of them with all the details, their stock symbols, with the discounts, how you do it, and so on.

So you set up some of these things, as long as they’re high-quality companies, they have long-term records of paying dividends, you’ve got a discount on top of that, you do it, you put it away, and then 20 years from now, you wake up and like, “Wow, did that grow!” These are what I call Rip Van Winkle stocks. They just show up 20 years later after you’ve gone asleep, and you’re amazed at how much money you’ve made no matter what the economy’s doing. Question over here. Just use the mic. Yeah.

Audience: Can you usually set up a DRIP by just contacting the company directly or do you need to…?

Jordan Goodman: Typically not the company directly. They have custodians that do it, and this place I mentioned, directinvesting.com, they have it set up so you can do any company in one place. It’s not really with a company directly, although you do have to have the shares in your own name. If you do it in a street name, then they don’t know who you are. So you have it in your name, and then the dividends reinvest like that. So the best of all worlds is you set up a discount drip and you do optional cash purchase where you’re putting a hundred dollars a month into it, and you’ll just be amazed over time on how that money can add up. Alright? So that's Number Five. Was that one good?

Audience: Yes!

Jordan Goodman: Alright. You want more money?

Audience: Yes!

Jordan Goodman: Alright. Number Six: Bond Strategies. There's lots of ways to do extremely well in the bond market, and it doesn’t just have to earn you 4 or 5%, but you could really make your money grow a lot. The first one, zero coupon bonds. Now, a zero coupon bond is where you buy it now at a deeply discounted price and it matures at a particular time in the future, and you know exactly how much you’re going to get, and you don’t have to worry about anything.

Now, the best thing to do is a government-backed bond, a Treasury, which are called STRIPs, for example. So if you bought, say, a 20-year zero coupon bond, and I’m making up the numbers, you’d buy it for $1000 today, it would be worth $20,000 in 20 years or something like that. Whatever it is, you’ve locked in the interest rate and it just automatically goes. You’re not getting any current payments, but every year that goes by you are having that money grow.

Now, I actually bought some zero coupon bonds myself in 1981 when interest rates were about 12%, and I happen to know the numbers for this. I bought it at $12,000, and it becomes $100,000 in 20 years. Now, that was when rates were 12%. You’re not gonna get that today, but the principle is you never have to think about it again for 20 years, and your money is there. Alright?

Now, you could place your coupon bonds aggressively as well. When interest rates fall, the value of zero coupon bonds goes up extremely fast because you’ve locked in on interest rate, but interest rates rise, they go down. So they’re the most volatile of all bonds, but for most conservative investors, it’s a very simple way to lock in rates of return for many years and you don’t have to worry about it.

It’s best to keep zero coupon bonds in some kind of a tax-deferred account like an RRSP or an IRA, because every year that goes by you are getting interests in theory which are called the crude interest, but you’re not actually getting the cash. If you keep that inside an IRA, there's no taxable event. Alright? So that's zero coupon bonds.

The next one, foreign bonds and bond funds. Now, my view is that the dollar, which has been falling, is gonna continue to fall even further. Today, apparently, it was falling very sharply this morning. U.S. has huge trade deficits. It’s gonna be like $900 billion this year. We have these huge budget deficits, and we are lowering interest rates while the rest of the world is raising interest rates, so our dollar becomes less and less attractive.

So the way to profit from that is to have your money in foreign currencies in various ways so as the dollar falls you actually appreciate, and one of the ways to do that with income is foreign bonds and bond funds. So with that, you can either do a diversified portfolio where your money is now in Canadian dollars, in Euro, in Yen, in British pounds, so as the U.S. dollar falls, you’re actually rejoicing. Alright? I’m patriotic. This is not illegal. This is called profiting from hard times. Question over here.

Audience: Where do you go to find these bonds, like Singapore or Chinese or Malaysian?

Jordan Goodman: Through a broker. A broker has them, and actually there are some funds, and I’ve actually listed some of these, where you can get a diversified fund and they’ll do it for you. So it’s a very simple way to do it. It’s probably better if you’re gonna have relatively small amounts of money, you know, $1000 to $10,000, to buy a fund instead of buying individual bonds, because they’re not that liquid.

But if you buy a fund, they may have a hundred foreign bonds in them, and you could get a no-load fund from Fidelity or T Rowe Price or Vanguard, closed-end funds. There are loads of these things out there, and again, I mean, in the book I list a lot of the specific ones that are the best, but that's probably the easiest way for most people to do it, through a fund, either open-end or closed-end fund. Okay? So that's foreign bonds.

Mortgage-backed bonds is the other one. Now, there's obviously been a lot of turmoil in the mortgage-backed bond business but it doesn’t mean you have to abandon it altogether. I would stay with the safest mortgage-backed securities, which would be issued by Fannie Mae, Freddy Mac or Ginnie Mae, would be the big three. Here, you’re getting people’s mortgages that the government is guaranteeing if people do not make their principal payments you’re going to get paid that way.

You’ll get about a 5 or 6% interest rate on those, and again, you can do them directly, but probably the easiest way for most people is through a mutual fund, and probably the best one would be the Vanguard Ginnie Mae Fund. It’s a huge fund, well-capitalized, very simple, and you’re gonna get about a 5 or 6% yield on that. If interest rates fall as I think they’re going to with what the Federal Reserve is doing, you actually have a bit of a capital gain as well. This is a very conservative kind of way of doing it.

Municipal bonds is another way, in the United States anyway. You get tax-free income. If you’re buying a municipal bond in the state where you live, it’s double tax-free, and if you happen to be in New York City, it’s triple tax-free. It’s free from New York City, New York State and Federal taxes.

So the so-called taxable equivalent yield. The value of the yield you’re getting is worth more the higher your tax bracket is. And you wanna get a municipal bond. We have a question over here. Get the mic over there. The value of the municipal bond, it can be insured by municipal bond insurance companies like MBIA and Ambac, so you’re gonna be protected in case there are problems at the municipality. Go ahead.

Audience: Hi. On municipal bonds, say that you have residences in two or three states, are you able to purchase those and get the deduction on that interest rate in all three states?

Jordan Goodman: You don’t get a deduction. The income you get is tax-free. You get it in the state in which you file taxes. So if you file taxes in that state, yes, that would be income tax-free to you in that state.

Audience: Okay. Thank you.

Jordan Goodman: Now, you can either buy individual bonds or bond funds that are single state. You could buy a New York State or a California bond, that's only gonna buy California municipal bonds that would be double tax-free to you in that state. So the yields on those today might be 4 or 5%, but at a taxable equivalent yield, you’d have to get a yield of 7 or 8% to end up with the same dollars in your pocket as a 4 or 5% bond that way. So that's what makes sense particularly if you’re in a higher tax bracket. Okay.

And then, the last one would be closed-end bond funds. Now, these are funds traded on the stock exchanges, like the New York Stock Exchange typically, that have a widely diversified portfolio of bonds. Some of them may be foreign bonds, some of them may be municipal bonds, some of them may be a mix of all different kinds of bonds.

One good example, the BlackRock Strategic Income Fund, BSD is the symbol on that, has a very good record. That's got about a 9% yield today, and you buy it as a stock. Some of them, if they’re trading below their net asset value, they’re trading at a discount, say it’s a 10% discount, you are buying a dollar for 90 cents. A little bit more free money right there. So it actually boosts your yield on something like that.

If they’re trading at a premium, if they’re trading over the value of their portfolio, you probably want to stay away from it. But there’s loads of great closed-end bond funds with very high yields where they take care of it all for you. Alright? So those are some bond strategies. Those good?

Audience: Yes!

