How to Bet on the Future and Win! MOST of the Time.

Morning Folks!!

Life is about betting on the future. That the future will be better than the past. It always has been, but will it always be? 'There is nothing to fear but fear itself.' See you can be cautious without being fearful. Sometimes they can be confused.

Let's be clear, it is my humble opinion that the reason we are where we are in the economy as far as the USA is one thing. The entire system is fucked up and broken and the current crew ain't gonna fix it.

I like investing in real estate. It's my hobby and my passion next to domain names. Getting a loan over the last few years has been a nightmare. It was not long ago that if you put 50% down on a property and you had good credit there was little question. A smart bank would pray that you defaulted.

I started scanning my papers back in January. I have about 70 electronic files now. Well over 600 pages in documents. So when I finally got a call from the broker I have used for the last 5-10 years saying there was money again, I was ready to go. But let me tell you, the procedure is crazy and everyone knows it. Paperwork the likes you have never seen before in an electronic society.

Banks are no longer run by bankers. They are run by an entire new crew of folks and thought because of all the restraints. They are so controlled by the government because of the bad loans that the government forced them to make before the bubble burst.

Government has a role to play as a safety net, but when they get in the way of business, you have what we have. Reminds me of a burning city and a fiddle. History is repeating itself. But life is about the future and embracing it not fear and hiding from it.

So as a businessman I make certain assumptions. I look at trends. I look at moods. I look at numbers. I look at a host of things and I make assumptions based on the evidence I have accumulated. Then I look to history for EXACT parallels. I assume a starting point and I assume a goal. I factor in everything relevant and clear away the irrelevant.

I don't draw conclusions and assumptions by one or even two parallels. I have many. The more I have the greater chance that assumption will turn into reality and THAT is how you make money once I marry them with numbers that I also assemble on any given subject. That is how you bet on the future and win. That is how you can be waiting at the finish line instead of searching for it.

If I go to the next step I would have to get somewhat political by stating how I see things happening in November. Hindsight will always be 20/20. But why don't folks see it now? Why do they ignore or don't even look to history? There is ample evidence of how this is going to play out and biting nail close ain't going to be one of them. This log jam is about to be busted wide open.

The recovery will not happen overnight but the mood will change. It will change from 2/3 empty to 1/3 full. The goal is getting back to 50/50 and that can never happen when fear is guiding so many. Fear has to motivate folks like a rocket not hold them back like a rock.

Have a GREAT Day!

Rick Schwartz

39 thoughts on “How to Bet on the Future and Win! MOST of the Time.

  1. Scott Alliy

    I can’t speak to the past since I never engaged in and thus missed out on the park and click era. I can speak to the future with as you know a fair amount of vision and opinion LOL.
    I see One and One and who just signed a 10 year tour sponsorship deal with the PGA and I see them and others with a product, a service and a need to stay solvent.
    I also read TechCrunch and other startup related electronic rags and see a flurry of VC activity daily.
    Finally I see new search devices from desktops to tablets to mobile phones to internet capable readers etc. and I see new search techniques like voice search being introduced.
    From this I glean an opportunity for end user sales since all of the above need a name and brand and in the case of the host developers they need land (i.e. domain names) upon which to build their own business and realize their own hopes dreams and visions.
    It would be inconceiveable that in the land of the free that the population will stay paralyzed by the dark cloud of fear currently hanging over us.
    The only question then IMO is not if but when the commodity called domains will be in the spotlight.
    I liken where we are at to home building supply companies. Does anyone reading this article believe that because housing construction is down that no more houses will ever be built again? Of course not and when housing construction begins anew than land sales will rise in value and number as a result.
    Stay patient and stay tuned 2013 and beyond is coming soon to a world near you!

  2. Scott Alliy

    Btw Rick
    I forgot to mention one other aspect of human nature that IMO bodes well for domain name sales activity. That is the emotional factor.
    How many reports have I read about purchased domain names that one year later remain inactive or undeveloped. The moral and the truth is as all successful salespeople know”people don’t buy what they need they buy what they want” or in many cases think they want.
    What was that you said about when you see the world through Johns eyes?

