Over the years I've been teaching children about a simple but powerful concept—the ant philosophy. I think everybody should study ants. They have an amazing four-part philosophy, and here is the first part: ants never quit. That's a good philosophy. If they're headed somewhere and you try to stop them; they'll look for another way. They'll climb over, they'll climb under, and they'll climb around. They keep looking for another way. What a neat philosophy, to never quit looking for a way to get where you're supposed to go.
Second, ants think winter all summer. That's an important perspective. You can't be so naive as to think summer will last forever. So ants are gathering in their winter food in the middle of summer.
An ancient story says, "Don't build your house on the sand in the summer." Why do we need that advice? Because it is important to be realistic. In the summer, you've got to think storm. You've got to think rocks as you enjoy the sand and sun. Think ahead.
The third part of the ant philosophy is that ants think summer all winter. That is so important. During the winter, ants remind themselves, "This won't last long; we'll soon be out of here." And the first warm day, the ants are out. If it turns cold again, they'll dive back down, but then they come out the first warm day. They can't wait to get out.
And here's the last part of the ant philosophy. How much will an ant gather during the summer to prepare for the winter? All he possibly can. What an incredible philosophy, the "all-you-possibly-can" philosophy.
Warren Buffett says if you want to learn how to make money from the stock market you should look at how he made some money with two small real estate investments. In an excerpt published by Fortune, from his upcoming annual letter to Berkshire Hathaway shareholders, Buffett writes about his purchase of a Nebraska farm and his investment in a retail property near New York University in Manhattan. In both cases, he bought when prices were unusually low after bubbles had burst. In both cases he had no particular expertise.
And most importantly, in both cases he invested because he thought the assets would be increasingly profitable, not because he expected to sell at a higher price. "With my two small investments, I thought only of what the properties would produce and cared not at all about their daily valuations. Games are won by players who focus on the playing field—not by those whose eyes are glued to the scoreboard."
He warns against "letting the capricious and irrational behavior" of stock prices make an investor "behave irrationally as well." In addition, Buffett argues, "Forming macro opinions or listening to the macro or market predictions of others is a waste of time." When he bought the properties in 1986 and 1993, economic projections didn't matter to him. "I can't remember what the headlines or pundits were saying at the time. Whatever the chatter, corn would keep growing in Nebraska and students would flock to NYU."
As for not needing expertise, Buffett recommends a low-cost S&P 500 index fund for nonprofessionals, to "own a cross section of businesses that in aggregate are bound to do well." He also urges timid or beginning investors against going into stocks "at a time of extreme exuberance" and becoming "disillusioned when paper losses occur." "The antidote to that kind of mistiming is for an investor to accumulate shares over a long period and never sell when the news is bad and stocks are well off their highs." His bottom line fundamental advice: "Ignore the chatter, keep your costs minimal, and invest in stocks as you would in a farm."
A real estate appraisal (also known as a property valuation) refers to the process of valuing property. Knowing the market value of a property is important for several reasons:
· Property value is often used as the basis for mortgage loans
· It is often used to calculate property taxes
· It is used by seller’s to price the property
· It is used by buyer’s to negotiate on the purchase price of property
· It can be used to settle estates or divorces
The property that is being appraised is called the “subject property” and subject properties should always be appraised by a licensed professional or certified appraiser. The property appraisal is usually extensive in detail. It will describe the area in which the property is located and will also compare the property to similar properties within the same geographic area. The appraisal will also uncover any serious faults with the property, whether it has to do with the actual infrastructure, or the property’s surrounding land that could eventually affect the value. All of these details help to determine the true value of the subject being appraised.
If the property is about to be sold, the appraisal may also include an estimate of how long the property will take to sell – an especially important detail for the discounted value proposition. Appraisals may only take a few hours or days to complete. However, once an appraisal has been ordered, it may take several days for the appraisal company to make it out to the property. Property appraisers actually have busy seasons; when interest rates are low many homeowners want to refinance – which requires a property appraisal. Busy seasons often result in slower turnaround time.
A Blanket Mortgage (also called a blanket loan) is a type of home loan used to fund the purchase of more than one piece of property. Blanket loans are popular with builders and developers who buy large pieces of land to subdivide and build out. However, they’re also very popular with real estate investors because it permits them to secure multiple properties at one time with the convenience of only one loan payment.
These loans are much more popular on the commercial side, but are available to the seasoned investor as well, permitting them to buy more than one property at a time. Investors usually set up an LLC for this type of purchase, for the added protection that an LLC offers.
While traditional mortgages usually include a “due-on-sale” clause stating that once the property is sold, the outstanding mortgage debt must be paid in full, a blanket mortgage permits a “release clause,” allowing investors to sell a portion of the loan (for example, one property) and only partially repay the loan at that time.
Young Americans who want to work can’t find jobs as unemployment among 16-to-19-year-olds stands at more than three times the rate for all workers. At the same time, more teens are forsaking paid positions to concentrate on getting into college. Just one in three teens in the U.S. worked or looked for a job in January, a record-low since 1948 when the Labor Department data starts. That lack of on-the-job experience could cost future workers, who may lag behind on basic skills their parents developed waiting tables or running registers, some economists say.
