The above picture shows a sail boat moving from the Chesapeake Bay into the Susquehanna River. The red marker marks the river and bay dividing line.
In 2013, I took my 274.292% profit that I have been accumulating since 2009 from my IRA Junk Bond investments and started looking for a place to retire. I watched Havre de Grace, Maryland grow from a small shipping port in the early 1980s to a resort retirement City of today. In a private area of the City, I found a place that was reduced in a short sell. Its 2006 price was $307,000. It was reduced in price by 53.746%. This property is in Havre de Grace, MD. This is the 4th house that I bought in my life time.
I only put up $28,000 to get my 274.292% return while the housing bust created the 53.746% wind fall. As a result, I got this property.
What is a short sale?
A short sale allows you the seller, to sell a home for less than the amount owed on a mortgage and release the sellers obligation to repay the primary mortgage balance. This is done in most cases to avoid a foreclosure sale. In this case, the seller is not going to have to pay $229,984.93 of unpaid obligations.
What did I get for my money?
I can sit out here by the bay and watch the ships go by in the small park on the shore. This is about 300 feet from my house.
Both pictures are some of the common areas where I live. I can sit on the bay if I want. I can take a train about 10 miles to the next town;
Amtrak
18 W Bel Air Ave.
Aberdeen, MD 21001
The train will take me anywhere I want to go; Miami, Richmond, New York, Philadelphia, Chicago, Harrisburg, Pittsburgh, the west coast.
I can take a boat to Baltimore, Annapolis, or Washington DC.
The link above will show you our seaplane port. I can take a seaplane from the Havre de Grace Seaplane Base down the street about one half to one mile from the house. I can fly to Baltimore International Airport to go any where I want. On the way home, I can take the seaplane home, land in the bay and walk home.
By the way, I live 2 miles from the famous Havre de Grace light house.
This is in a lower upper class neighborhood, next to a upper upper class neighborhood. So we are the poor people in the area.
Let me show you around my new neighborhood. The place where I live is called Seneca Pointe.
As you can see, it is a private neighborhood with private streets for residents and guests only. Let me show you around my place.
This is the view from my side balcony. I can see the Chesapeake Bay. I also have a side parking lot for visitors.
For my car(s), I have a two car garage. You can see the side balcony to the left of the picture.
Here is another picture of the side balcony. You can see that to get on it, you have to go through the sliding class doors. The back balcony is to the left of the picture. That balcony over looks;
the swimming pool. The pool is in a hidden quiet place with a fence around it. I can sit on the back balcony and watch the people in the pool area.
Here is the Living Room and Dinning Room area. The dog is not included.
Here is a picture of the bar in the kitchen. You can see the white sheet to the left, that is the double doors that go out into the side balcony over looking Chesapeake Bay. The right sheet hides the second double doors that goes out to the other balcony over looking the swimming pool.
This is the kitchen.
This is the view looking at the front door and hall closets.
Here is the Hall Bathroom.
This is the Master Bathroom off the Master Bedroom.
This is the Master Bedroom. It also has a set of doors that opens up over looking the swimming pool.
This is the Second Bedroom.
Fair Credit (620-649)
Conclusion
This is the view from my side balcony. I can see the Chesapeake Bay. I also have a side parking lot for visitors.
How did all this come about?
You are looking at these pictures and wonder how I can live in a neighborhood with upper managers of corporations? Two streets over are people of second generation wealth. No, many do not live here all the time. Many live where they feel like living with two, three, or four homes. Many of these people started with families that had power or some wealth. They just added to that power or wealth. This is what I have been telling you in my blogs. You can start the family trend and it can continue on with your next generation.
I started planning my wealth at age 8. I did not care to keep all the money that I made but lived so that I did not have to want anything. But since I was not coming from a family or environment that teaches such behavior, I had to seek out such an education on my own. At 8, my father took me down to People’s Bank in Homestead, Pa. and opened a trust savings account for me. This was a good way for me to learn how the banking system worked. The steel mills are gone, the town is not the same as before, but my elementary banking education is still with me. I set up an outline for my life plan;
- Get Baptized
- Get my driver’s license
- Learn a trade or profession
- Get married
- Buy a house
- Have Children
- Retire
- Die
Basically, this is what I have planned at age 8. I filled in the blanks as time went on. I made my life plan and worked my life plan.
