I started to write this post and it got too deep into more advanced stuff. So here is the revised version. If I get a chance I will clean up the other one and put it up as well.
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How do I become wealthy? The answer to this question has most certainly eluded all but a select few individuals. Those few people have developed a talent for amassing riches. Others are content to live their lives in the middle class, supporting the poor by earning a reasonable sum of money just to give it up in the form of taxes. And the poor....I hate to say.....bring it upon themselves. They lack the motivation to make positive changes in their life.
The first thing you must do to begin your journey toward success is study. I'm not talking about signing up for a course at your local community college. I'm talking about purchasing books and tapes by people who know success. Your first purchase should be Rich Dad, Poor Dad, by Robert Kiyosaki. This will teach you the fundamental differences between the minset of the rich versus the mindset of the poor and middle class. Be forewarned; the information you will be reading is likely CONTRARY to everything you THINK you know about acquiring wealth. If you are able to keep an open mind you will eventually be able to comprehend what he is saying. If you understand immediately, congratulations. You are well on you way to becoming successful. Once you understand the wealthy mindset, it's time to learn the nuts and bolts.
Your next purchase should be Building Wealth, by Russ Whitney. In his book Russ outlines the steps you need to take in order to achieve financial independence (make enough money from your investments to be able to quit your job and concentrate on making REAL money). If you put his ideas into action you will be well on your way to immeasurable wealth.
His methods revolve mainly around real estate. There are other ways to acquire wealth, but none as quick and safe as purchasing real estate with no money down. The stock market is another vehicle used by many, but requires an initial capital investment. Sure, you can start with a couple hundred dollars. But the rate of return you would have to earn to make it compare to real estate, over a given period of time, would be astronomical. Business has certainly created a multitude of millionaires, but it is tough to get started in and takes much trial and error.
I have been fortunate enough to have experienced all three. And despite the fact that I started a business last year that looks to have the potential to eventually make me millions, I would still recommend real estate. It took me 6 years to make any money in business. It took less than a year to make money in real estate.
Think of it this way. Lets say you are able to purchase your first piece of income producing property using a no money down technique. Lets say you were able to buy a $100,000 house for $90,000. It happens everyday. You just earned a paper profit of $10,000, without ANY initial investment.
Small effort, large return. That's the name of the game.
I can hear the naysayers now. "But you may not be able to turn around and sell it immediately....real estate commissions would eat up the profit....blah, blah, blah". What they don't realize is that you have already done your homework, and the property you just purchased will be leased to tenants for $1200 per month, while your mortgage payment and other expenses total only $900. You have a POSITIVE CASH FLOW of $300 every month, to do with as you choose (Think FINANCIAL INDEPENDENCE).
They don't realize that you are going to HOLD this property for at least several years. While your tenants pay all of the expenses. You should be able to increase the rent every couple of years (which means that $300 turns into $400 turns into $600 per month and on, and on...). Meanwhile, the VALUE of the property has increased. Instead of being worth $100,000, after a few years it may be worth $120,000, or $140,000.
Another consideration is TAX BENEFITS. Since I started purchasing real estate and have become self employed, I have paid VERY little in the way of income taxes. I paid MORE taxes when I worked as a bartender.
I collect dividends from my corporation, so I pay NO social security tax! This is why the middle class end up supporting the poor. The don't purchase income producing assets that provide a tax shelter. Could you think of a few things you would rather do with your hard earned money than support deadbeats? I can. And do.
So you have purchased one income producing asset. Your confidence is through the roof! What do you do next? BUY ANOTHER ONE! And keep buying them. If one property increases your net worth by $40,000 over five years, what could TEN properties do? You get the picture.
I purposely did not go into detail regarding the mechanics of purchasing real estate for no money down. Building Wealth will teach you several methods. I would also recommend courses by Carleton Sheets and Robert Allen, two more legends in the real estate game. Read, read, and read some more. I couldn't possibly include the volume of information necessary to get started in this post. That's what the books are for.
But remember, all of this knowledge will do you no good unless you take action. Start by driving through neighborhoods you might be interested in. Make some calls to owners of for sale by owner properties. You aren't committed to anything until you sign a contract. You will learn much by simply talking to people.
A few things to remember:
1) Ignore anyone who says it can't be done. Your well meaning parents don't know everything.
2) Protect your credit score as you would protect your life. Wealth cannot be obtained without debt. Your ability to borrow large amounts of money is KEY to retiring wealthy. A million in debt is a million in net. Investment debt is GOOD!
3) Network! Meet as many influential people as possible. I will guarantee you that most successful people would be more than happy to suggest a few pointers to a seriously interested newbie.
4) Persistence is a must! If you think that you will become super wealthy overnight, don't even waste your time trying. In the beginning it will seem as if you are doing a lot of work for little pay. Give it time. Time is your best friend.
5) Take action! This is the toughest step in the entire process. This is where most people fail before they even begin. The law of inertia will take over after your first successful deal.
I hope this information helps. If you have any questions I'll do my best to answer.
