Thoughts from the Desk of Bob Repass…

If you think about it our lives tend to revolve around food. What do you want for dinner? Do you want to go out to eat? What do we need from the grocery store? Sound familiar?

When I was a kid growing up, Sunday dinner was a thing. My childhood was influenced significantly by having my maternal grandparents within a short driving distance. Every Sunday we had a big afternoon dinner prepared by my Mom and her Mom (my Grandmother). Whether we were having ham or pot roast or spaghetti and meatballs it really didn’t matter, we knew we were going to eat at 3:00 and the food was going to be great! I may not have realized it at the time but looking back these dinners ingrained in me the importance of this designated family time.

My wife, Angie’s childhood was very similar. Every Sunday after church her family would all go over to her Grandmother’s house for Sunday dinner and enjoy her Grandma’s fried chicken and homemade biscuits!

So I guess it is not a surprise that one of Angie and my favorite traditions in our almost 37 years of marriage, has always been family dinner! What’s for dinner doesn’t matter — it’s the environment that you create that makes all the difference.

When our children, Robbie and Kristin, were growing up we always made it a point to have dinner together every night of the week. Sometimes it would be later than usual as we waited for football or volleyball practice to end. But we made it a priority. It was important to us to make time to check in, just to be around each other.

Now that both our kids are grown and out on their own, we miss those times. We still love that whenever it is possible to gather the family together, usually around Holidays or special occasions, we make sure to have a big family dinner together.

“The family that eats together thrives together,”

Dr. Vanessa Lapointe, psychologist and parenting expert.

It’s no wonder that one of our favorite TV shows is Blue Bloods. Every episode incorporates a Sunday family dinner scene that often leads to a discussion about their personal life or work. Watching the multiple generations around the dinner table share their many different perspectives reinforces the importance of the family dinner routine we have always made a priority.

As entrepreneurs, we hear a lot about achieving a good work/life balance. We all have busy schedules — work to do, errands to run, kids to shuttle around — but I highly recommend that for a few hours, whether it’s during the week or on the weekend, that you and your family, whether you have kids at home or not, take a break from it all and gather around the dinner table together.

Bob Repass
Managing Director

Stay up to Speed with Eddie

Don’t Wait Until 59 1/2 to Invest Your Money and Build Wealth

by Eddie Speed

There will always be financial hurdles in life. Since retirement is the last financial hurdle you face, it’s the last thing young people think about.

People in their 20s and 30s are focused on earlier financial hurdles like buying their first house, paying off debts, starting a family, and saving for private schools or college educations. With so many other hurdles to jump before retirement, young people figure they’ll slowly put money into a retirement account that you can’t touch without a stiff penalty until you’re 59½.

Or can you?

Our #1 strategy for building wealth combines two elements that come together like nitro and glycerin to make notes the perfect investment for young people starting out in life. Those two elements are partials funded by penalty-free money from certain types of self-directed retirement accounts that I’ll explain later. But first let me tell you about partials.

WHAT EXACTLY IS A “PARTIAL”?

When I started in the note business back in 1980, I was working (for free) for my wife Martha’s father and his business partner who were early pioneers in the note business. They paid me in knowledge and experience––which were far more valuable than a plain old paycheck.

They specialized in buying seller financed mortgages. They bought notes on houses, raw land, and commercial properties, then sold a lot of those notes to one of the country’s biggest consumer finance companies. This company was on the cutting edge of technology at the time, because it was one of the first finance companies with a computer system.

Their system was built to handle consumer loans instead of mortgages, so it would only accept loans up to 15 years which was the maximum length for most consumer loans. This company had a huge checkbook, but all their loans had to fit inside their box and their box only held 15 years.

This was a problem because only a small portion of my father-in-law’s notes were 15-year mortgages, so it greatly restricted their ability to sell notes to this company.

That problem turned out to be the grain of sand that irritated the oyster that produced the pearl called “partials.”

They realized they could sell the first 15 years of payments on a 30-year note to a front-end lienholder, then after 15 years the payments would begin coming to them as the back-end lienholder. This is how the partial was invented.

Very few 15-year mortgages went full term because most people would move again and pay off the note before that; which meant the back-end lienholder rarely had to wait until payment #181 to get the rest of their money. As soon as a note was paid off, the back-end lienholder is entitled to their share of the payoff, so out of the blue they would get a surprise lump sum check in the mail for around $25K, $50K, or more.

In my note buying company we did this around 20,000 times from 1980 to about 2003. It worked as an incredible wealth builder then––and still does today!

In today’s NoteSchool classes we have students at every level, from beginners to rock-star real estate investors who do 100 deals a year. (The rock-stars are there because they used to do 150 deals a year but their conversion rate is down and marketing costs are up, so they need some new strategies.) As soon as we start explaining the wealth-building potential of partials, you can see rock-stars’ ears perk up and hear a pin drop.

ACCESS MONEY FROM THESE TWO RETIREMENT ACCOUNTS WITH NO PENALTY AT ANY AGE!

Young investors are turned off by the idea of accessing money from their Roth IRA or 401K because they don’t want to pay the big penalty.

But there are two types of self-directed retirement accounts where you can access your money at any age with no penalty!

