Beginners guide to becoming WEALTHY

[Jon55]

STR8UP, pretty nice thread and i agree with you on many things here. I am working on building my net worth instead of focusing on working a job. To everyone here that is trying to create wealth, The very first important step in heading in that direction is thinking like a millionaire. The second step is to increase your financial education. Ive read Rich dad poor dad, the cashflow quadrant, Rich dad guide to investing and the millionaire next door. What the average and uneducated middle class fail to realize is that although the markets and economy in these times are in the sh*tter, To the educated and smart investor, This is the opportunity of a lifetime to produce mass amounts of wealth.

Lets take the stock market for example. Can you make money in the stock market right now? Absolutely, But how if everything looks so down? Well, thats where financial education comes in. The smart investor knows how to make money weather the market goes up or down. For example, if the market looks like its going to get pounded, You can short stocks on margain or you can play ETF shorts. Also commissions on brokerage accounts, The most well known are Scottrade, Etrade, Ameritrade..etc but i use SogoTrade, and its only $3 a trade commission. I was using Zecco and that charges $4.50 a trade, 10 Free trades a month if your working with $25K in equity.

As for Real Estate, boy is RE in the toilet right now but you know what? The Wealthy love it this way because all the idiots who thought "I have a good "J.O.B" I can afford this house" are getting shaken out and prices are so low its ridiculous. In these times is where the wealthy open up their check books and buy property at an extremely discounted price. They know that the economy will slowly but surely recover and when it does, they have already bought up some nice Real Estate and let it work for them.

Lastly, Networking with wealthy people. Everyday, More than likely we all interact with people who are in a Sh*t load of debt, who are employees and basically, are not wealthy because they have no clue about financial education. Ive met and spoken to people who have a net worth of over 4 million dollars and average 20K or more per month and the way these people think is unbelievable. If you went up to your parents or family member or even friends and told them "im working on increasing my net worth to 500K or produce profits of $15K per month" they will probably smile and say um Ok, good luck but someone who is wealthy will probably say "Thats good, How are you getting there? what are your methods?" and give you ideas and strategy's. these F**ckin people take money seriously and they know how to use it. all im saying is that there is a big difference in attitude and way of thinking when comparing the rich and the middle class.

Here are some good sites ive read up on that help with the mindset.

http://www.investmentu.com/index.php
http://www.universalwealthcreation.com/wealthcreation/
http://www.streetdirectory.com/trav...crets_of_self_made_millionaires_revealed.html
http://www.howwealthworks.com/

If you want to get into the market, here is a very good site as well:
http://www.hotstockmarket.com/

One final comment, All of us can achieve wealth and become financially free from working a job, its ALL in the education of how to get there. If you want to be a Doctor, a Lawyer, a Computer Engineer, a Architect, a Teacher... etc you have to educate yourself first right? Becoming a wealthy investor is no different.

Wow, thank you. This is exactly what I was looking for.

 

[Scuba]

One final comment, All of us can achieve wealth and become financially free from working a job, its ALL in the education of how to get there. If you want to be a Doctor, a Lawyer, a Computer Engineer, a Architect, a Teacher... etc you have to educate yourself first right? Becoming a wealthy investor is no different.

I agree, you do have to educate yourself. The fact is, most people lose money when venturing out in investments on their own. The reason for most of them losing? They have not put enough time into educating themselves about how to do it right. Sure, they have read 2-3 books and maybe a couple of internet forums. That is not enough. You can't be trained to work in McDonalds with that amount of time invested, how do they think it's enough time to set up their financial future?

Personally, I would recommend someone to spend 4-5 hours a week for a year or more before risking their hard earned dollar in the stock market, FOREX or whatever else. Certainly during that year save money and get your finances in order but don't just dump your money into a market until you understand the markets much better.

 

[Jon55]

Here are some good sites ive read up on that help with the mindset.

http://www.investmentu.com/index.php
http://www.universalwealthcreation.com/wealthcreation/
http://www.streetdirectory.com/trav...crets_of_self_made_millionaires_revealed.html
http://www.howwealthworks.com/

If you want to get into the market, here is a very good site as well:
http://www.hotstockmarket.com/

Any other good Forums for money making/wealth building?

 

[erivera571]

need advice ...

