Investing in Debt: Property Owners (SELLERS) Can Become Investors With The Stroke Of A Pen
“Financial Guru’s” know these terms but most ordinary people haven’t had their education. Sadly, primary and secondary institutions of learning spend little time preparing children for the world of credit and debt. Most young people don't learn about credit until they graduate high school and get to college.
Many financial "guru's" don't recommend these private investments; they defer to the banks and The Stock Market. I met a very wealthy man named "John" in New Jersey who invested his cash in Real Estate Investors who rehabbed properties and sold them. He charged 16% interest on short term loans. Try to get that interest rate from a bank account, today.
John "invests in debt". The worst risk he has is that he will own the property which is worth much more than the cash he lent to the rehabbers. That's what "secured debt" is.
The bankers and credit card companies know this and when they meet freshmen during college orientation, they pass out their plastic credit cards. The first time our children swipe those miraculous pieces of plastic to buy whatever they want; their feeling of financial power is awesome. After all, it will be 30 days before they’ll see the billing and interest due for their purchases.This is "unsecured" debt, the worst kind.
If you have assets you can arrange to be on the correct side of the ‘debt equation’. You should want to be on the side of the banker and not be the debtor. But, how does someone accomplish that? By loaning his or her equity in a tangible object, your home, vacant land, etc. Using your Hidden Bank.