Jordan Goodman: Alright. Number Six. Number Seven: Option Strategies. Now, one of the speakers earlier talked about this, and these can make a lot of sense if you learn how to do it. A very conservative way to do options is to sell covered calls. Now what this means is you own an existing stock in your portfolio and you sell the right to buy that stock at a particular price sometime in the future, in a month or two in the future. You sell that, and in return for that you get a premium, which you get to keep.

Now, if the stock stays where it is or goes down, you just get to keep the premium, and in effect you’ve rented your stock and you get money for no extra cost. If the stock goes up to a certain level, you are going to have to sell your stock to meet that call. Say you bought a stock at 30 and you don’t think it’s gonna do that much, but say you sell a call at 40, so the stock goes up to 40, you then sell your stock and you’ve locked in a 10-dollar profit, and meanwhile, you’ve got a premium of $2 or $3 a share.

So it’s a way of kind of renting out your stocks, getting regular income from them, and the worst thing that can happen is you sell your stock at a profit. So that's not a bad thing, right? And you can do this over and over. Just think of it as renting out your stock portfolio and augmenting your income in a very conservative way. So that's selling covered calls.

And then, if you wanna get more aggressive, is to buy puts either from a broad stock market index like the S&P 500 or the Dow or the NASDAQ, or even more fun, narrow sectors. So as these sectors decline, you make money. Now, personally, I’ve been doing this lately in the financial sector, and I have a financial sector put that has gone up dramatically.

So every time I see Citibank writing off $11 billion, I say, “Could it be $15 billion?” you know. The more pain in the mortgage market and the more write-offs, the subprime blowing up and some bank in England having a run, I say, “This is great,” because the value of that put is going up at value. Alright? So you can watch everybody else jump out of windows or you can profit from it. That's a very simple way to do it.

Now, this doesn’t mean—this isn’t illegal. This isn’t immoral. Other people are making money this way. You might as well join them. Alright? So, either broad market decline or individual sectors. I happen to think the financial sector has got more pain to come, so that's certainly a way to go.

Or, you could go the other side, buy calls on hot sectors that look like they’re going up. These are three sectors that I’ve been playing lately. Solar is one of them. Natalie talked about Suntech, SunPower, Conergy, Q-Cells, First Solar. I was in a call option in First Solar two weeks ago that went up $50 in a day, and my option went up about $26,000 on that one day. That was good.

So, obviously it’s volatile, but that's the kind of thing, if oil prices keep going up, I think solar’s gonna become more and more attractive as an alternative. So, solar is one area I would do calls in. Chinese stocks. We certainly heard about that before. Volatile, but I think have huge upside potential with the growth going on there. So I’ve been playing a broad index of Chinese stocks. We can play some individual ones.

And gold is another one. As the U.S. dollar falls, gold keeps going up. Today, it was up back over $800 an ounce. So, again, you can do a broad-based index and you can do options on it. That's like turbocharging it. But again, if the dollar’s falling, it’s like don’t weep. It’s like, oh, great, that means gold’s gonna go up more. So those are some conservative ways. Question. Go ahead.

Audience: Yeah, I was wondering for your calls and puts. What sort of term are you buying? Are you buying three months out, one year out? What’s the term?

Jordan Goodman: I wouldn’t buy one year out. I typically buy two or three months out, and if I have confidence in the direction, then I will buy an out of the money put or call. Okay? So, First Solar is an example. I bought a 120 call when the stock was 115, and then when the stock went up to 170 or whatever it was, I made a huge amount of money that way. So, it’s a little bit more aggressive way to do it.

If you wanna be more conservative, you can do kind of at the money where the stock is currently trading or even in the money further. But if you have a pretty good sense of direction, give it two or three months. If you do it one month, you may be in the right direction but not have enough time to do it. That's the way I would play the options. Question over here.

Audience: …index?

Jordan Goodman: Broad-based indexes. Uh-huh. So, for example, the Dow Jones Industrials is a broad-based index. That's what they call the Diamonds, DIA. Or the NASDAQ, they call the QQQs. Or the Standard and Poor’s 500. It’s called the Spiders. These are broad-based indexes.

So if the overall stock market falls, that's a way of profiting from the overall stock market falling by buying puts on a broad index. That's a little bit safer than picking a particular industry, but if you pick an industry that has lots of pain, that means lots of profit, right? Does that answer your question? Okay, good. Alright. Question over here?

Audience: What do the actual terms of in the money and out of the money mean?

Jordan Goodman: Okay. If a stock is trading say at 30, something that would be at the money would be a call option or put option giving you the right to buy or sell at 30, okay? Say it’s a call, which is, if you want to go up, a call that would be in the money would be at 25, so you’ve already got $5 of what’s called intrinsic value in it. A call that would be out of the money would be the stocks trading at 30 and you’re getting a call at 35. So it’s not there yet, is the idea.

So if you get something that's out of the money, it’s cheaper to buy but it’s a little bit riskier because the stock has to go up to 35 or higher for you to make money. That's briefly the in and out of the money. Alright? Okay. I wanna keep going. We got lots more to cover here.

Okay. Number Eight: Foreign Exchange Trading, and again we had one of the speakers talk about this. With the dollar falling, you could profit by having your money in foreign currencies. So, different ways of doing that. There are foreign exchange CDs, these are FDIC-insured CDs, by a company called EverBank, E-V-E-R-B-A-N-K; everbank.com is their website.

They have CDs denominated in Canadian dollars, pounds, Euros, Yen, Australian dollars, whatever currency you want. So you have a guaranteed interest of typically about 5 or 6% and appreciation as the U.S. dollar falls against these foreign currencies. So there's a way of getting FDIC insurance and gain against the weak U.S. dollar.

Then, the other way you could do it is to buy and sell foreign exchange directly, and you heard before, that's really relatively easy to do. You just have to follow the charts and make sure you get it right. You can make a long-term bet on these things, and again, I would bet against the U.S. dollar. That's a way of profiting from that, and we talked about this a little bit before.

Buying foreign stocks and bonds and funds in foreign currencies, so as the U.S. dollar falls, you get appreciation that way. So this is definitely a trend that's gonna go further. People say, “How much further could the dollar fall? Has it a lot further to fall?” The Canadians in the crowd certainly know how much the Canadian dollar has appreciated. Had you bought Canadian dollars or had you money in Canadian dollars, you’ve made a lot of money just on the exchange alone.

Okay, Number Nine: Cash Flow Strategies. Was there a question? No. Okay. Cash flow strategies. Now, this is something you might not have heard about before. This is when there's any kind of a cash flow, that cash flow can be sold at a discount and allow you to profit. So I’m gonna go through the six different kinds of cash flows that are out there, and there’s a whole world of trading cash flows out there. In fact, there's a place called the American Cash Flow Association that has over $5 billion in cash flows being traded every year.

So let me explain what a cash flow is. A business-based cash flow is a company has invoices and they’re maybe not getting paid on these, but they’re gonna get paid eventually. They’re willing to sell those invoices to you at a discount. So, say they’re billed out $10,000. If I give you $9000 right now, I get the $10,000 when it comes in. This is called factoring. This is factoring for the little guy.

So the way you could do it is either you could be the one who buys the invoices in a case like that or you can broker it where you put a buyer together with the seller and you make a commission on it. And this is something you can do in your part-time, and it’s not affected by the economy really whatsoever. So that's business-based cash flows.

Collateral-based cash flows are cash flows based on some kind of a collateral. Mortgage notes, you could have a note on a car, on a motorcycle, on a boat. Anything that's a piece of collateral that could be seized if the underlying loan is not paid back is a collateral-based loan. So there's a huge business in mortgage notes, for example, and you can buy and sell mortgage notes at a discount and make yourself quite a nice living on that.