Hey STR8UP, love your thread, I could use some pointers if you got time

I'm a 20 year old college student, and although I look forward to getting started in my field, I realize working for X amount of years won't get me financial independence. I just need some advice on building my credit, after reading through this thread I realize the importance of borrowing large sums of money in the grand scheme of things.

Here's the story, last year for my B-day being the naive 20 year old that I am, my aunt co-signed for me and I bought a car for $16,000, I put $3,000 down. After a while I realized what I had gotten myself into, I realize it was an emotional buy, $280 /month for the next FOUR YEARS? **** that.

I'm at a crossroads here, as of today I still owe roughly $10,200, it is a recent model (2007 Jeep). According to KBB I can re-sell the car for $14,500ish.

I have two choices here:

1. Sell the car to a private party and pay the loan in full, w/ a little left over for myself (basically getting my 3k down payment back). Not to mention eliminate crazy insurance bills.

2. Keep the car and pay it off over the next 3-4 years, losing money every month.

Which of these two choices would be better for my credit score? Currently I live at home and pay no bills minus maybe the cable bill and of course my car loan + insurance. I work part time and make roughly $1,200ish a month. I have told my mom that I'm having second thoughts about my purchase, but she is EXTREMELY opposed to this since she loves the car. her excuses range from 'but you need a good car' to 'why have money if your not gonna use it?' to 'you only live once', she doesnt get it.

It was a mistake on my part, I def learned my lesson

 

[In2theGame]

Hey STR8UP, love your thread, I could use some pointers if you got time

I'm a 20 year old college student, and although I look forward to getting started in my field, I realize working for X amount of years won't get me financial independence. I just need some advice on building my credit, after reading through this thread I realize the importance of borrowing large sums of money in the grand scheme of things.

Here's the story, last year for my B-day being the naive 20 year old that I am, my aunt co-signed for me and I bought a car for $16,000, I put $3,000 down. After a while I realized what I had gotten myself into, I realize it was an emotional buy, $280 /month for the next FOUR YEARS? **** that.

I'm at a crossroads here, as of today I still owe roughly $10,200, it is a recent model (2007 Jeep). According to KBB I can re-sell the car for $14,500ish.

I have two choices here:

1. Sell the car to a private party and pay the loan in full, w/ a little left over for myself (basically getting my 3k down payment back). Not to mention eliminate crazy insurance bills.

2. Keep the car and pay it off over the next 3-4 years, losing money every month.

Which of these two choices would be better for my credit score? Currently I live at home and pay no bills minus maybe the cable bill and of course my car loan + insurance. I work part time and make roughly $1,200ish a month. I have told my mom that I'm having second thoughts about my purchase, but she is EXTREMELY opposed to this since she loves the car. her excuses range from 'but you need a good car' to 'why have money if your not gonna use it?' to 'you only live once', she doesnt get it.

It was a mistake on my part, I def learned my lesson

You my friend are in a great position in regards to your age and the time you have to increase your financial I.Q and Net Worth. My BEST advice to you is, Get rid of the loan immediately. Sell your car, Take the money and pay the rest of the loan off, use the remainder of the money to buy a cheap $2000 car. I know, I know... you dont want to look like a chump in "out of style" car but you have to sacrifice the materialistic things today so you can be wealthy tomorrow. I was in the SAME hole not long ago. I had a E-Class Mercedes and i felt great cruising but that car was a liability and a road block to my wealth creation. Why do you think SO many people get their azz handed to them when the bills become more than they can handle? because they wanted that car/House/Vacation/etc.. NOW. I sold my Benz on craigslist, Paid the loan off (No debt now) and drive a 1998 Maxima, BUT! all of my money is sitting in my brokerage account while i play the markets and you know what? My net worth is building. Now i understand why the wealthy are wealthy and why the middle class are the middle class. Wealthy = Investments, Using money to work for them, and Build their Wealth/Networth. The middle class however believe in Credit, Debt, Spending and Paychecks. Dude if you play your cards right, You can be sitting on $500,000 or more by the time your 26 and a cool $3,000,000 by the time your 33. Educate yourself right away on how the wealthy think and react. Financial Education is #1 and you have alot of time to do very well. I wish i was thinking this way when i was 20, im 25 now, im still young but the younger the better.

 

[In2theGame]

WTF, It posted my reply 3 times.

 

[In2theGame]

Double post..