  3. Kevin

    The real estate market will be a mess and a crap shoot investment for a long time.
    Most folks have damaged credit, not enough for the higher % required down payment, current homes they can’t get out of to go and buy another, not enough income, and on and on. I have a friend with pristine credit who bought a small home in the $200k range and they put her through the ringer for weeks before she finally got approved. She said it was the most invasive and worst qualifying process she’d ever been through.
    The other factor that is really going to impact the real estate market is the downward trend in the birthrates and the younger kids not getting married as early and thus not getting into first homes as soon like prior generations.
    Personally, I wouldn’t touch real estate as a safe investment with a 10 foot pole. It’ll never be like it was. Far too much risk now.
    As for opportunities, best thing is to always”Create Your Own!”.
    Brainstorm new ideas and innovate, innovate, innovate! Look where there are problems in any industry and come up with solutions.

  4. KA

    “Look where there are problems”
    – That’s the key. It’s really that simple, and today simpler than ever. All you need to do is go on message boards, especially consumer protection boards, and see what people are complaining about.

  5. Show us the money..

    You’re wrong on the property score.
    There is always money to be made. Esp in an inflation proof investment such as property.
    Couple of recent investments we have made. 1) Cost 66k with a likely additional spend of around 30k, which will be worth 250-330k on completion. 2) Cost 228k with likely addition spend of around 30k which will be worth around 420k on completion.
    Admittedly we are a family of builders but there’s plenty of money to be made, credit is extremely difficult esp on the non habital/structually inadequate properties we are buying. But that just begs the question to bypass the banks and do deals directly with the sellers. They have this stock they want to liquate its just a matter of using them as financiers because they are already by having property sitting around being unproductive. Hence, thats why in a few months I am going to have some discussions with a major portfolio holder and propose a JV. They will be the financier and rather than interest they will get a proportion of the sales proceeds.
    Lastly, property is the place where surplus profits and excess liquity end up. Inflation will be begien irrespective of QE monetary policy given the open supply side that keeps a lid on it. Thats why property increases faster than inflation. The next boom will be bigger than the previous and the bust likely moreso. The next boom will start as we see property being bought up and that will power the whole thing again.

  6. Rick Schwartz

    The last finance deal I did in June was 75% down and still had to go thru the wringer.
    The bank should be praying I default. That’s why they lend money to begin with. Especially at 2.875% for a 15 year note and still declining.
    That’s why right now I would finance somebody to buy my property next door. A few hundred grand down 5% loan and I pray they default. I don’t even have to do a credit check. Maybe a criminal check. lol. My brother sold a restaurant back in the 1980’s. He got $60K cash. The new buyers were clueless and went belly up in 6 weeks. The bank called and begged my brother to take it back. He walked back in the door in a much better position than when he left.
    Today in so many sectors, their hands are tied. They can’t do what is common sense. That is what is killing things. Once that is resolved, things will bounce back and real estate will lead the way. It always does. People want to own their own homes.
    It always comes down to a”Mathematical equation” and circumstance. That equation/circumstance does not work all the time, but when it does, you got to jump all over it!
    I am bullish on real estate. But I would say there are places not to invest. There are places to invest. The society is changing and is mobile and that gives folks choices they never had before. Figure out where they are likely to go.


    Real Estate is a disaster as far as investments go, imho.
    1) My sister in law has a mortgage with Bank of America and hasnt paid in 4 years. Still hasn’t been kicked out. Guess they lost the note? — or MERS Title system is a mess. Either way, no integrity in the system to buy DEBT BASED ASSETTS.
    2) What happens when interest rates rise? Which they will. MATHEMATICALLY,….your house will sell for less as anyone who wants to finance can only make the payments with a lower loan principal amount [supply/demand].
    3) Who are the baby boomers going to sell houses to? Not my generation. THERE ARE NO JOBS.
    As a general rule, you want to be in non-debt backed assets. Gold, hard assets like diamonds, art, coins, domains NOT a market tied to the financial system of interest rates etc………