Consumer-based cash flows is where the consumer owes money one way or the other, and if it’s collected, typically it’s sold at a very big discount and you could make money on that. So the most obvious example of that would be past due credit card receivables. There are people that buy credit card portfolios at 2 and 3 and 4 cents on the dollar, and they then harass all the credit card people out there, and if they get 10 cents on the dollar they’ve doubled their money.

If you’ve ever had a very old credit card bill and you get a call from somebody, “Seven years ago you didn’t pay your credit bill.” “Oh, I forgot about that.” “Pay it now.” Some of the people pay, and so it’s a way of getting very, very deeply discounted cash flows that could be—the hedge funds that do this make millions of dollars buying consumer-based cash flows.

The next one is contingency-based cash flows. Now, there's a whole business out there of investing in lawsuits, and here’s how it works. Either lawsuits or settlements. So, Johnny just got run over by a motorcycle, went to court, he’s getting a million-dollar settlement being paid by the insurance company or something, or they settled it out of court or there was a jury verdict, whatever it may be.

Johnny’s still in the hospital. He needs the money now. It’s a million dollars but it’s gonna take him a long time to get the money. So he's willing to give you, if you give him $600,000 right now, you can get to collect the million when it comes in, or whatever the numbers may be. So that's called contingency-based.

So there are people, literally the only thing they do is they hang around courtrooms, and right after there's been a settlement they approach the attorney and say, “Could I buy that settlement from you at a discount?” Isn’t this wonderful? And you see how this is not affected by the economy. There's always gonna be people being sued and winning lawsuits and so on, so you can make a lot of money on contingency-based cash flows.

Next one is insurance-based cash flows. Now, this is where there's gonna be an insurance company paying one way or the other. So, for example, doctors love to sell their invoices because they get paid very slowly by insurance companies or Medicare. So instead of waiting three or four months or whatever it may be to get paid, they are willing to sell their receivables at a discount, and then when Medicare or the insurance companies pay, you get the difference between what you bought at a discount and the full price.

A lot of doctors work on that all the time. So, some people, all they do is approach doctors and say, “Will you be willing to sell your receivables?” And they do that all the time because doctors can get into real cash flow crises.

Another insurance-based kind of a cash flow would be annuities, or there's something else called viaticals. Viaticals, now, this may sound a little bit creepy but people do this all the time. If you have somebody with a life insurance policy that's worth, say, $100,000, and they get terminally ill, they’re not gonna be around to enjoy the policy but they need money now, so they’re willing to sell that insurance policy at $60,000, $70,000, whatever it may be, and when they die, you collect the $100,000. Meanwhile, they’ve got money to live for the last few days of their lives. So there's a whole world out there with viaticals to do it. Question over here.

Audience: What rate do you get on the insurance-based…?

Jordan Goodman: All of this is negotiable. This is where all the skills you have from negotiation come in. So, it depends on the buy and sell price, and there's no fixed price out there. You have to offer them a price they’re willing to accept and you have to do something that's acceptable to you, but this is all up to negotiation. But I mean, typically, it could be 20, 25, 30% over relatively short periods of time.

And there are a lot of other factors. For example, how sure is the payment? The surer the payment the lower the interest rate’s gonna be. Like the consumer-based one is more unsure, so it’s gonna be a higher yield than a very sure kind of payment. I mean, like Medicare or insurance companies, you know they’re gonna pay, you just don’t know when. Alright?

And then the last one is government-based cash flows. The best example of this would be lotteries. Somebody wins a 20-million-dollar lottery and they’re gonna take their payments over 20 years or something. Instead of waiting, they will sell that lottery cash flow at a discount, and then they get their money right away to go blow, and then they go back and become poor again.

But meanwhile, you’ve got a locked-in rate of return for the next 20 years paid by the government. So that's a very secure, that's an easy one to get. So when lottery winners win, they get attacked by all these people wanting to buy their cash flows. Go ahead.

Audience: Going back to the life insurance piece for a minute.

Jordan Goodman: Mm-hmm.

Audience: Does it matter whether or not it’s term or whole life?

Jordan Goodman: It doesn’t really matter. Just the main thing is life insurance is gonna pay when the person dies. Alright? Yes, go ahead.

Audience: Also on the insurance-based one, do you have some good examples of those?

Jordan Goodman: Well, like I said, viaticals would be a good example where, you know, somebody who has an insurance policy and they’re pretty much terminally ill, and in fact you can buy a whole portfolio of them, so you don’t have to wait for one person to die but as they keep dying they keep paying. This sounds kind of gruesome doesn’t it? But it’s perfectly legal and it works. And you see how this is not affected by the economy, right? Alright. Viatical is V-I-A-T-I-C-A-L. Viatical. Viatical. Okay.

Alright. So that's Number Nine. Number Ten: Passive Income Strategies. Now, Harv talked about some of these but let me just briefly go over some of the passive income strategies that are great.

Vending machines. If you have chips or Coca-Cola or whatever it may be in the right location, it is literally a cash machine. You will get lots of change as long as you keep supplying it. You go to Wal-Mart and buy your potato chips or whatever it may be at 10 cents and you put them in the machine for a dollar, and these are just literally cash machines. You can earn very, very high yields on those. Main thing is to have a product that people want in a location they want. There's a whole world of doing that, but that's vending machines.

The next one is credit card reading machines. Now, this is where every time you swipe a credit card or debit card, a fee is generated by the merchant. It might be 25 cents. So you buy a portfolio of so-called POS, point-of-sale machines, that every time anybody’s swiping those cards, you’re getting fees automatically. So you can buy into whole portfolios of POS machines that, for example, one of them has all of the taxicabs in Toronto, is an example.

So, apparently it’s mandated in Toronto. You have to do it with credit or debit cards, and so every time anybody has arrived in Toronto, you’re getting a little piece of the action. So you buy it for typically 10,000 to 15,000, whatever it may be. The yields on those are typically about 25% per year, and then it appreciates over time, and you can actually reinvest your money back into more POS machines and build up a nice portfolio for yourself. So that's credit card and debit card swiping machines.

The next one is timeshare rentals. Now, this is if you have a timeshare in a high-quality location at a time of year that people wanna rent, you can rent that out typically over the Internet very simply and get very nice income that's gonna be far more than your annual maintenance cost is gonna be.

I’ve actually done this myself. I bought Marriott timeshares, which are high-quality and high-demand. I went into one of these places, and there's a guy who bought 50 timeshares, and all he does in life is rent out timeshares and does it all on the Internet. And he has massive passive income, and as long as it’s in a high-quality place in a good time of year, they’re really relatively easy to rent, and that's a good source of passive income. These good?

Audience: Yes!

Jordan Goodman: Alright. The next one is payday loan store funds. Now, you see them all round Las Vegas for sure. Check-cashing places, payday loans and so on. There's about 20% of the population that doesn’t have bank accounts at all. They just can’t afford them, they don’t have the minimums, whatever it may be, and they live on these payday loan stores.

And you can say it’s bad, but it’s the way it is. This is a service people wanna pay for. Now, they typically pay very high interest rates for short periods of time. They may have a loan for two weeks until they get their pay check, and so the interest rate on that can be 20% or higher in many cases. So if you have a whole portfolio of payday loans, typically today they’re getting about 13, 14%. And extremely stable, they’ve been around for a very long time. Again, from your point of view, passive income just comes on a regular basis.

And then, last one would be Internet advertising. How many of you have a website? Lots of you have websites. If you can attract traffic to your website, you can make passive income automatically. Now, Google has what’s called AdWords, MSN has something, Yahoo has what’s called an affiliate program. We have a question over here. Just give us your comment with the mic. Yup.

Audience: Okay. AdWords is the pay-per-click side of Google Ads.

Jordan Goodman: Right.

Audience: What you’re referring to, I believe, is AdSense.

Jordan Goodman: Correct. You could do it both ways. The pay-per-click…

Audience: Well, I’m saying pay-per-click would be an expense of mine. AdSense is where I get the income from supporting the pay-per-click.