 

[erivera571]

You my friend are in a great position in regards to your age and the time you have to increase your financial I.Q and Net Worth. My BEST advice to you is, Get rid of the loan immediately. Sell your car, Take the money and pay the rest of the loan off, use the remainder of the money to buy a cheap $2000 car. I know, I know... you dont want to look like a chump in "out of style" car but you have to sacrifice the materialistic things today so you can be wealthy tomorrow. I was in the SAME hole not long ago. I had a E-Class Mercedes and i felt great cruising but that car was a liability and a road block to my wealth creation. Why do you think SO many people get their azz handed to them when the bills become more than they can handle? because they wanted that car/House/Vacation/etc.. NOW. I sold my Benz on craigslist, Paid the loan off (No debt now) and drive a 1998 Maxima, BUT! all of my money is sitting in my brokerage account while i play the markets and you know what? My net worth is building. Now i understand why the wealthy are wealthy and why the middle class are the middle class. Wealthy = Investments, Using money to work for them, and Build their Wealth/Networth. The middle class however believe in Credit, Debt, Spending and Paychecks. Dude if you play your cards right, You can be sitting on $500,000 or more by the time your 26 and a cool $3,000,000 by the time your 33. Educate yourself right away on how the wealthy think and react. Financial Education is #1 and you have alot of time to do very well. I wish i was thinking this way when i was 20, im 25 now, im still young but the younger the better.

Yea, deep down I know I don't wanna be tied down to something like this for 4 years ...

I have to admit reading through this thread has really made me think about my immediate surroundings differently, before I would see someone in a shiny new car and think to myself 'Wow that guy must be loaded' but now I see through the shiny-ness and realize he is actually becoming poorer due to paying for something that loses value every day.

You are right though, it's still pretty early in life so I don't think I've done too much damage. Live and learn

I think if I manage to sell it, I'll instead use the money to get an early start on paying off those student loans. The faster I get rid of those, the faster I can free up my money to invest in other things. Any suggestions?

 

[Vypros]

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!

That's the biggest crock of sh1t in your post.

You don't NEED debt to build wealth. In fact, imagine if you are making $100K per year, but don't have any payments but utilities? How much wealth do you think you could build if you had almost your entire income available to you? And you won't have to worry about paying interest on your money. You can GAIN interest on your money and let your money work for you.

Sure, you CAN use debt to build wealth, but it's not the only way like you claim. And, depending on your values, it's not the best way either.

 

[intrextrovert]

I have a question.

Would anyone here consider themselves wealthy or close to being so?

Also as a 16 year old in HS, does anyone have tips for my upcoming life on what to avoid, what to grab at in terms of money? I'm from a middle class family, probably upper middle though my mother's income just got laid off so i don't know if it will stay so, and have about a hefty grand (lol) in a savings account with an interest of like 0.0065% (of personal spend when i want it money. I'm pretty sure there's a good amount in a college fund for me as well from my parents). However I really would like to be wealthy when I am older, as I cannot see any occupation I would enjoy enough to keep for life. However i'm unsure about wtf I will be able to do in the future, given the situation of the country and not having a ton of cash to gamble. I'm a saver usually which I'm sure will help, and a bit of a minimalist. Mostly wealth attracts me for the freedom it brings.

Basically: I am a 16 year old, with not a lot of money, what tips do you have for me in the future/what are suggestions of what I will be able to do with my limited capital to build it, particularly what can I do now and during college to get a jump start on building myself up?

 

[erivera571]

I have a question.

Would anyone here consider themselves wealthy or close to being so?

Also as a 16 year old in HS, does anyone have tips for my upcoming life on what to avoid, what to grab at in terms of money? I'm from a middle class family, probably upper middle though my mother's income just got laid off so i don't know if it will stay so, and have about a hefty grand (lol) in a savings account with an interest of like 0.0065% (of personal spend when i want it money. I'm pretty sure there's a good amount in a college fund for me as well from my parents). However I really would like to be wealthy when I am older, as I cannot see any occupation I would enjoy enough to keep for life. However i'm unsure about wtf I will be able to do in the future, given the situation of the country and not having a ton of cash to gamble. I'm a saver usually which I'm sure will help, and a bit of a minimalist. Mostly wealth attracts me for the freedom it brings.

Basically: I am a 16 year old, with not a lot of money, what tips do you have for me in the future/what are suggestions of what I will be able to do with my limited capital to build it, particularly what can I do now and during college to get a jump start on building myself up?

