Fred was like most investors and entrepreneurs and had no idea that mobile homes could be a good investment and a great source of income. And what little he had heard about mobile homes was not very flattering. But Fred read a book called Deals On Wheels about how you could make money on them and called me to get more information. I wanted to know if he could visit me sometime, buy lunch, and see first-hand what I was doing. At 9 o’clock one morning, Fred shows up at my door and we went on a tour of the park.

In the first park we went through, I pointed to a mobile home and said, “Fred, take a look at that mobile home and tell me what you see.” This was a 15 year old spacious house. The painting was ugly, a section of the skirting board was missing, a window pane was broken, a dog was tied to the steps, and the garden would never win a “yard of the month award.” He could feel that Fred wasn’t really impressed by what he was seeing. He looked a bit puzzled and said, “I see an old mobile home.” And to the untrained eye, that’s exactly what it looked like. There was nothing wrong with Fred’s eyesight, he saw exactly what I just described. But what he didn’t realize was that he was looking at money disguised to look like an ugly old mobile home. Then I gave Fred the history of this house.

About two years earlier, he had purchased this home for $ 2,700. I spent another $ 341 on advertising and minor repairs. My total cost on that house was $ 3,041. In less than two weeks, I sold it for $ 6,950 to a young couple who needed an affordable place to live. This couple, like many couples, would never save enough to buy whatever they wanted, but they could make a payment every month for life. They paid $ 750 and I withdrew a 12.75% interest note (the industry standard) payable $ 191.07 per month for 40 months. Now, let’s break down the numbers and see how I managed.

We had $ 3,041 invested, we received $ 750 in advance, leaving $ 2,291 in the deal. We now have a promissory note for $ 6,200 and will receive $ 191.07 for 40 months. If I press the correct buttons, that’s 95% performance. After 40 months, we will have raised $ 7,642. And in addition, it will only take 12 payments to recover the $ 2,291 that we have left in the note. As you can see, this little deal provides a very high return, with minimal risk, and was done in a very short time.

Note: If you don’t know how to use a financial calculator or don’t understand how to dial the numbers to get these figures, I recommend my book Getting the Mystery out of Money. It has a chapter that explains in detail the use of a financial calculator for most financial transactions.

Now, let me explain what I have really done with just a few hours of work. Some people will think I just made a little deal and made a nice profit … which I have. But I have done much more than that. What some people don’t realize is that I’ve put in a few hours of work creating a note that now forces someone to send me a check every month for the next 40 months. Once the deal is done, what else do I have to do to get paid? Nothing more than waiting for the postman to bring the checks. I don’t even have to leave the house to get paid, but that cute couple that lives in that mobile home have to go to work every day so they can send me a check. And they can do it 40 times. And it was made in an ugly old mobile home that most investors would not consider to be of any value or collateral.

After explaining all of this to Fred, I asked him to look at that mobile home again and tell me what he saw. What he saw the first time was something that looked ugly, but now, he realized that he had been suffering from an optical illusion. It could be said that Fred’s vision had shown a remarkable improvement in a very short time. Now he could clearly see the money. Then I asked Fred to find out how many mobile home payments like this he would need each month to match the checks he received from his job. I explained to him that if he only made one small deal a month, it wouldn’t be that many months before someone else sent him more money than his full-time job paid for. And if he still enjoyed working a “job” when he got to that point, he could keep the job as a hobby.

Now, I would like to develop a little more on this little deal to show how a little education and knowledge can make a big difference in a person’s life. Before I learned how to put my money to work, I was doing all the work. Back then, I wasn’t so well educated that I thought the answer to financial freedom was to have two jobs. And that’s what I did for many years. Finally, I realized that there were not enough hours in a day and that I could not work enough hours in a month to achieve financial security. There had to be a better way, and I started looking for that way. When I realized that education and knowledge were the answer, I decided to get an education. You see, until then all I had was some “education”. Now I realized that I needed a little education.

Then I began to learn who the successful people were and who were doing what I wanted to do. I started attending seminars given by these people. I paid money that I couldn’t afford to go to those seminars. I took time off from work that I couldn’t afford to take. I bought books, tapes, and courses that I couldn’t afford. I spent many hours listening to those tapes and reading the books, when I could have been watching baseball games on television or fishing, as many people did. I was doing all the things that I couldn’t allow myself to do, so that one day I could allow myself to do all the things that I wanted to do. And I soon realized that it wasn’t a question of whether I could afford to attend seminars, I realized that I couldn’t afford not to go.

Now I can look back and see that I didn’t do all the easy things and all the fun things like many people were doing, but I did all the right things. And today, we enjoy financial security and financial freedom and we can do what we want to do and we can do it when we want to do it. While some of our friends are still working “jobs” in search of financial security they will never know. They had the same opportunity to make decisions that I … they just made the wrong decisions. They all had “education,” but they did not have the education necessary to give them financial freedom. Now they tell me how lucky I am.

The best investment you can make is in yourself. So be willing to pay for your education now, or be willing to pay a much higher price for your lack of education later. The decisions you make today will determine your financial future. Make sure you make the right decision, because you will have to live with the results of that choice.

Fred paid for lunch that day, which was a hamburger and fries. (I think I’m working too cheap.) Next time, Fred, it will be prime rib and good wine.

Update: Fred no longer has a “job”. He has now done more than 50 “Lonnie Deals” and is a co-owner of a mobile home park. How sweet it is, Fred. Congratulations.

To your success,

Lonnie scruggs