Jordan Goodman: Correct. That’s correct.

Audience: So I’m just clarifying AdWords is an expense. It’s not a source of income.

Jordan Goodman: That's correct. Appreciate that. That's correct. That's right. So, the point is that you attract people to your website, and they’re typically gonna have content that's related to your kind of content, and as long as people are clicking on it, you’re getting regular income. This is making money in your sleep. Passive income. Alright?

So, really briefly, I could go into more detail on all of them, those are 10 strategies where you profit even if the economy goes down. Does that sound good?

Audience: Yes!

Jordan Goodman: Okay. So now we’ve taken care of all your investments, you’re making a huge amount of money even though the economy’s going down. Now, I’m gonna take care of the rest of your personal finances. Is that okay?

Audience: Yes!

Jordan Goodman: Alright. Here are my 10 secrets to financial success, and these are not really investment-related. My first principle is: Never refuse money. Can you repeat that?

Audience: Never refuse money!

Jordan Goodman: Alright. Do you think there is free money to be had out there? Do you want some?

Audience: Yes!

Jordan Goodman: A little or a lot?

Audience: A lot!

Jordan Goodman: Just wanted to make sure. Okay. First one. Microinvesting. Now, microinvesting is where you sign up with a place, I’m gonna give you some names right here, where every time you buy anything, they give you a rebate. It goes automatically into either your kid’s college savings account or your retirement account.

So there's a place called Upromise you might have heard of, their phone number (888) 434-9111, upromise.com is their website, that every time you buy anything at a Upromise-related retail, and there's about a thousand of them, they’re putting money automatically into your kid’s college savings account. And you have to have a college savings account set up for the money to go into, but as long as you do, on a quarterly basis money just keeps going in there.

The average American spends enough so from age 0 to 18 the average American kid would accumulate about $22,000 dollars from Upromise if you started at birth. So that's an example of free money. Now, the same thing is true for retirement. There's something called NestEggz, N-E-S-T-E-G-G-Z, at nesteggz.com or (866) 837-8380, that everything else is the same but instead of going into a college savings account, money goes into your IRA or your RRSP. So you can have money automatically going into your retirement savings account, which you then invest and earn a good return on.

And in Canada, there's a special place called Futura Rewards, F-U-T-U-R-A Rewards, futurarewards.ca, and their phone number (866) 728-3454, which is called Kids Futures. This is the same thing. The money is going into a college savings account for your kids in Canada only. If there's a Canadian one I try to give it to you, and there's one there. So that's one example of free money.

Number two: Get a mortgage where the interest rates only go down and never up. Have you heard of this before? Okay. This is a new thing. The interest rate drops automatically whenever interest rates drop but never rises when interest rates rise. This is not something you’re gonna get at your local bank by any means.

Here’s how it works. They start at the current market rate, maybe slightly higher than the market rate. They take a look every six months. If interest rates have dropped by a quarter point or more, it automatically goes down. They call you up and say, “Well, time to go in and lower your rate again,” and you don’t normally object to that. Your maturity stays the same, so you’re not starting all over again. When you normally refinance, you’re gonna be starting the clock all over again. Here, your maturity stays the same no matter how many refinancings you do, and there's no closing cost each time you do the refinancing. This sound good?

Audience: Yes!

Jordan Goodman: Okay. You could do this for investment properties as well as your own home as well, by the way. Now, I’m gonna give you an example of me doing this, because I eat my own cooking here, and this is something that I’ve done and enjoyed very much.

I got my original mortgage in February 2001 at 7-3/4. At the time, rates were maybe 7-1/2, something like that, so I got it at 7-3/4. And then, a few months later in August, rates fell, went down to 7-1/4. So the lawyer calls, I was going to sign a bunch of papers. Each time this happened, I saved about $100,000. So I’m willing to spend an hour to save $100,000 and lower my interest rate.

Then, in June 2002, the next year, they come in again and said, “Well, it’s dropped again, 6-3/4.” I said, “Oh, I’m willing to spend another hour signing papers.” So I went back in, and now it went down to 6-3/4. Then, by January of the next year, rates had fallen again, 6-1/4. Went back in. Everything else was the same, the appraisal was the same, no need for credit reports or all the stuff. Just everything is the same except the rate just went down.

Then I went back July of that year, it went down to 5-3/4. And this is really kind of fun, but the lawyer is kind of getting sick of me, you know. We just keeping doing the same thing over and over, but each time it gets better. And then, January 2004, it went down again to 5-1/4. He's really gotten sick of me now, but I’m enjoying this process. And finally, by June 2004, it went down to 4-3/4, which is where it is today. It’ll never go up from 4-3/4. Okay?

Now, how much money do you think that's gonna save you? Hundreds of thousands of dollars. Okay? It depends on the size of your mortgage. It’s gonna save you a lot. Okay, where and how to get it? You ready?

Audience: Yes!

Jordan Goodman: Alright. They’re interested in this one. It’s called the ARC Loan, the Automatic Rate Cut mortgage. The ARC Loan. It’s from Canada as well, 800-ARCLOAN, or the website www.arcloan.com. Now, they just have a very different philosophy than most mortgage companies. Most mortgage companies are trying to get as much interest, as many points, as many fees as you can upfront. When interest rates fall, everybody walks across the street and they start all over again and they have all the fees and all that. But they assume they’re gonna lose half their customers.

The people at ARC Loan, and I’ve dealt with them since 1993, they’ve been doing this, their view is we wanna hold on to customers for life, and if interest rates fall we want the customers to benefit in that, and therefore, they get these mortgage servicing fees. Every time you pay your mortgage payment, the company gets a mortgage servicing fee. So they’re willing to hold on to the fees instead of kind of getting as much as they can from you upfront, and then assuming you’re gonna walk across the street. Alright?

So, if you go to your local bank and say, “I’d like an ARC Loan,” they’re gonna say, “Are you from Mars?” They have never heard about these things before. But these are the kinds of things that exist that most people do not have a clue exist. We have a question over here.

Audience: Yeah, are these loans assumable?

Jordan Goodman: Yes, they are assumable. They’re assumable loans. And just to re-emphasize one of the points. The maturity does not change. So when I started my original mortgage in February 2001, it’s a 30-year mortgage, it was a February of 2031 maturity. The maturity is still February 2031. So every time rates went down, I did not start all over again. So you get that double benefit. You’re now paying a lower payment, and you’re still paying it off for the same period of time. Okay? Go ahead.

Audience: [inaudible]

Jordan Goodman: The question was residential, commercial? No, they can do commercial as well. You can do investment property as well as your own home. Got a question over here? Go ahead. Wasn’t there a question over here? Here we go.

Audience: When you go to your lawyer every six months to sign the paperwork, do you have to pay your lawyer?

Jordan Goodman: Typically paid by ARC Loan.

Audience: Wow.

Jordan Goodman: Yeah. No closing costs, points or fees each time it happens. It’s correct. Go ahead.

Audience: Yeah. What type of qualifications for the people getting these loans?

Jordan Goodman: The better your credit, the better the interest rate’s gonna be. Okay? So even if you have, and they do A credit, B and C credit, so if you have not as great credit, you can still get an ARC Loan but the interest rate’s gonna be higher. It’s still gonna come down, correct. So today, last I checked with ARC Loan, they were at about 6-1/4, 6-1/2, something like that, maybe even 6. I’m not sure, but something in that range.

If you have C credit, you might be getting 7-1/2, something like that, whatever. So you can still get it, but based on your credit you’re gonna have a higher interest rate. Question over here.

Audience: Can you use this type of mortgage for like recreational, like buying like Costa Rica property or…?