Hey man, I'm only 20 years old and almost done w/ college, but I've made a few mistakes myself even this early. I'll share. PLEASE learn from my mistakes

First of all, if you decide to go to college, make SURE you do the whole 2 years community college > transfer to 4 year school for last 2 years thing, I ****ed up and was very last minute w/ my school planning and just jumped straight into a 4 year school. Had I gone the 2 community college years route, I could EASILY have a good $8,000 right now, community college is cheeeeaaapp. Plan, plan, plan ahead, dont wait til the last minute like I did

Second, try and save your cash, you are living at home, use that to your advantage, all the money you earn from jobs is 100% yours for the most part, minus minor taxes. I realize that had I not bought so much random **** and gone out as much, I could easily have had over $10,000 from since I started college til now. Looking back I wasted a lot of money. Look at the bigger picture man. Thinking ahead = win

Lastly, DONT BUY A NEW CAR!!!!! I ****ed up on this one recently, its not worth it man. Its VERY tempting especially if your car sux and you get fed up like I did, but during college a used car is simply a smarter choice. To give you an idea, I pay $337/month car payment on top of $170/month insurance. I'm 20 years old, you don't wanna be throwing your money away like that man, just don't do it. Your money at this age should be yours, not going to some bank/insurance agent/collector/etc.

I think something good for you to remember is to always ask yourself do I REALLY need it?

Can I live without it? If the answer is 'Yes' then DON'T BUY IT!!! save your cash

Questions like that will help keep you out of trouble.

Hope that helps

 

[Samedi]

Ok here's my situation at present,

I currently have about £30,000 saved up, i lent some to my sister to buy a house and to my mum for things for her to buy lol. Which i don't mind doing as they do favours for me. So basically i have some in a high interest account at about 4% and some in a ISA account at 5%. My monthly income from my £20,000 job goes into a normal account which i empty to fill up the high interest ones.

Now i still live with my parents, hopefully gonna pass my driving test this Wednesday which means i gotta get a car (obviously ). Of course i always try and do research when i buy things.

Well my reason for posting is of course, given that currently i save pretty much most of my earnings, i just have this "feeling" that the path that most people take, job/house/mortgage/1-2 holidays a year kinda agitates me. Meaning that my mind isn't content with that. I feel trapped. I don't want to work in some crud factory till im going on 40+ and doing the same shyt every damn day. I have no education, no experience in finances or anything. I have no idea what to do. This is frustrating me!

So how can i use the money i have at present work for me? It's like im a bum who has no future because i didn't apply myself at school. Too lazy to learn. I don't know what to learn because i've never been taught about such things as making money.

What am i doing wrong?
Thanks in advance.

Edit: currently reading through the links provided above, hopefully i can gain some insight from them.

 

[STR8UP]

That's the biggest crock of sh1t in your post.

You don't NEED debt to build wealth. In fact, imagine if you are making $100K per year, but don't have any payments but utilities? How much wealth do you think you could build if you had almost your entire income available to you? And you won't have to worry about paying interest on your money. You can GAIN interest on your money and let your money work for you.

Sure, you CAN use debt to build wealth, but it's not the only way like you claim. And, depending on your values, it's not the best way either.

Let me explain a couple of things.

1) If you make $100k per year in the US as earned income from your job, first knock out $20k in taxes. That leaves you $80k. Lets say you live in a reasonably priced area where mortgage or rent costs you another $12k. Now you have $68k. Add in health insurance $4,000. $64k. How about a car? Even a used car incurs expenses. Lets be conservative and say you spend an average of $5,000 per year on transportation. $59k. Food. Lets say you never go out to eat. Still gonna cost you at least $4k. Now we're down to $55k. Lets say you aren't a party animal, you don't spend much on entertainment, and you don't go on vacations, so your other miscellaneous expenses are $2k. $53k.

Add in utilities (ironically the only expense you allowed for) and other miscellaneous stuff, and you can see that you are probably going to be BELOW $50k left at the end of the year. And that's living like a hermit. Have fun with that.

So you have $50k left at the end of the year. Put it in the bank and in ten years you will have $500k plus interest (which nowadays is next to nothing). In TWENTY years you will have a million. You could retire on a milllion, but most people would want more.

So it will take you the better part of 20 years of keeping a good job and living like a hermit to BARELY be able to retire. Maybe that's ok for you, but for me that is unacceptable and unnecessary.