As I learned about banking, I also read the financial pages of the local newspaper and taught myself how to read the Stock and Bond Pages. I started my own lawn business and employed two people. I was pretty much independent by the time I was 18 years old. By that time I had a technical trade in the computer industry. I was making good money. All I had to do was learn what the industry was looking for in an employee. After the problem of getting a high salary job was accomplished, I got married and continued working toward my BS Degree. While working and going to college, I bought my first house at age 21. At the same time, I learned about the junk bond market.
I found out that what the media was telling people and how money was being made was two different stories. Reaching out to other people in other societies also proved to be fruitful as far as investing. I did not go to college just to say that I have a degree. I went to college to learn how to make money and stop money from leaving my pockets. In college, I took such electives as ” Intro to Marketing, Business Law 1 and 2”, Commodities and Securities, Introduction to Finance, Economic History, “Real-estate 1 and , 2” and “Economics 1 and 2.” I started investing money at age 21 and by the time Commodities and Securities class came around, I strated teaching it. The professor gave my name to a brokerage firm telling them that I should be one of their brokers. They called me in to hand me a job but I turned it down. I am successful because I know what to buy. A brokerage firm tells a broker what to sell to the public. In that arrangement, I would not be able to sleep at night.
I learned that you have to live your own life. You can’t buy the latest thing that comes out and increase your standard of living. If you do, all your wealth will go toward someone else. You are just working as one of the cogs in the world economic engine if you follow society. In the end, you will have nothing. The upper class controls society through the media. They tell you what you should spend your money on. Your friends may talk about you and call you all kinds of names because that is how society trains them to act toward someone who is not spending all their money and living off of credit cards. Making people act in alliance with the rich people's interest is how the rich become richer and the poor become poorer. That is why people follow the "Jones." Who says that the "Jones" are financially behaving correctly?
To reach your objectives, you can’t follow them, you have to follow your plan.
To reach your objectives, you can’t follow them, you have to follow your plan.
Daughter Stephanie Tulloch MBA
The economy started to change at the turn of the century. I had to live on my savings while putting my children through college. One child finished and graduated with no debt. She went on to get her MBA and became very successful. I got a job with the state making a modest salary. By 2008 the US economy went completely into the toilet. The country was in danger of an economic collapse. This is when my college and self-education came into the forefront. The economic situation looked very much like the great depression of the 1930s. In that depression, the bond market greatly increased in value, a long bull market in bonds. This is when I borrow money and put my own money into the Junk Bond Market and started making over 50% the first year on my money. Knowing how money compounds, it only took 4 years to accumulate real money.
In the Great Depression, real estate prices collapsed. That is what I expected this time around. I was not disappointed. You see the results. I bought a nice piece of property at a greatly reduced price in a great neighborhood.
What About Credit?
I have met many people who thought it was a badge of honor, telling me that "I know my credit is bad." So what they are telling me is that their word is no good. Many of these people claim to be followers of Jesus. Yea right!
If your credit is no good then how can you conduct business? If you can't be trusted then you can't raise money and banks will not trust you. Why would anyone lend a person any money that can't keep their word? A bad credit score can be a sign that a person can't keep their word. Factors that can damage your credit report include late payments or unfavorable credit card use. An absence of credit references does not mean you have bad credit. It means that you have to build your credit so that you can have good or excellent credit.
When studying banks, I learned how banks conduct business lending money. I learned what they looked for in a customer. I learned about credit ratings and credit reporting. I put myself in a position where I am able to keep the highest credit rating possible. I worked all my life to keep and maintain an excellent credit rating. You never know when it will come in handy. I also made sure that I learned who the loan officers are in my bank. I made sure they knew me.
