What is your Chance to be a Millionaire?

1. What is your Chance to be a Millionaire?

2. Research Indicates • Millionaire households constituted roughly seven percent of all American households1 • OR • 40% of Americans with incomes between $25,000 and $35,000 -- and nearly one-half of respondents with an income of $15,000 to $25,000 -- thought winning the lottery would give them their retirement nest egg. 2

3. Which Camp do you want to be in and how do you do it? Part of the 7% or those hoping and praying to win the lottery?

4. What is an Amateur Investor? • Can an Amateur Investor Make a Million Dollars? • An Amateur Investor can also be a Sophisticated Investor by knowing the Sophisticated Techniques.

5. The Professional Investor • The Professional Investor can also make a Million Dollars • The Professional Investor is also a Sophisticated Investor • How can you tell the difference between an Amateur and a Professional Investor? • There is one very important tool that the Professional Investor has that the Amateur Investor does not…. What is it?

6. Your Investment Vehicle The Rear View Mirror The Side View Windows The Windshield

7. How to Drive Your Investment Vehicle • Rear View Mirror - 2% of the time • Side View - 3% of the Time • Wind Shield - 95% of the time • Any other way and you will Crash

8. Amateur Looks Through the Rear View Mirror 50% of the time Looks Through the Side View 50% of the time Does not look through the Windshield Professional Looks Through the Rear View Mirror 2% of the Time Looks Through the Side View 3% of the Time Looks Through the Windshield 95% of time time The Amateur vs. The Professional

9. Can you tell who is the Professional and Who is the Amateur? There is only ONE Way!

10. The Up Market • Everyone Makes Money, regardless of your skill and knowledge • Example: • Year 2000… buy an investment property almost anywhere in the US… you will make more than 100% Return • The Amateur and Professional look alike

11. The Down Market • The Amateur Loses his money • The Professional continues to make more money • WHY? • The difference is the way they "Drive their Investment Vehicle" • Amateur will Crash • Professional will avoid the Obstacles

12. Stock X: When should you have invested and When should you have been cautious? What would the Amateur and the Professional Investor do from 1990 to Present?

13. Stock X is Really THIS!

15. Market Trend: Insider Trading • Now they are cashing in. Executives and directors at many of the nation's largest development companies sold stock at a record pace this summer. Insiders at the 10 largest home builders by market value, including D. R. Horton, KB Home, Toll Brothers and M.D.C. Holdings, have sold nearly 11 million shares, worth $952 million, so far this year. - Summer 20053

16. Market Trends, The WINDSHIELD • The Professional Drives the Investment Vehicle by looking through the WindShield (or researching Market Trends) 95% of the time • The Professional AVOIDS or even Capitalizes on Obstacles while the Amateur Crashes their Investment Vehicle

17. THE WINDSHIELD = PREDICTION • If you can predict it, you can profit from it! • REPEAT 3 more TIMES! • If you can predict it, you can profit from it! • If you can predict it, you can profit from it! • If you can predict it, you can profit from it!

18. Prediction = Risk Management • If you can predict it, you can keep your profits! • Repeat 3 more times! • It is easier to make a Million than to Keep a Million! • All of this is TRUE! • Memorize!

19. Market Trends = ECONOMICS • You can buy a Good Investment which will become GREAT if the ECONOMICS is Good • You can buy a Poor Investment which will become GOOD if the ECONOMICS is Good • You can buy a GREAT Investment which will become POOR if the ECONOMICS is POOR

20. DETROIT Case Study • You are going to Drive your Investment Vehicle in Detroit • In order to Drive your Investment Vehicle without crashing it, What data would you be looking at so that you are seeing through your windshield? (next page)

21. The US Census

22. Detroit Case Study • Michigan is HEAVILY DEPENDENT on Transportation Manufacturing! • Detroit is the main City for the Big 3 Automotive Manufacturers • General Motors, Ford and Chrysler • Let's take a look at the 10 year Graph of GM and Ford (what do you think we will see?)

26. Market Trends - Detroit • What is the GM 10 Year Chart telling Us? • What about the Ford 10 Year Chart? • What about the Toyota 5 Year Chart? • What should you have done 10 years ago in regards to Investment Properties?

27. Market Trends - Detroit • Let us Look at Housing Data • Where do we find it? Many places but the better ones are: • Case Shiller US Index of Home Prices • Let us look at the Detroit Market versus the NYC Market

28. Detroit Market, Case Shiller Index

29. NYC Metro Area 10 Year Case Shiller Index

30. The Professional versus the Amateur • The Professional would have sold out of Detroit • The Professional would have switched to New York City • 10 Year Return for Detroit was only 24% verus 145% in NYC Metro. • NOTE: NYC itself was much more than 145%

31. Market Trend Breakdown • Global • Increase demand in China and India causing Oil prices and Building Material to Spike • National • Federal Reserve Lowering Fed. Funds Rate to combat upcoming Recession • City • Employment, multiple Industries (or single industry), Tourism, etc.

32. Market Trend Breakdown • Neighborhood • Gentrification • Neighborhood Amenities such as Transportation, Parks, etc. • Large Projects such as Atlantic Yards, East Side Access, Sunnyside LIRR connection • Number of Foreclosures, delinquencies, Crime, etc. • Trendy, Starbucks, Artists, etc.

33. Market Trend Breakdown • Block • Important in Major Cities due to extreme density • North of Canal versus South of Canal • Across from a Park (such as Central Park) • Near a Subway • Etc.

34. Bibliography • http://en.wikipedia.org/wiki/Millionaire • http://articles.moneycentral.msn.com/RetirementandWills/RetireEarly/WhyPoorPeopleWinTheLottery.aspx • http://www.nytimes.com/2005/10/04/business/04builders.html?_r=1&oref=slogin