Jordan Goodman: I don’t think Costa Rica’s gonna work. They like to do it in the U.S. or Canada.

Audience: Oh, really?

Jordan Goodman: Yeah.

Audience: So, but…okay.

Jordan Goodman: They’ll do investment property, but I don’t think, we can ask the Costa Rican people but I don’t think they’re gonna do that in Costa Rica.

Audience: Okay. Can you use it then for real estate purposes, buying other property…?

Jordan Goodman: Yes. As I said, you can do investment property as well.

Audience: You can?

Jordan Goodman: Yes.

Audience: And would the rate be higher?

Jordan Goodman: Slightly.

Audience: Slightly?

Jordan Goodman: Commercial’s gonna be slightly higher than residential.

Audience: Okay.

Jordan Goodman: But you’re still gonna save yourself a lot of money. Go ahead.

Audience: What’s the process if you have an existing mortgage to switch it over into this? Does it cost you…?

Jordan Goodman: You are refinancing your existing mortgage into an ARC Loan. Now, remember there are not closing costs, points or fees. So the first time out, your rate might be slightly higher than the market. So, I started 7-3/4. At that time, rates might have been 7-1/2. But in the long run, I’ve come out extremely ahead. But you are in effect refinancing your mortgage into an ARC Loan. Yes, go ahead.

Audience: What’s the percentage of the down payment?

Jordan Goodman: Depends on what you want. I mean, they would like at least 10%. These are not subprime loans. These are not no-documentation loans. This is a legitimate, real mortgage that's not gonna blow up on you. But they would like at least a 10% down payment. One more over here. I want to keep going. Yeah? Go ahead.

Audience: Can you get more than one mortgage?

Jordan Goodman: You could absolutely get more than one mortgage. Absolutely. People do it on their primary residents and invest properties.

Audience: And are they just online?

Jordan Goodman: Well, they are online. You know, they call people and it’s done by phone as well. So you can go onto arcloan.com and see the whole, they have a little calculator that can show you what’s gonna happen. But you do have to then call them at 800-ARCLOAN, and they’ll take care of it on the phone. But it can be done on any state or in Canada. Alright. I’m gonna keep going. We’ve got more things. Was that one good?

Audience: Yes!

Jordan Goodman: Would you wanna save more money on your mortgage?

Audience: Yes!

Jordan Goodman: Alright. Here we go. Now, this is something where you can pay your mortgage off in five to seven years instead of 30 years. Now, you combine the Equity Advantage System with your ARC Loan and you’ve got the best of all worlds. Alright?

Now, here’s how it works. Instead of having a traditional 30-year mortgage where you’re paying off pretty much interest for the first 10 or 15 years, you’re paying off a very small amount of principal, with the Equity Advantage System you’re paying off principal from day one. And the way it works is, in effect, it’s a home equity line, a specialized home equity line, where you put your income into it and you pay your expenses out of it, and the result is your average daily balance on your mortgage goes down from day one. And the end result of that is you literally can pay your mortgage off in five to seven years.

Now, you combine the ARC Loan with the rates coming down with an Equity Advantage System, and you could pay your mortgage off even faster. If interest rates fall, you’re gonna get a better rate. So the phone number for that is (888) 262-5540, and the website truthinequity.com. At truthinequity.com, there's a whole form you fill out. At the end of it it says, “In your situation with this amount of mortgage, this interest rate, you’ll pay your mortgage off in 5.6 years,” or whatever it may be, and there's a whole spreadsheet that goes with it.

And if you put an extra thousand dollars into your mortgage, it’ll pay it off in two more months, whatever it may be. But the key thing is to pay down principal. Okay? Most of you are paying interests, and this is paying thousands and hundreds of thousands of dollars in interest that you can short-circuit by doing an Equity Advantage System. Is that good?

Audience: Yes!

Jordan Goodman: Alright. You want more mortgage tips?

Audience: Yes!

Jordan Goodman: Alright. We’re making a lot of money here. This is good. Canada as well. They do it in Canada as well. Absolutely. Okay. Now, I’m gonna solve a problem for you you don’t even know you had. We have a question over here. Let's get the mic over here, please. Yeah, let's just keep the mic runners around so we can… Question over here.

Audience: Can you do that with a home equity loan?

Jordan Goodman: This is a form of home equity loan. See, I didn’t want to go into it in too much detail, but basically you pay all your expenses out of it. You put your salary into it, you put dividends, you put interests into it, okay? So during the time your interest and income is in it, your home equity, your balance, is down. As much as you can, you get all your expenses on a credit card. You pay it like once a month.

So during the time that your income is in it your balance is down, then it goes back up when you’ve paid your expense, and it goes down. The key thing is getting that balance down on a regular basis, and this is a whole disciplined way of doing it. So it’s a form of home equity loan, but most home equity loans do not allow you to buy or write a check for $1.12 or something. This allows you to do it with any size. Alright? Okay, I wanna keep going.

Okay. I’m gonna solve a problem for you you didn’t know you had. Is that okay?

Audience: Yes!

Jordan Goodman: Alright. If you have an adjustable-rate mortgage, how many people here have adjustable-rate mortgages? Lots of you. In many cases, something like 40% of all cases, the adjustable-rate mortgage payment is wrong. There's a lot of complexities depending on what index it was tied to and so on, and in many cases, adjustable-rate mortgage payments are wrong.

So, I’m gonna give you a place that’ll actually get you refunds of thousands of dollars if your payment is wrong and lower your monthly payment as well. It’s called the ARM check, standing for adjustable-rate mortgage check, and the website for that is checkmyarm.com, and the phone number for that is 800-MISTAKE.

The guy who runs this, a guy named David Ginsburg in Maryland, said he had a case recently where they’d been paying the wrong payments for 15 years and they were owed $32,000. They’d overpayed by $32,000. So the bank wasn’t happy to hear from them but it was accurate.

So what he actually does is he kind of audits your existing mortgage, what you should have been paying, and then gives a detailed breakdown of, “Here’s what you should have been paying all along,” and says to the bank, “Here’s what we should be paying,” and usually they can’t dispute it. Alright? So that's adjustable-rate mortgage.

And the other area that a lot of people have wrong is escrow. If you are having property insurance and property taxes withheld, in many cases they are being over-withheld by the banks. So, again, he does the same thing. He does an audit, and that’s called escrow check or checkmyescrow.com, their website, and the phone number’s 800-MISTAKE, the same thing as that. And he checks, and in many, many cases, banks are over-withholding escrow, and of course you’re not earning anything but the bank is earning something on it.

So it’s a way of getting that escrow down to as low as possible to make sure that that's accurate. I’ve had a lot of people do this and they get incredible surprises at how much they’ve been overpaying in both escrow and ARM payments.

One more thing in the mortgage area, reverse mortgages. Now, we’re not all there yet but when you hit 62, a lot of people, the only asset they’ve got left is their home. They’ve gone through all their savings and so on, and if you get a reverse mortgage, it’s a way of getting income from your home and you still have to live there, and you have to make no payments.

When you sell the home or die eventually, then the home will typically be sold and repay the reverse mortgage, but meanwhile you get to live in your home for the rest of your life and, in fact, have a decent lifestyle. Typically, you’ll get about 60% of the appraised value of the home. I’m just gonna finish, and I’ll take your question.

You can draw down the equity in three ways. Typically as a credit line, so you have a credit line you can access whenever you like, as a lump sum, you take down the entire 200,000 at once or as an annuity, a certain payment for the rest of your life. So those are three ways you could typically get out a reverse mortgage. The homeowner receives more income, the homeowner can stay in their residence a long time instead of having to move to a nursing home or something like that, and one of the best things is you, the kids, face fewer financial burdens.