  8. Shane

    I’ve found that almost all my loans have to be secured with real estate at this point. Nobody wants to take risk on things they don’t understand. Inventory, buildings and less than liquid assets are scary to bankers. This is the time when the people that have the ability to borrow money will gain the most. And paid off land will have bankers drooling over you. It’s a pain in the ass and the paperwork is still ridiculous but real estate is cheap and they are giving money away. Using paid off real estate to borrow to buy cheap land is in my opinion, going to pay off handsomely. Anyone bitching about getting to borrow money at under 3% is being silly. In these times, having the ability to borrow money puts you head and shoulders above 99% of the people.

  9. Rick Schwartz

    I have 3 properties that I own free and clear. They are to the point where that has become a negative!
    You would think all I would have to do is walk in, let them secure a loan with an impressive portfolio of paid off waterfront properties and that’s that. No brainer! You could secure the loan with CASH and it would not be good enough. I’ve tried. But at 2.8% I will just jump through whatever hoops they have. lol
    See, I am old enough to remember 21% interest rates. So cheap rates and cheap prices is something I have not seen in my lifetime. Getting a home or any property today can be a once in a lifetime opportunity IF you buy smart.
    Screw Jobs! One of the best lines in the”Social Network” is the character playing the President of Harvard, Lawrence Summers” lecturing the twins.”From Harvard you don’t go out and get jobs, you go out and CREATE jobs.”
    Lastly….ALL real estate is local. Very local. From state to state, city to city, neighborhood by neighborhood and building by building. Go look at South Beach. The hottest market on earth right now. Probably better there than Toledo, Ohio.


    as someone in the housing business i can continue to repeat the mantra: jobs jobs jobs jobs jobs. most people are not feeling too secure right now with regard to their job situation… we know the story. until this is rectified housing will be a mess for several more years… maybe even another 5-10 years. if the President gets reelected, the House likely stays conservative and maybe the Senate goes that way too? either way – if things stay the same this November then we are literally looking at another 5 years of gridlock in DC and more of the same + another 5 trillion in debt. talk about a”lost” decade. we desperately need change in DC. i have no idea how smart people could want to double down on stupid… unless you have given up and are on the dole as many are.

  11. Rich

    “Banks are no longer run by bankers. They are run by an entire new crew of folks and thought because of all the restraints. They are so controlled by the government because of the bad loans that the government forced them to make before the bubble burst.”
    I disagree with you Rick
    I’ve been in the real estate for 24 yrs.
    The bankers are running this country and and we are in this mess because the stupid laws gov.pass out because of the bankers.
    All this mess was orchestrated by nobody else but the bankers.
    I came it this country ran out by the comunists/socialists to find my self back to square one.
    Socialism that where we are heading anyway.8,000,000 homes are under water own(hypothetically speaking) by the government.
    Back to the subject you can still make money in real estate.My buying houses in Chicago area Maywood for $10,000 -25,000 pay cash in full in one year term the house is been paid back from rentals.
    Two apt.each house.The taxes are bigger then my initial down payment of $5,000(7,000 credit due at the closing for previous taxes)
    Very hard to get out of this catch 22 situation.
    I had to make pymts $33,000 every month to float meanwhile they did not loan the people,same thing what you are experiencing now.
    They force me to go broke by not lending money to my customers.
    The sooner the bankers are lending the sooner we are out of the recession and things will be back to normal.

  12. Rick Schwartz

    “The sooner the bankers are lending the sooner we are out of the recession and things will be back to normal.”
    Absolutely agree!!
    “I came it this country ran out by the comunists/socialists to find my self back to square one.”
    Exactly my point! Those that came here understand where we are headed without an abrupt change. Some born here have yet to see the difference.

  13. MARTIN

    Democrat/Republican both serve the same masters. They are both 2 parts of the same statist system (collectivists / fascists).
    Only REAL change can get this system to move in the right direction.
    Mitt Romney is ill-equipped to solve the problem of the Money Masters, he ain’t gunna go after the true source of ill. The Federal Reserve.
    Until the people take back the power to issue money there will be no recovery.
    We are thus, imho a long long long way from a real sustainable economic renaissance.