I’m talking about the Coverdell Education Savings Account (ESA) or a Health Savings Account (HSA). Deposits and earnings are tax-deferred just like a Roth IRA or 401K. But since there’s no penalty for withdrawing money, they’re a perfect funding source to invest in partials.

Say you withdraw $1,000 from your Coverdell ESA or your HSA. You might pay $300 in taxes for your withdrawal, but then you leverage your $700 with money from a passive investor and turn it into $40K, $60K, $80K, or more within 10 years––and pay no tax on what you earn! It’s the perfect wealth-builder for retirement, or for your kids’ or grandkids’ education, or for future medical expenses in your old age.

My wife Martha does this almost exclusively. She uses leveraging strategies we teach to turn a small amount of money into a huge amount of future wealth.

READY FOR YOUR NEXT FINANCIAL HURDLE?

I’m focused more than ever on showing young folks how they can make money now and/or build wealth for later. That “and/or” is what makes notes so appealing and unique among all investment vehicles. We teach you how to architect note deals to make money now for those early hurdles in life, and how to structure deals to build wealth later for hurdles down the road. You can also do a combination to get some money now and some later.

Whether your next financial hurdle is your first house or retirement, partials funded with penalty-free withdrawals from your Coverdell ESA, or Health Savings Account can help you clear it by a mile. Some of our youngest students are getting insane returns on their investments, and we can prove it with more case studies than you can shake a stick at.

Here’s to our next case study being about you!

Capital Markets Update

Turning Monetary Gifts into Learning Experiences for Children

By: Ryan Parson

Most parents want to help their children financially, but not by handing over cash with no strings attached. Instead, parents should consider using monetary gifts as a teaching opportunity. Helping your children learn how to be smart savers could be the best gift that you ever give them.

A generation ago, many parents let their kids open a checking account when they became teenagers, and those checkbook lessons were invaluable. Having that account, balancing your own checkbook, and making sure you didn’t bounce checks helped us learn smart money habits at a young age. But there are other ways too.

Here are a few suggestions on how to turn a gift of money into a learning experience for your children.

Checking Account

Open an account under your juvenile children’s names, deposit funds as appropriate, and then let the children manage their own accounts. Managing these accounts is a great way to teach budgeting skills, balancing a checkbook, and saving for a rainy day.

529 Plans

Paying for college is something that most parents want to do for their children, so why not turn it into a learning experience? With a 529 plan, you put away money over time in investments to help fund an education. These plans, run by states, are typically flexible, low maintenance and offer a variety of state and federal tax benefits.

You can use a 529 plan to teach younger children about saving, and you can gradually bring them in on the investment selection process as they get older.

Roth IRAs

Open a Roth individual retirement account (IRA) for your kid’s retirement. While it might be tough to convince a teenager to invest part of his or her paycheck, it isn’t required that IRA contributions have to come from your child’s earnings.

As long as your child has earned income, you can make the contribution for them up to the maximum they are eligible to contribute. This is a great way for kids to learn about investing and will give them a significant head start on their retirement.

Custody Accounts

Give money through a custodial account. If you don’t want to dedicate gifts toward a specific goal like college or retirement, then a Uniform Gift to Minors Act or Uniform Transfer to Minors Act custodial account is a great option. These accounts allow you to give minors monetary gifts that are tax-free.

They are available at most financial institutions and allow the custodian, usually a parent, to maintain control of the assets until the child is old enough to take custody of them.

Teach Children to Fish

Lessons in financial responsibility may not be as much fun as large, lump sums of cash, but they are significantly more valuable.

Adapt the old proverb on self-reliance to read: “Give your children a fish and you feed them for a day. Teach your children to fish and you feed them for a lifetime.”

To your financial success!

The Trading Corner

Fight for Financial Independence

By: Tracy Z. Rewey

We won the lottery. We were born in the USA.

Daily, we enjoy liberties others are still fighting to achieve. July is a month full of opportunities to appreciate these freedoms as we celebrate our country’s independence.

Freedom to worship.

Freedom to vote.

Freedom to speak our minds.

Freedom of financial independence.

Now before you take me to task, I realize that last one isn’t technically a civil liberty… but it should be.

The ability to control our own destiny and create financial independence is a core freedom.

We won the lottery a second time. We know the power of note investing! While knowledge is critical, it requires consistent action. Will we fight for our financial independence like our forefathers fought for our country?

Each month we highlight three assets purchased on the NotesDirect Trading platform.  More than just numbers and analysis, it’s a celebration of people winning a victory towards financial freedom!

Warren OH Performing – Sold

BPO $92,500 Nov 2018

UPB $64,260 @ 8.5%, $494.71/mo, 358 months

Purchase Price $52,500 (82% of UPB)

Discount $11,760

LTV 69%

ITV 57%

Anticipated Yield 10.86%

Altoona FL Performing – Sold

BPO $141,000 April 2019

UPB $33,072 @ 9.9%, $293.60/mo,  323 months

Purchase Price $31,505 (95% of UPB)

Discount $1,567

LTV 23%

ITV 22%

Anticipated Yield 10.51%

Richmond VA Performing – Sold

BPO $68,900 Jan 2017

UPB $56,778 @ 7%, $385.88/mo,  336 months

Purchase Price $44,000 (77% of UPB)

Discount $12,778

LTV 82%

ITV 64%

Anticipated Yield 9.85%

Happy Note Investing,

Tracy Z Rewey

[email protected]

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