I’m finding a lot of people who are getting to retirement age who have a beautiful home around them and no other money, and they’re gonna move back with the kids. This is what I call the reverse boomerang generation, you know. The parents are moving in with the kids now because they don’t have enough money. So if you were in the kids’ situation, it’s a great way to keep your parents in their home and you have a life. We have a question over here.

Audience: Yes, back to the ARM check.

Jordan Goodman: ARM check? Uh-huh.

Audience: Would they go back if you’d already paid off your mortgage?

Jordan Goodman: Not if you paid it off. You’d have to have one payment left. Yeah. But if the mortgage is already paid off, it’s too late. But if you have an existing ARM going, they will audit it for you. Yes.

Okay, so here’s a good way to get the best reverse mortgage out there. The phone number is (800) 931-0370, extension 1344. It’s a bank called Access National Bank, which is the best out there. They have a very good program, they really work with it, and in many cases I find, the kids recommend this to the parents. Okay? The parents are 62-plus and, you know, I mean the argument you can make to your parents is, “I’m gonna get less of an inheritance and you get to live in your house.”

Now, what you’re really thinking is you don’t want them to move into you, but you don’t tell them that, you know. But really, in many cases, people who are 62-plus have these wonderful homes. They’re what I call house-rich, cash-poor, and this is the perfect solution for them. They don’t have to make payments. They get to use that equity, have a decent lifestyle, and so you as a kid get less but meanwhile it works better in many ways. Question over here.

Audience: In California the cost of a reverse mortgage is around $80,000.

Jordan Goodman: Not that much. These guys are gonna be nothing close to that. There are certain fees that are mandated for closing cost upfront. It’ll typically be between $8000 and $10,000, should be nothing close to $80,000. That's a total ripoff if they’re charging that much. These are guys that work on a national basis. Alright? So that's reverse mortgage. So those are some mortgage tips. On we go.

Improve your credit situation. A lot of people are not really monitoring their credit very carefully and they really wanna do better with that. So, the first thing you wanna do is to get the best credit card interest rates possible. There are credit cards out there with much lower interest rates than traditionally what you’re gonna get in the mail. There’s one state in the United States which is the king of low-interest credit cards. Anybody know what state that is? Arkansas.

Arkansas. Arkansas, yeah. Arkansas has used that were set in the depression and they’ve never raised them since. So they have rates of 7 or 8 or 9% on credit cards there. In many cases, you get no-annual-fee credit cards. If you were paying in full every month and you want to have a card with no annual fee, there’s tons of 0% balance transfer offers out there. And if you do this, this is what I call, I’m gonna talk about this a little bit later, credit card surfing, where you surf your balance from one to another with 0% money.

Frequent flyer miles. If you wanna do that, the way to do it is concentrate all your miles on one airline where you’re gonna get—people have like five different frequent flyer miles, and by the time they’ve accumulated enough they expire, so get one airline that you’re gonna concentrate your mileage on. You can get like rewards from hotels and all kinds of other places.

Secured credit cards. If you have not-so-great credit and you’re not able to get an unsecured credit card, a secured credit card is where you put up a certain amount of money, they’ll give you a credit line for that amount, and then you can get your credit established, and then you can kind of graduate to an unsecured card.

A good source for all of this is credit-card-perks.com. It’s a free website, and you put on your situation and they’ll say, “Here are the best low-interest cards and frequent flyer cards,” all the things I’ve mentioned. They’ll get you the best possible deal on credit cards anywhere in the country. If you go after it, you’re gonna do a lot better than just what you get in the mail. Those are the worst offers. Question over here.

Audience: Actually just a comment. Be aware of the zero-balance transfers. If you are surfing your balances like that, it will lower your credit score significantly. So you don’t wanna do that if you’re about to be doing something financing like buying a new home or something like that. You wanna wait a year.

Jordan Goodman: I’m about to get into that, but I agree with you. You don’t wanna do too much surfing, yes. Alright. Also, monitor your credit report. How many people here have not seen their credit report in the last year or so? You have no idea what’s on there. That is dangerous. So you wanna make sure your credit report is accurate. Know exactly what your credit score is, your so-called FICO score.

Understand the effect on your credit score of every move you make. That's what we were talking about. With credit card surfing, that could lower your score, so with something like this you can know in advance before you mess up your credit what the effect of that is going to be. Also, protect against identity theft. Something like 10 million Americans got hit by identity theft in the last year.

And in many cases, it’s not that you’re doing something wrong. It’s somebody stole your data who was in some kind of a classified situation and they go off and do things. So what happens in this service, the one I mention in particular here, the one I think is best, is called the Equifax Credit Watch System, and their website is guardmycredit.com. There's a slight fee for it. I think it’s about $40 a year, but you can look at it any time.

Anything funny whatsoever goes on with your credit, they email you right away, and say, “Did you just buy 15 refrigerators in Buenos Aires?” Or, “Did you just buy 20 fur coats in Romania,” or something, and if it wasn’t you, you kind of know something funny is going on. You put what’s called a freeze on your account and stop it from happening again.

But if you don’t have something like this, what’ll happen is you get your bill two or three weeks later and you see this bill for all these refrigerators in Buenos Aires, and then you have to try to recover. You wanna know this is happening right away. With ID theft, you gotta stop it right away.

I always do this. Let's have some fun here. Is there anybody here who has been a victim of ID theft? Lots of names, whoa! Lots of it. Alright, let's just have one fun story. Where is there a mic? Okay. Just have your hands up. Okay, over here. We got a good ID. Just tell us briefly your story.

Audience: I went to the gas station and my credit card wouldn’t take the charge of 50 bucks, and we were on our way to San Diego. I’m from San Jose, Northern California. Who’s from Northern California?

Audience: Whoo!

Jordan Goodman: Uh-huh.

Audience: And I couldn’t charge it and I called right away, “What’s going on?” because it was pretty much paid off. And we called, “By the way, you have a 16,000-dollar balance.” “What the heck is going on?” I turned around and, “Should we take off? Should we stay? What should we do?” I panicked. I’d never experienced that in my life.

And, “It’s just a 16,000-dollar balance. We’ll take care of it.” I’m like, “Well, what are these charges?” and you know, so I panicked and I just took off. But later on I found out that they were using my credit card in Orlando and going to strip clubs, and my wife thought it was me but it wasn’t me…

[Laughter]

Jordan Goodman: You sure? [Laughing]

Audience: They charged $300 a pop. The $300 a pop, so it wouldn’t trigger any alarms or anything like that, and they added up to like $13,000 or something like that. They took care of it, but it was just really…

Jordan Goodman: This is not the time you wanna find out you have, “Oh, $16,000,” you can’t get gas at the station, you know? So, anyway, obviously we have loads of stories we could tell but ID theft is a huge problem. You gotta be protected against it. So there's a website, take care of it for you, guardmycredit.com. On we go.

We talked about surfing. I just wanna briefly talk about the three different kinds of credit card surfing. There's active credit card surfing, moving your balance from one place to another. If you do it right, it can’t hurt your score but it can keep your interest rates much lower. A lot of people are doing this all the time. Oh, let's get the slides up, yeah? Okay. There we go. Active credit card surfing is where you’re moving your balances from one place to another.

Passive credit card surfing is where you move your balance to one of these cards that are low, permanently low, like some of the Arkansas cards. For example, there's Pulaski Bank, Simmons Bank, Arkansas National Bank. Those are three examples where they’re gonna get you permanently low interest rates.

And then, maximizing your grace period’s the third one. That's where the grace period’s the difference between when you buy something and when you have to pay for it. So a very simple technique to maximize your grace is, say you have three credit cards, know when the bill goes out, and if you can’t remember write it on the card. So say you have one card that bills on the 5th of the month, one on the 15th, and one on the 25th, just for example. You go and buy something, you remember when it bills, and you bill it on the one where the bill most recently went out.