  14. Rick Schwartz

    I believe we are at a”Niagara Falls Moment”
    We know things are getting worse. The captain can’t contain it and is going full speed ahead towards the falls. The choice is clear. Anybody but the current Captain. Anything but the current direction. That’s the election, that’s just one of a dozen parallels that point to a specific outcome.

  15. Rick Schwartz

    I think you could describe the political direction and the 2 parties over the past 50 years as one going Northeast as opposed to the other going North West. It was the same basic direction with a veer to the left or a veer to the right. American’s have always been smart enough to know if you always go right or you always go left you can ONLY go in circles. Try it with a plane and see how far you get! Nowhere.
    So sometimes we go NE and sometimes NW but in general that takes us forward.
    We have been in a period where it is not North East or North West. It has been polarized East and West.
    That is the situation regardless of which way any of us lean. We are headed one way and the choice then becomes how to get it back on the NE and the NW because at that point there is cooperation, things move forward and that is how you get the money to flow back and have confidence. That and getting the debt under control. That’s ridiculous. $4 billion a day pissed away on interest. I don’t care who is at fault, the day that gets under control is the day that you will see lots of jobs. Tell me that personal debt is not or never been a concern of yours? It consumes us whether for a household or a business. We got to make ends meet. We don’t have unlimited credit and we can’t print money. So the dollars we think we are saving might be actually evaporating.
    The debt is like all of us having to smoke cigarettes whether we want to or not. And every passing day makes it harder to make those ends meet.

  16. John

    Why on earth would you want to own real estate when you have the best real estate one can have? Even when they are cash paid they’re a waste of time dealing with idiot tenants from the smallest of things (window handles, door knobs, toilet seats, etc) to larger things (like yards getting dug up for sewage pipes, roofs, windows, etc). Even with depreciation for taxes unless one gets them for way low prices and has a 10 year horizon they don’t make enough. One needs to scale in that sector with 8 or more properties to make it worth your time. Unless you have a competent property manager (which you pay a piece) handling things it’s take you away from domains where your bread is buttered. That or living in a 3 flat or large apartment complex where you are on site to handle issues (even then its time consuming). I’m putting my homes in Illinois on the market and getting back to concentrating on trading and domains.

  17. Rick Schwartz

    Cuz you can’t live inside a domain name. No garage. No view. ;-)
    I agree that domains are the best real estate in the world. But I always had a motto”Turning erealestate into Real real estate. None of my properties are rented out. They are for my personal pleasure. But it is also a backup plan. I have 5 total properties. If I started over again today with nothing but those 5 properties, I would still never have to work again and I would still make more annually than I ever dreamed of before the Internet and domain names . So it is a security issue as well.
    I am also SURE I could trade my real property for some very nice domain names. :-)

  18. Anthony

    I have no vested interest in either party.
    The behavior of the GOP has been disgraceful over the last few years. It is as if they have said ‘vote for us or we will balls things up for everyone out of spite next time around’. Its like a kid throwing his toys out the pram. If the GOP win the election it will be rubber stamping this policy and you may as well just have one party.
    I understand what you are saying Rick about a bank wanting you to default but I do not agree for two reasons:
    1. A mortgage is meant to be the money of the many entrusted unto the few who pay back with interest to then lend out again. Half the problems, in fact all the problems we have now are because of this simple value being eroded. Maybe you (Rick) should not have to go through the ringer to get a mortgage but a first time buyer should, thats the whole point. A bank manager should be treating the money in the vault just the same way he would his own. Now you (Rick) should be able to go to your bank manager and he would shake your hand ask about the wife, the kids and the dog and approve your loan straight away, however most young people have never meet the bank manager and for most older people it is just a distant memory.
    2. A bank may want you to default but a bank isnt going to want 100,000 to default because their XXX,XXX loans turn into XX,XXX value.
    The real problem we have had over the last couple of years comes down to job cuts which have nothing to do with confidence or a reaction to slower sales etc but are based solely in reacting to markets. I am not saying that some companies didnt need to cut however the majority collectively did so for entirely the wrong reasons. When a pension fund who has a 10% stake leans on a CEO who is earning 9 figures a year and tells him to jump, his first consideration is unsurprisingly not his workers. This scenario has played out globally and individually it looks clever but when you look at the impact as a whole its been as effective as everyone shoveling sand into the sea.

