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Open Your Brain - Entrepreneur of the Week - Yossi Golan - Day 6

Initiated week Yossi Golan # Post 6 And last
Post Summary - Post “Opening the Lobe”
During my last role for 5 years as a technical investigator for the Air Accident Investigation Board, something has changed in me.
It was not the harsh sights and the special smell of a serious accident after a plane crash, nor the insights and findings I discovered, but mainly one very difficult insight to digest - that failure is a built-in part of the process and life.
Failure is there all the time and lurks for gym class.
But in the same breath I learned that the best way to neutralize or reject it is through proper, inclusive and perpetual risk management.
These years have made me look at everything in life through different glasses, ones that look for danger, try to identify and locate failure.
And yet it is natural that these insights have leaked to businesses as well.
Today before I look at how much I can gain - I look at how much and where I can lose.
This perception led me to a clear conclusion:
“Black Swan” (Or any other name for a failure or program that goes wrong and turns in a different direction than expected) - Will happen too happen!
The only question is - when?
And more importantly - am I Edit for failure including alternative plans? Am I willing to contain his results?
This insight that failure would come led me to analyze my investment and asset management while understanding that one day something I did not expect would happen.
My conclusion - action must be taken immediately to spread risk, while investing in various channels.
I decided that in order to generate a steady income I needed at least 3 different and independent sources.
I determined for myself the following 3 sources:
1. The military pension
2. The real estate market
3. The capital market
The perception is that any of these sources may be damaged one day and the plan is that the additional sources will cover it during this downturn until it recovers.
The pension - Relatively stable income, nothing to expand (by the way, is not immune to threats)
Real Estate - This source of income has been deliberately split into several sub-sources as an act of risk diversification - for Israel Real Estate and US Real Estate.
Israel Real Estate (my proposal for risk diversification and continuous income):
A. Activity as a mediator - specialization in land for thawing and entrepreneurial projects
B. Purchasing a rental property for rent
third. Acquisition of agricultural land in the process of improvement
D. Entrepreneurial activity in the construction of boutique buildings in Hodesh
US Real Estate (my list of risk diversification and continuous income):
A. Residential properties yield income in the US.
B. Commercial income-producing properties in the US.
third. Property improvement - through investor groups I recruit
D. Establishment of SUB DIVISIONS- through investor groups that I recruit
Capital Market - This source of income is divided into several sub-sources as an act of risk diversification:
A. Pension funds and advanced training in large companies (assuming most of us have)
B. Shares in Israel and abroad (purchase when there is “blood on the floor”).
third. Trading using robots for trading in the foreign exchange market (algo-trade) and here too a subdivision into several platforms.
And now we will open the lobe even more and let's talk numbers and especially about section C under the capital market paragraph.
In general,
A standard improvement transaction is purchased at 30% lower than the market price and after deducting the cost of improvement, will yield a total return of 24% per project, approximately in a period of one year.
Duration from end to end - about a year.
Assuming a 50-50 split between the developer and investors, this is an annual return of 12%.
A rental deal is expected to yield a similar return.
What would you say If I were to tell you that I produce a return of approx 20% Per month Completely passively using an algo-trade robot that works locally in the forex market.
20% per month !!! This is the average return I produce.
The compound interest rate brings this to yields of hundreds of percent per year.


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Entrepreneur of the Week Yossi Golan - Day 3 - Land in Israel - Risk Management

Entrepreneur of the Week Yossi Golan # Post 3
Land in Israel - risk management
In a previous post we analyzed the issue of new land construction in the US and detailed a list of issues required for examination in the decision making process on land acquisition.
But what is happening in the Holy Land?
The answer in a nutshell - even more complex and challenging than in the US.
This post is unique to the world of agricultural land.
Let's start.
Thawed and approved land for construction, unlike agricultural land, has very low risks, but also has low entrepreneurial profit.
Therefore, we will deal with agricultural land, the huge entrepreneurial profit inherent in it and the risks.
Many investors want to purchase agricultural land in Israel.
The purpose of the investment - to create a passive future profit resulting from the increase in the value of the land as a result of a change in its designation.
Some investors want to do so in Israel with the intention of spreading risks between real estate investments abroad and in Israel, and most of them out of a desire to purchase a property that is linked to rising real estate prices in Israel.
It has been said from the beginning - the critical step, which has the greatest impact on the value of the land - here is the completion of the thaw phase for construction.
Let us explain for a moment the concept:
The process of thawing / change of designation - means changing the designation of the land from land that is not approved for construction, let's say an agricultural to land designated for private / saturated / commercial construction, etc.
When we come to consider the purchase of land that is not intended for construction, we must consider a large number of considerations, the most important of which is the length of time until the end of the process of changing the designation.
That is, the period of time that will elapse until we see an increase in value in our investment.
It is clear that the longer the process, the less attractive the investment.
Let's take an example to illustrate with realistic numbers:
Agricultural land is currently sold in an excellent location in Hodesh for about NIS 300,000. The value of this land as thawed is NIS 1,000,000. Suppose that after a praise tax and expenses, a profit of NIS 500,000 remains.
And here comes the dimension of time - if the thawing process lasts 5 years, an annual profit of 100,000 NIS will be created, which is an annual return of about 33%.
However, if the thawing process takes 25 years, an annual profit of NIS 20,000 will be generated, which is an annual return of about 6.6% (and in practice even much less if we consider inflation and interest-bearing issues).
While Case A is a good deal, it is clear that in Case B it is not economic-entrepreneurial, with the only difference between the cases being the duration of the improvement / change of use process.
It should also be noted that most investors do not sell the land upon thawing and cut an oil coupon, but continue to build entrepreneurship as part of purchasing groups to increase profits several times over.
So how do you get started claiming a daycare tax deduction?
The answer - this world is very complex and depends on many variables, from the local committee, through the position of the district committee, to the entrepreneur's abilities in promoting the program and ending with the state of the economy.
In this post we will try to get to know the most influential elements of the process when we come to make a wise-economic decision.
The explanation will come in the following example.
A few years ago, a friend came to me and asked for my opinion on a land deal that should provide him with the right to a housing unit in one of the cities in Israel. He approached me because he knew that my specialty was lands with a change of use.
With the intention of showing me how successful the negotiations were, he told me that out of 200 units in the project, about 190 units were sold.
Moreover, he showed me that while the average price at which a unit was sold is NIS 300,000, he skillfully lowered the price to only NIS 270,000 in negotiations with the developer. 10% below the market price.
My first reaction was that it would not be responsible on my part to advise him on the matter, as I do not know the city where the land is located, nor the city building plans, nor the city craftsmen, nor local nuances, nor the forces working to advance and reject the plan nor material details. Many more.
However, it's a friend.