I was speaking to someone who entered the realty space a few years ago. He has invested over Rs. 700 crores into developing a township in Southern India. A large part of the funding has been done by banks and financial institutions.
Now while the project started, he was expecting revenues of over Rs. 2500 crores from the entire project. He had assumed he could sell each square foot for Rs. 5,000. I remember telling him more than a year ago, how real estate prices are overvalued and will fall and how it would be best for him to reduce prices and sell.
That time he was making a decent profit and could have easily sold his stock for Rs. 2,500 a square foot. This means he would have still got back Rs. 1250 crores on an investment of Rs. 700 crores. This was good money but he didn’t exit that time.
Today he is unable to sell even at Rs. 2,500 a square foot and is not only stuck with huge inventory, but also has to repay banks and financial institutions. Buyers will not buy property even at Rs. 2,500 a square foot, because they feel it will go down even further. Even if interest rates go down, and the government announces stimulus packages people will not buy if they feel they can get a abetter deal by waiting.
I have suggested to him to sell now, even if he just recovers the cost, because if he waits any longer there could be a lot more stock coming in from several builders and he might not even be able to recover his cost. I see a lot of builders going bust and this could mean even more trouble for someone like him. Instead if he exits now, he will have a lot of cash which can be used to buy cheap assets. He will also not have to pay interest on the loans he has taken.
Today land prices have already fallen from their peaks and if he has cash, he can buy this land for the future. I know of so many people, who are willing to sell several acres of land in prime areas across the country at a flat 50% discount to what they were asking a year ago.
He can actually make cash out of this crash, if he takes his cash of the table and uses it to buy things even cheaper. No crisis lasts forever and anyone who sees a longer term picture can Cash The Crash!
A Crash is the best time to create wealth and I am not just saying it for the sake of saying it, but based on personal experience. The sad part is that, most people discover opportunities they could have benefited from only after the crash and crisis is over. For instance how many people actually went out and bought property after the real estate crash of 1996 – 1997? They were available almost 70% cheaper.
I wrote Happionaire’s™ Cash the Crash so that I could share the knowledge needed to first understand then benefit from the crash. I have shared the tools needed to analyze financial statements such as Balance Sheets and P&L, while analysing one of my personal investments which is already rewarding me quite well and is available at least 400% cheaper than it’s true value. In a Crash so many things are extremely mouth watering and delicious!
I have even shared quite a few secrets about investing and business, which most “Insider” investors, hedge funds and people responsible for the crash wouldn’t want you to know. Happionaire’s CTC doesn’t just look at stocks, but the entire world of investing, business and more. At the end of the day everything is related.
And of course I don’t need to say, that everything has been written keeping the Happionaire philosophy in mind - that is to make sure everything is fun, simple and interesting. To spread the message of financial literacy and empowerment, we need to speak the language most people understand.
By the grace of God, the people who have read the book, have already given me extremely positive and heart warming feedback. It is really nice to know that words have so much power. They can make someone smile, feel nice, learn more and even benefit financially. Words influence the way we think, and the way we think decides what we do with our lives.
Sometimes great opportunities come disguised as problems and challenges. Let positive thoughts, words and people surround you. Don’t listen to people who are constantly grumbling and cribbing about problems, instead look and learn from people who have gone on to create tremendous wealth.
Here Is What The Richest Man On The Planet Had To Say About Crashes:
The stock plunge "doesn't make any difference," says Warren Buffett, one of the richest Happionaires on the planet.
"It's happened to me three other times," he says.
"It happened when it went from 90 to 40 back in 1974, and it happened in 1987. It went down 50 per cent in 1998-to-2000. I mean, I hope I live long enough so it happens a couple more times."
Keep smiling, learning and believing in yourself and you can certainly Cash the Crash!
Happy wealth creation!
Those Who Cashed The Crash In October - Are They Really Kings?
Do You Think You Can CashThe Crash Too? Share Your Views With Other Happionaires!