  19. Rich

    ” Even when they are cash paid they’re a waste of time dealing with idiot tenants from the smallest of things (window handles, door knobs, toilet seats, etc) to larger things (like yards getting dug up for sewage pipes, roofs, windows, etc).”
    Not every body is got it made,some people have to do all of the above.
    I came in this country with 6 suitcases(six people) 20 yrs later a was multi millionaire.Why? because a did not mind all of the above.
    I lost almost everything.
    Two thing i did not lose :faith and hope!
    Very soon i will be back on the horse riding again.

  20. MARTIN

    @ Anthony –
    Bill Clinton [and George Bush too] told us all how great Globalization would be for Americans. NAFTA and GATT were pushed down all our throats by the Clinton Administration.
    Ross Perot who told America of ‘the giant sucking sound’ as jobs left was made fun of by the propagandist media.
    Fact is, this country has been betrayed by the left and the right.
    And it aint gunnna get better until people wise up to the NWO plan.

  21. Anthony

    Martin –
    Agreed. Globalization produces a levelling of wages between countries that trade and where there are no trade barriers its a proven occurence that wages in the two countries find parity, which is great if your wage used to be $1 a day but not so much if it was $20 an hour.

  22. Show us the money..

    Wish I could say all my theory on the problem and its solution, but I am seriously starting to build a thesis / book and hopefully will have it done by the end of next year.
    But the crux of the matter is that Western Nations allowed the absolute deluge of China product which erroded manufacturing jobs and sent inflation lower. Lower inflation translated into lower interest costs which then kicked off a major personal asset boom (housing) which then made everyone feel like consuming MORE imports and providing additional jobs even though the nation SHOULD have been downturning.
    That is why now we are having a major downturn.
    Understand the problem and think about the solution. Its not actually that difficult.

  23. Josh

    Property values went up as interest rates went down. The lower interest rates went, the higher property values went. The lower interest rates went, the more money was available for mortgages–like the water level in a pool rising. And when that wasn’t enough, everyone and their dog qualified with mortgages regardless of ability to pay.
    The days of everyone and their dog getting mortgages will not return. Real interest rates are near 0. What’s left to fill the pool?
    But commercial real estate, well that’s a little different and I think that’s what this blog post is about…

  24. Gazzip

    “Democrat/Republican both serve the same masters. They are both 2 parts of the same statist system (collectivists / fascists).”
    The Fascists running the show are the Bilderbergs, they are the real masters and they are not interested in growing the economy, they have another post-industrial plan of action and its well under way.
    Bush signed America up to UN Agenda 21, the Wildlands project will make the majority of America offbounds to all people and all private property.
    Agenda 21 For Dummies
    The NWO plan is as real as it gets but there are alot of people still in total denial.
    When they have squads of foreign UN Troops showing up on their doorstep to take their guns they will soon wake up!

  25. MARTIN

    @ Rick –
    Larry Summers is a discredited, blowhard, Keynesian asshat. His policies under the Obama Administration were an embarrassment and failure. Never saw the movie but the line you cite sounds like Bloviating Summers all right. Elitist pond scum.
    Screw Jobs! One of the best lines in the”Social Network” is the character playing the President of Harvard, Lawrence Summers” lecturing the twins.”From Harvard you don’t go out and get jobs, you go out and CREATE jobs.”

  26. MARTIN

    @ Steve C
    1776 – Revolutionary War
    1860 – Civil War
    1940 – World War 2
    2020 – ?????????