So today is the 19th. So let's just do a little example. We’re gonna go and clean out Circus Circus across the street here, okay? And so you’re gonna—which cards should you use, A which bills on the 5th, B the 15th or C on the 25th? Today’s the 19th. B is right, the 15th. So now it’ll be billed the 15th of December and you have extra time where the money’s earning interest for you instead of—because a lot of people will do something and they get the bill like the next day. “Boy, they were really fast.” They weren’t aware of when the billing cycles are. Alright, so that's just a little bit on credit card surfing.

Okay, on we go. You have a question over here? Okay, just get the mic. Yeah. Right over here.

Audience: You said to know your credit score, but aren’t there three reporting agencies, and are you gonna get a different score from each of the three agencies?

Jordan Goodman: Yes, there are three. There's Equifax, Experian and TransUnion, and at Equifax you get a 3-in-1 report, and you’re right. You will have slightly different numbers. There are actually three of you out there. You didn’t know that. But they have different information on them. So you do wanna see all three because when you apply for a car loan or a mortgage, whatever it may be, you never know which credit bureau they’re gonna use for which report.

Audience: And one time I got my credit report but they said it would be extra, I had to pay extra, to get the actual credit score. Is that right?

Jordan Goodman: Yeah. Sometimes that's true. If it’s a FICO score, which is the Fair Isaac Company, they will charge a little bit extra. At this service, at this credit watch I mentioned, it’s all included. Any time you want, you can get the credit report and the credit score. Make sure it’s accurate.

Audience: Thank you.

Jordan Goodman: Okay. On we go. Number four is getting out of debt using a high-quality credit counseling service. Let's get the slides up here. Yeah. Did you see that one? There we go. Get out of debt using a high-quality debt counseling service. What they will do is consolidate all your credit card bills, medical bills and other kinds of debt into one monthly payment instead of having all these different payments all over the place.

You pay a much lower interest rate, typically 2, 3, 4% instead of 18 or 25. I saw a credit card recently at 32%, and you know, it’s gonna save you a lot of money that way, and you get out of debt much faster than you possibly could on your own. This is what’s called a DMP or debt management program. It’s on your credit report as a neutral event. In itself, it doesn’t hurt you or help you, but it does help you get out of debt much faster.

Some examples, Debt Relief Solutions is a big one in the U.S., 800-4DEBTHELP is their phone number, or their website debtreliefsolutions.com. In Canada, the best one I found is called Consolidated Credit Counseling of Canada. Their phone number, (800) 656-3920. Their website, consolidatedcredit.ca. So both of them do the same. They consolidate all your credit into a low interest rate, help you get out of debt much sooner than you ever could on your own.

For businesses, if you have a business, there's a place called Corporate Turnaround, their phone number (800) 411-1113, or their website dontdeclare.com. And that's if you have a business that has a lot of credit card debt or other kinds of debts as well, they will work with the creditors to lower your interest rate and, in many cases, settle for 50 or 75 cents on the dollar, and they work in Canada as well. Mm-hmm.

And if you have tax problems with the IRS or state revenue agencies, there's a place called Tax Problem Resolution, and their phone number is (949) 250-5888, or their website taxproblemresolution.com. The IRS has a program called—it’s basically getting rid of taxes. They’ll typically settle for like 5 or 10 cents on the dollar. So if you don’t know how to do it, these people are experts at that. It’s helping you save tons of money on back taxes.

Okay. We just got you out of debt. On we go. Okay, number five. I’m gonna cut your health care cost now. Alright. There's something called medical repricing, which is a way to lower your health care cost. Basically, what it does is allows you to be part of a network even if you have preexisting medical conditions and save yourself tons of money on medical expenses. I do this all the time.

If you’re self-employed, in many cases you cannot afford regular health insurance. We have about 50 million people in America with no health insurance. Or, if you have some kind of a preexisting medical condition, you might not be able to get health care at any price because they only like to take people on which they’re not gonna have claims. And this doesn’t apply to Canadians. I know you have national health care. You’re completely happy, so there are no problems for you whatsoever there.

But for Americans, you have something, and then a lot of Americans have absolutely nothing, so medical repricing may be a good solution for that. Here is how it works. You pay one monthly fee. Typically it’s around $100, depending on whether you get a family plan or not, but roughly about $100 for your entire family. You gain access to a very wide network of doctors, hospitals, drug stores, all at significant discounts, 40, 50, 60% off the retail price.

The people that pay the most for health care are the people who have no insurance, the people who can afford it the least. So this is a way of being part of a network even though you’re not employed at some company that offers health insurance. You qualify even if you have a preexisting medical condition. Most health insurance companies run the other direction if you’ve had any kind of cancer, anything whatsoever. This way, even if you have preexisting medical conditions, you can save yourself a ton of money.

Here are the best ones I like out there, the ones I use. medicalrepricing.com is the website, or at the same place it’s called Global Healthcare Systems. Their website is also ghcsystems.com. Their phone number, (888) 521-8141. They have the biggest network of doctors and hospitals out there to save you tons and tons of money.

Another way to do this, there are so-called medical negotiators, and what they will do is even after the fact, is go in and negotiate for you because they’re doing it for many, many people at once and get you much better prices than you can get on your own. The best place I know with the medical negotiator is called Equal Health. Their phone number’s (866) 490-4989, and their website, equalhealth.com.

So there’s two ways to do the medical repricing, but I’ve just saved you about 50% on your health bills right there. Is that good?

Audience: Yeah!

Jordan Goodman: Alright. On we go. Whoops. You wanna see it? I told you we’re going fast and I’m running out of time here, so. Okay, number six, car buying. How many people like to buy cars? Well, it’s something you typically do every three years, every five years. You’re not really that good at it. It’s not something you typically have fun doing. So instead, use a car-buying service that will get you the absolute best deal on a car.

What they’ll do is this: They charge you a modest fee, typically between $200 and $400. If you want them to do the entire thing from beginning to end, it’s about $400. If they just advise you, it’ll typically be about $200 or so. First of all, they help you upfront, and they only work for you, the consumer, to tell you if buying or leasing is gonna be better in your situation. Then, they negotiate to get you a far better price than you could ever get on your own because they buy hundreds of cars a year, you’re buying one car every five years or something.

They know all the dealers. They’ll typically go within about a hundred-mile radius of where you are and have the dealers competing against each other, and they get you the best deal, they do all the paperwork, and you go on and pick the thing up. So it saves you a lot of time as well as a lot of money. And they also will get you better financing or leasing terms than you ever can get on your own.

I bought my last three cars this way, and I’ll just tell you my most recent example. I have an Infiniti ’35, and I went to the local dealer, I live in New York, and went in and said, “You know, I’d like to get a good deal,” and they said, “Okay, this is the best price we can do.” I said, “Is that your final offer? Get it in writing.” And I said, “Okay, that's your final offer.”

I then faxed this to the car-buying service. They beat it by $6000. Six thousand dollars, and it turns out I’ve been in New York, it was in New Jersey, I drove 20 minutes to save $6000. I thought that was worth it, you know. And it turns out there was a rebate from Infiniti to the dealers if they got the sale in by the end of the month for like $5000, which I would never have known about. That's what these car-buying services do.

So just for fun, I went back to the original dealer after I’d bought the car in New Jersey and said, “You know, what about this rebate $5000?” And he said, “Well, you’re not supposed to know about that?” I said, “Oh, I’m sorry.” I actually brought them the letter, you know, and said, “This is the…” “We’re supposed to keep that.” I said, “Oh, okay. Well, you didn’t get the sale because of it.” So you can save yourself a ton of money on cars.

The place to do it is called Car Source. Their website is carq.com. Their phone number, (800) 517-2277. There's a woman there named Linda Goldberg who is an absolutely ferocious consumer-oriented car-buying person who has been doing this for many, many years, and she can take the time and effort to make sure you get the absolute best deals.