2) Debt is not the ONLY way to become wealthy, but if used properly it is a very powerful way to build wealth quickly. If you have business talent or are a gifted actor or athlete and can create a company that generates massive revenue or sign multi-million dollar contracts to play a sport or make movies, you might be able to do it quickly without debt. But most of us don't have that kind of talent, unfortunately.

^Leverage/debt is the worst way to build wealth in the long run. Debt financing only makes sense if you're paying for a USEFUL education or starting a business. Debt should not be used to leverage the returns of passive investments like real estate and equities, as we have seen during this financial crisis.

So what you are saying is that debt is useful to pay for an education that requires you to work 40 hours a week for a paycheck, or to start a business which has an INCREDIBLY steep learning curve? This as opposed to buying income producing property that AFTER expenses generates a positive cash flow? Are you high?

Lemme guess....they taught you that in your financial planner class?

Everything I wrote about buying property that is paid for by someone else (tenants) is just as true today as it was back then. I could have bought $10million worth of residential real estate at any time during the past and as long as the property pays for itself I could eventually cash out for a profit.

The recent crash is IRRELEVANT. Price fluctuations make no difference when you are prepared to hold for as long as it takes.

I have a feeling that if you actually took the time to read and comprehend the original post you would see the logic in it, but with your narrow minded view I doubt that will ever happen.

 

[strong like bull]

"In TWENTY years you will have a million. You could retire on a milllion, but most people would want more.

So it will take you the better part of 20 years of keeping a good job and living like a hermit to BARELY be able to retire. Maybe that's ok for you, but for me that is unacceptable and unnecessary."

just to add on to what straight up said,
retiring on a million TODAY, is barely enough to enjoy yourself THRU retirement. if youre 23 like me and not going to retire for another 20-30 years... people need to think about INFLATION. theres no bones about it - ill need at least 2-3 mil to retire comfortably. and not just comfortably, but actually have enough money to last THROUGH retirement. the reason you see old people at walmart saying hello and goodbye to you, is because they didnt have enough money to last comfortably thru retirement. most people dont plan to fail. they fail to plan. and if you want to be able to travel, have freedom and maybe even a bit of luxury in your twilight years, we as a people better plan realistically.

retirement is like a football game. theres two halves - accumulation and distribution. the game doesnt just end at half time... not only do we have to accumulate a large score (of money ) but we have to put it in the right places, so itll be properly distributed back to us, at the highest (yet consistent) return, all the way through retirement.

point being, i agree that without leveraging yourself and your money... itll be a lot harder to get anywhere. sure you could save a million over 20-30 years, but what if over that same period of time you had also acquired 10 income producing properties? not even being super aggressive, but one new home every couple years. single family homes... bread and butter stuff. and waited til retirement to cash out?

if you bought the house for 100k, and 20 years later its worth 500k. a difference of 400k... and if you had ten houses... essentially when you cash out and sell off your properties, youre looking at $4mil coming your way. minus whatever fees and taxes.

the most important thing to remember about that: which was harder for you, working hard 9-5 for 20 years, being the best employee you can?
or slowly acquiring more and more properties over time, which via your tenants essentially paid themselves off, for you to sell at your convenience?

thats the power of leverage. thats the power of investment debt.

out here in phoenix, arizona there are ASTONISHING deals on real estate because of the crash. the house my mom was paying 200k for back in 2005, which she ending up losing into foreclosure, is now being sold for 35k. 35k!! and all the properties in the neighborhood are still valued at over 100k!

whoever buys that house is going to realize an instant paper profit of more than 60k, regardless of what they do with it. and theres thousands of deals like that out here right now.

the market will always go up and down.. always has, always will. the real money is made in the down market. everythings on sale. when the markets crashed, warren buffet didnt sink 8 billion dollars into the stock market because he was scared. he did it because he knows that the market will eventually come back up. and to buy assets or stocks at rock bottom price, knowing full well that years from now he could sell them for multiples of what he paid... its just common sense. the people that hustle and bust their butts to get in on the action NOW will be greatly rewarded down the road.

its all in your mind. a lot of the people who paid big bucks for their education and that respectable job... have now lost that job. a j-o-b mindset will only take you so far in life. you have to think outside of the box. have a business/investors mindset. be creative and unconventional. the people with employee or j-o-b mindsets are going through tough times because they got laid off, or are only making x amount a week living paycheck to paycheck.. not really happy, just kinda getting by.. while the creative ones are looking at the whole situation from a different perspective - "what do i need to be doing, or where do i need to be, to get the big pieces of the pie?"