  27. John

    Love Your story. Having 5 properties for your”personal pleasure” is awesome. You need your own reality TV series. I may know someone in the industry to send your way.
    Great story. Continued Success.

  28. MicroSourcing

    You make a good point when you say the mood will change, especially after the November elections. There’s always a sense of renewal and hope when people appoint or re-appoint new leaders, and promises are made all over again.

  29. Jeff Schneider

    Hello Rick,
    I like you, like Real Estate, the Virtual Business Foundation kind.We will all look back in history and wonder why it took everyone so long to realize the absolute power of Real Estate of the Cyberspace Kind.”Old World Marketing” has done a good job of hindering the masses education on this subject.I am a convert from”Old World Marketing” that saw the light early on just like you.This article I wrote earlier in the year may just shed some valuable light. Thank you for the opportunity.
    In physical real estate the saying is Location, Location, Location! In Virtual Real Estate you have the worlds best locations wrapped into one”Virtual Business Foundation ™”. This is because the Total sum of all the Worlds best locations is contained in the world wide web. With Virtual Real Estate you are front and center and have access to the worlds highest traffic volume in all of recorded history. And unlike, Physical Real Estate, Virtual Real Estates, EXPONENTIALLY, expanding Traffic Stream never stops EVER ! So in Virtual Real Estate the key is Foundation,Foundation, Foundation !
    So which would you rather own a prime physical real estate property with access to thousands of visits, or a”Virtual Business Foundation ™”. with access to 100s of BILLIONS of visits, whose visits in actuality continue on into infinity? The world wide web is the only Business Platform in the world where this phenomenon actually occurs.No where else can you find assets of this scope and impact to compare with the virtues of Prime Virtual Real Estates unique competitive advantages. They are literally a prime real estate owners Wet Dream.
    So now that we know the powerful impact a Virtual Real Estate Business Foundation can have for any Business Owner. The next question might be of all the TLD extensions, which extension should you build your”Virtual Business Foundation ™” on? In other words which extension will give you the highest return on your investment ? The fact is, the only extension that receives the worlds highest repeat traffic volume in all of recorded history is the .COM extension. Because of this fact, the worlds largest Corporations have positioned themselves with”Virtual Business Foundations ™” in the .COM Channel, because this is where the largest perpetual stream of traffic exists. You wont find it anywhere else. Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)
    posted by Domain Master

  30. Jeff Schneider

    Hello Rick,
    Something else which may help your following. The #1 investment opportunity in the world lies in the Secondary .COM vein. The this Asset class remains far superior to anything else available anywhere.Institutional Moneys are going to accelerate into this market for the foreseeable future.
    Also there are opportunities for some of your investment capital in the stock market throughout the rest of this year.The Institutions are in the market and small investors are out. This is an extremely Bullish sign. The old saying is get in with Institutions get out when small investors are in over their head.
    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  31. Jeff Schneider

    @ Scott Alliy is what I call a Three Bagger= 3X current value potential. I own no positions in WWWW but reco. to my followers.Great company to build out the webs small business Tidal Wave dead ahead.
    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  32. Troy

    Jeff Schneider,
    What exactly do you do in the domain industry? I would love to hear about the man behind the comments. What businesses do you own? What domains are you associated with?

  33. Jeff Schneider

    Hello Rick,
    Even the Great and powerful will succumb to the coming”New World Marketing” Business practices that involve LESS Advertising and More Memorable Brandability found in ,”Virtual Business Foundations”. It is a tide that they are swimming against that they had better realize and join before they are completely Obsolesced or at least slowed down. They need to be aware of their coming competition, which they can neither stop nor avoid. Smart Businessmen are gaining in Cyberspace and this will only increase our countries bottom line and is a welcome change from Indentured Debt foisted on Businessmen By”Old World Marketing” advice that is fundamentally flawed, especially on the Web, and they know it.
    Gratefully, Jeff Schneider (Contact Group) (Metal Tiger)

  34. Bill

    Rich said:”I came in this country with 6 suitcases(six people) 20 yrs later a was multi millionaire.”
    Wow…What exactly did you have in those suitcases, anyway?


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