Has anybody here bought a car through Linda Goldberg? Over here. Get a mic over here. Just very briefly, just tell us your story.

Audience: Yeah, I went to Linda and she helped me buy a car. Took about two months. I got a good credit score. Best I could get was about 6-1/2. She got me I think it was 2.5 or 3, and spent a lot of time negotiating the odds and ends and things like that.

Jordan Goodman: But how much did she save you on the car?

Audience: About $4000.

Jordan Goodman: Yeah.

Audience: I just turned up, picked the key up, signed the papers, and away we went.

Jordan Goodman: Very good.

Jordan Goodman: Question over here. Mic in here. Mic here, please. Here we go. Right here. This is typical. This is what happens.

Audience: Is this good in Canada, too?

Jordan Goodman: It’s even better in Canada.

Audience: Oh, okay.

Jordan Goodman: Okay. Linda I’ve been working with for a long time. She has been shocked. In the last two years or so, I’ve been working with her in Canada. Canadian car dealers get away with absolutely murder. Their profit margin, in the U.S. it might be $2500, in Canada it might be $10,000 to $13,000 profit margin. Because there's fewer dealers, and they just are monopolistic about it. So she loves saving money for Canadians. So, absolutely.

Now, sometimes, the best deal may be having to go across the border and getting it in the U.S. and bringing it back. It’s perfectly legal, and she knows how to do that. So, absolutely, she works in Canada. Absolutely. Okay, so we’ve just saved you tons of money on your cars. You ready for another one?

Audience: Yes!

Jordan Goodman: Alright. We’re on a roll here. Number seven. Okay, let's get it up here. Yeah. Here we go. Financial aid for college. The good news, there's loads of money available for college, and a lot of people do not know how to get it. Certainly, student loans is one way. Now, you go to your college and they’re gonna tell you this is the place to get student loans. That's the one where the college gets a kickback.

There's been a big scandal about that recently. A lot of college financial aid officers were having all kinds of fancy trips for saying, “This is the loan.” Okay, this is the place I’m gonna give you right now that has no connection to colleges whatsoever and offers the lowest interest rate. It’s called My Rich Uncle. Hmm? Scholarships is a different thing. This is loans. I’m gonna do scholarships next.

Their website is myrichuncle.com. You didn’t know you had a rich uncle, but now you do. And their phone number, (888) 697-4248. Now, with student loans, there's a maximum that the government sets. Every lender out there that I know of except My Rich Uncle charges the maximum. These guys charge the minimum. Alright? Now, they don’t have a huge marketing effort and so on, but they do really, really good stuff.

It was actually founded by two college students at NYU who were just disgusted with the whole system and set up a whole thing that’s much, much better. So, you know, you have to call them, but I’ve just saved you tens of thousands of dollars on your student loans.

And then, as far as scholarships and grants, there is loads of money available, $75 billion dollars in scholarships every year. About $3 to $4 billion is not given out because they can’t find the people that meet the criteria. So you gotta help these scholarship committees that are looking to give you billions of dollars that you’re not taking the money from them. They’re complaining all the time. Who fits these criteria? The left-handed Lithuanian tennis player who wants to go to Wyoming State or something. They can’t find the person. Alright?

So if you’re in a situation, here’s the way to do it. There's a website, fastweb.com, and another one, finaid.com as well. You put in everything about yourself or your kid, it comes back, “In your situation, here are the scholarships you have a chance of getting.” Tons of money out there to be had. And for Canadians too, yes.

Okay, number eight. Understand your money type. Now, the money type, I actually did a book on this, you have a financial personality. When you went through MMI, you probably went through that whole money type exercise, but I go into this in much more detail. These are the six types of money types I talk about very briefly. Strivers are the people who are kind of very outgoing and entrepreneurial, making things happen.

Ostriches are people who don’t wanna deal with money whatsoever. They have their head in the sand and hope it’ll all go away. Debt desperadoes are the people who get out of debt by going into more debt. “I’m gonna get rid of my credit cards by doing a home equity loan.” And then, when that's filled up, “Then, I’ll borrow from my 401k to get out of debt.” And then, when that one’s cleaned out, “I’ll borrow from my insurance policy.” They kind of keep borrowing to get themselves out, and someday they kind of wake up.

Coasters are people who think everything is fine, nothing will ever go wrong, so they just kind of coast along until they hit what I call a financial brick wall. “Oh, the kid’s turning 17. I think we should start saving for college, don’t you think, honey?” Or they’re 58, “I think we should start some retirement plan, you know,” or “We’re going to the loan closing for the house. I think it’s time to a start a down payment.” These are coasters. They just kind of keep going along.

High rollers. We’re loaded with high rollers in Las Vegas here, people who love to spend money and think that everything will go fine. They have no safety net whatsoever. And squirrels are the people who are totally living in fear. They are holding on to everything very tightly, waiting for the next depression, kind of the opposite of the high rollers.

And actually it’s interesting, when you marry somebody, you typically marry a different kind of money type. So squirrels marrying high rollers, it makes for some very interesting discussions, doesn’t it? On we go.

Number nine. Protect yourself against long-term health care costs. Lots of us are gonna live many more years than our parents did, which is great, except who’s paying for this? Long-term medical needs are not paid for by Medicaid unless you’re completely impoverished, and that's becoming very difficult to qualify for Medicaid. It’s not paid for by Medicare, it’s not paid for by health insurance, Social Security.

You’re gonna be on your own, and in many cases, if you can get a long-term care policy when you’re relatively young, it’s gonna cover many, many years that you’re going to need that money. A lot of people buy long-term care insurance when they see their parents needing it, and you wanna get that earlier. The younger you get it, the more healthy you are, the better it is. If you start waiting till your 60s and 70s, either you can’t afford it because the price goes up or you can’t get it at all because there's preexisting medical conditions.

So here’s a good place, an independent place to get it, Long-Term Care Quote. Their phone number is (800) 587-3279. Their website is searchltc.com, like searchlongtermcare.com. It’s an independent agency that has no allegiance to any particular company. They find you the best deal and can save you just tons of money.

Question over here. They work for Canada as well. Well, actually, no. Canada will take care of all your health care forever, right? So you never worry about these things. No, I’m kidding. I think they may, but they are more designed for the U.S., actually, where it’s a really big problem. Okay, so that's long-term care. On we go.

Number 10: Create a realistic financial plan. Lots of people have no financial plan. They have no idea where they wanna be going. So here’s what you should do with the financial plan. Working with an expert planner, first of all, set financial goals. Short-term goals are things like in the next year or so, medium-term are like the first five years or so, long-term would be five years to as much as 30 years like retirement planning, maybe starting a new business, something like that. You wanna create a net worth snapshot, which is how much you owe minus how much you own, kind of see where you are and do that roughly once a year.

Determine your risk tolerance. You’ve heard a lot of things during this week about all kinds of things. They may be outside your risk tolerance level, so you wanna kind of see where your risk tolerance is at, and then actually receive the support to implement the plan. You can have a great plan but if it’s sitting on the shelf, it’s not doing you any good.

A guy that I’ve worked with for many years is named Allen Grommet. He runs a company called Caring Financial Services. He's based in New Jersey. His website, caringfinancialservices.com. His phone number, (800) 881-1477. I’ve worked with Allen for over 20 years. He's extremely patient with people, really takes you through the whole process.

You don’t have to do it in person. You can be at your computer and he can be at his, and he can be working online, filling out all the different forms, and then he’s not trying to sell you anything. He's just trying to give you a financial plan to help you reach your goals. It makes a huge, huge difference.

So, hopefully, you’ll find all that helpful. Take advantage of all these things and be wealthy. Thank you.