“Work experience complements skill, and the combination of the two is more valuable than either one alone,” said Anthony Carnevale, director of the Georgetown University Center on Education and the Workforce. “It is more difficult to get going, to get onto the on-ramp, in the American economy than it used to be.” Teen labor-force participation plummeted during the 18-month recession that ended in June 2009 and has continued to fall, accelerating a two-decade-long decline. The drop started in the 1990s as college enrollment rates climbed. In January, 33.3 percent of those ages 16 to 19 were in the workforce, compared with 59.3 percent in 1978, the highest share on record.
What has changed “is the degree to which youth combine school and work,” economist Alicia Sasser Modestino wrote as a co-author in a December report published by the Boston Federal Reserve Bank. “Going to school has become the de-facto youth activity.” The share of 16-to-19-year-olds who cited going to school as their reason for not working rose to 89 percent in 2012 from 87.7 percent in 2000, based on the Boston Fed study’s analysis of Current Population Survey data. “They are making the bridge from schooling to the workforce later in their lives,” John Challenger, chief executive officer of Challenger, Gray & Christmas Inc. said. “Now they’re doing more homework than they used to, they join sports teams, they do more volunteer work,” he said in an interview about the Chicago-based employment consulting firm’s analysis of the teen workforce released yesterday.
Lothspeich, a senior at Charlotte Catholic High School, doesn’t hold a formal job. He does have a tae kwon do black belt, a National Honor Society membership, and acceptances to both North Carolina State University in Raleigh and the University of North Carolina at Chapel Hill. “We’ve always said, your priority is to make the grades to go college,” said Ana Lothspeich, Alex’s mother. His brother, Matthew, is 16 and also doesn’t work. “We had that conversation with them early on, as soon as they turned 16.”
For others, not working is economy-driven. The teen unemployment rate, the gauge of those looking for work and unable to find it, was 20.7 percent in January. While that’s down from a 27.3 percent peak in October 2010, it’s up from as low as 14.8 percent in 2007, before the recession began. High school counselor Jessica Vogt says she sees students who can’t find jobs sometimes dropping out of the workforce. “Some do just check out of the process,” said Vogt, who works near Richmond, Virginia, and is an officer with the Virginia School Counselor Association.
The scarcity of teen employment isn’t solely a legacy of the latest recession, Sasser Modestino said in an interview.
Jobs traditionally held by teens are “in declining industries -- where workers are being replaced by technology and/or outsourcing -- or in growing industries that appear to be employing other types of workers, such as young adults or immigrants,” the Boston Fed report said. Teens saw a broad-based decline across sectors between 2000 and 2006, the report found.
For young people who give up on work amid fewer opportunities, repercussions may follow. Idle youth, those neither in school nor working, probably face the worst penalty, said Henry Levin, a professor of economics and education at Columbia University in New York. The share of 16-to-19-year-olds not in school or at work climbed to 8.7 percent in 2010 from 7.9 percent in 2006, based on Sasser Modestino’s analysis. Sixteen- to 24-year-olds who aren’t in the workforce, training or school have lower future wages, found a 2012 paper of which Levin is a co-author. The penalty grows with time, he said.
“It sets a pattern, so that it’s not just that they’re going to bounce back,” Levin said in an interview. “You establish a lifestyle.” Those who lack work experience and don’t go to college could find jobs hard to come by upon graduation. The unemployment rate for those age 25 and older with a high school diploma was 6.5 percent in January compared with 3.2 percent for those with a bachelor’s degree. “If they’re going straight out to employment, it is a concern: employers do look for your experience,” counselor Vogt said. “I always feel better when they cross the stage at the end of the year and they already have the job.”
Forgone starter jobs probably won’t cost those who earn a college degree, said Harry Holzer, a professor of public policy at Georgetown University in Washington, and former chief economist at the U.S. Department of Labor.
“If you’re going onto college anyway, especially a four-year college, and the job you would have is serving up pizza slices, then you’re not missing out on anything important,” he said. Business leaders say applicants lack interpersonal skills: In a survey of 500 senior executives in the U.S., 44 percent of respondents cited “soft skills” such as communication and collaboration as the biggest skills deficit.
New hires who haven’t had high school jobs could miss soft skills as a result, said Christa Shapiro, a San Diego-based regional vice president at the U.S. operations of staffing firm Adecco SA, which published the survey results in September. “Your first job teaches you to show up on time, ready to work, not running through the door or getting to the parking lot at 8 o’clock,” she said. “The other soft skill, it’s the same for manufacturing as it is for IT, is that you have to be at work every day. You learn that when you have a high school job.”
Further, some teens need to work to help earn their way through college. When jobs become scarce, education can become inaccessible, said Heidi Shierholz, an economist at the Economic Policy Institute, a Washington research group funded in part by labor unions. “Teen jobs matter a lot less if you go to college, but having a work history may be the difference between putting yourself through school or not,” she said.
Carnevale, former chairman of the National Commission on Employment Policy, said as entry-level jobs have become higher- skilled and harder for teens to get, it has most disadvantaged those in lower-income households. “It’s a Catch-22: You can’t get the job because you don’t have the skills, and if you can’t get the job, you can’t get the skills,” he said. “The work experience issue gets more and more severe as you move down the income distribution.