If you took my course on investing or if you read my blogs on Standard and Poor's credit ratings then you know that this is how investors rate the risk of investing in corporations. I told you that "AAA" through "A" are the safest bonds when it comes to business risk of these companies. When banks invest in consumers they use the consumer's credit score to figure out how risky it would be to invest in that person. The consumer with the best credit scores earn the lowest interest rates or cost of borrowing money. The consumer with a fair credit rating pay "loan shark" rates. Here is why a person with an excellent rating pays less over all for buying the same product than the person with the fair credit rating over all.
If you took my course on investing or if you read my blogs on Standard and Poor's credit ratings then you know that this is how investors rate the risk of investing in corporations. I told you that "AAA" through "A" are the safest bonds when it comes to business risk of these companies. When banks invest in consumers they use the consumer's credit score to figure out how risky it would be to invest in that person. The consumer with the best credit scores earn the lowest interest rates or cost of borrowing money. The consumer with a fair credit rating pay "loan shark" rates. Here is why a person with an excellent rating pays less over all for buying the same product than the person with the fair credit rating over all.
Most scores range from 349 to
900, with the majority of people in the 600 to 800 range. To get the most favorable
interest rates, you'll need a score of 720 or higher. In terms of interest
rates, on average, a person with a credit score of 520 will get interest rates
on loans that are three to four percentage points higher than rates given to a
person with a score of 720.
At the beginning of 2013, my credit score was 786 meaning that my
credit is excellent.
A credit score is a numerical expression based on a
level analysis of a person's credit files, to represent the creditworthiness of that person. A credit score is
primarily based on credit report information typically sourced from credit bureaus.
The following consumer reporting agency provided a credit score or credit file that my bank used in connection with my home loan:
Global HR Research
2407 Park Drive
Harrisburg, Pa. 17110
(800) 790-1205
Credit Score: 812
Range of Possible Scores: 300 to 850
The following key factors adversely affected my credit score:
- 004 Lack of recent installment loan information
- 014 Length of time accounts have been established
This Credit Score was created on 07-02-2013.
I have a credit score from Global HR Research of 812 out of 850 and I am still impacted by two negative “dings” on my report. If I open more installment loans and keep them open for a longer period of time, my score would go up.
But is it worth it? Once you are above 750 you are lumped into a group that goes from 750 to 850.
Lenders,
such as banks and credit card companies, use credit
scores to evaluate the potential risk posed by lending money to consumers and
to mitigate losses due to bad debt. Lenders use
credit scores to determine who qualifies for a loan, at what interest rate,
and what credit limits. Lenders also use credit scores to determine which
customers are likely to bring in the most revenue. The use of credit or identity scoring prior to authorizing access or
granting credit is an implementation of a trusted system.
The General Consumer Credit Rating System
Great or Excellent Credit (750-900)
You're most
likely in the top 5%! The very best credit rates usually go to those who are
above 750. This means you're probably a low risk borrower.
Good Credit (650-749)
A score in this range
will most likely qualify you for the best rate your lender has to offer. This
range typically represents a consumer with no late mortgage payments and no
more than one 30-day late payment on consumer credit.
For many
lenders, 620 is considered the dividing line between good and bad credit.
Generally speaking, a credit score above 640 is considered pretty good.
Poor Credit (349-619)
Nearly 20%
of the U.S. population has a credit score under 620. Fall below that and you
are likely to be labeled a high risk for a loan or line of credit.
You can find more information in my blogs on credit.
I needed my credit!
When buying this property, the dates were not lining up correctly. I needed a $35,000 loan for about 30 days. I turned to my local Harrisburg bank for help. The loan officer said that properties in Havre de Grace, MD. was out of the banks business area. However he made an exception in my case because he knows me and knew the excellent shape of my financial condition as well as my credit report. He said, "Darnell, I am going to help you out!"
Conclusion
I am telling you all this because you can do the same thing. If you have been reading my blogs for the past 4 years then you already have the information to economically improve your life. But it is up to you to do it. No one is going to hold your hand and give it to you.