consumer debt - bad
investment debt - good

buy low, sell high

put people under leadership, and money under management

-slb

 

[STR8UP]

the market will always go up and down.. always has, always will. the real money is made in the down market. everythings on sale. when the markets crashed, warren buffet didnt sink 8 billion dollars into the stock market because he was scared. he did it because he knows that the market will eventually come back up. and to buy assets or stocks at rock bottom price, knowing full well that years from now he could sell them for multiples of what he paid... its just common sense. the people that hustle and bust their butts to get in on the action NOW will be greatly rewarded down the road.

Ever heard the saying "The rich get richer and the poor get poorer"?

There is one simple reason for this, and that is the fact that the rich buy when everyone else is selling and sell when everyone else is buying. The poor buy and sell based upon need or greed. The rich have no such constraints.

I've probably said it a dozen times in this thread and others, but if you want to get rich SLOWLY, then by all means invest large sums of time and money in traditional education and 401k's and such, but if y ou want to become wealthy QUICKLY (or at least before you are too old to really enjoy it) then you are going to have to be willing to learn things other people say are too risky or impossible, and do things other people aren't willing to do.

It's true.....there is no such thing as a free lunch. But to put it into perspective it might take a minimum wage employee a whole hour to make enough to buy a Big Mac value meal, whereas Bill Gates and Richard Branson make enough money to BUY the WHOLE RESTAURANT while they are SLEEPING.

 

[erivera571]

Hey STR8UP, maybe a noob question, but here it is anyway:

Assuming you buy a house with 0 down and owe $120,000, but of course you rent it out so the tenants pay for it. The monthly bill to the tenants is $1,100 ($1,000 to cover loan, and a little for yourself), so in ten years ($1,000 * 120 months = $120,000) it will pay off the loan you took out to buy the house. Ten years later the loan is paid off, what do you do at this point exactly?

Keep charging the tenants the monthly $1,000 for passive income I'm guessing (loan is paid, so 100% profits minus taxes and etc)? Sell the house and profit? Would the tenants find out they could've OWNED the house ($1,000 * 120 months = $120,000) and leave? Sorry if this is a stupid question, I'm just a little confused as to what happens once the tenants pay the house off :crazy:

 

[Bigg Boss]

I cosign this to the fullest. Rich Dad, Poor Dad started me on my track to financial independence. I've been reading and putting everything into action ever since. You guys should also check out The Millionaire Next Door. That's a MUST READ.

I'm a 19 year old college student and I work as a waiter at Red Lobster. I swear if I would love to drop out and work on building my wealth because by the time I'm 22, I'm going to be in pretty good space. This is my first year "thinking rich" so I basically started with $0. My goal for this year is $10,000. This is off working mostly and some I get from my parents (2weeks allowance of $200). Next year, I'm going to start investing. I've been practicing the Forex and I also am reading up on real estate investing.

 

[Bigg Boss]

^Leverage/debt is the worst way to build wealth in the long run. Debt financing only makes sense if you're paying for a USEFUL education or starting a business. Debt should not be used to leverage the returns of passive investments like real estate and equities, as we have seen during this financial crisis.

I believe you have a better chance at accumulating wealth buy borrowing money and making an educated decision in the real estate market rather than paying for an education to get a job that may lay you off (and mind you this takes approximately 5 years of losing money before you make a dime), much less starting a business (you already know the majority of businesses fail).

I'm not saying you're wrong though, these are all just opinions.

 

[strong like bull]

it definitely takes educated decisions and calculated risks to get ahead of the game, or out of the rat race.

out here in arizona theres tons of decent houses with 3 bedrooms, 2 baths, 2 car garage, front yard, backyard, and a pool selling for 100k or less. theres even homes selling for 30-60k, albiet in a neighborhood you may not want to live but could definitely rent out. the amazing thing is your mortgage on 40k is maybe 500 bucks, yet you can easily set the rent for tenants at 800 or 900/m.

youre automatically cashflowing 300+ a month profit. and in this kind of situation you have plenty of options:

-if you wanted to play it safe you could put that 300+ aside into a "maintenance acct" for the house incase any unexpected repairs or costs come up. some people get worried about investing in real estate because of the risk of paying out-of-pocket for unexpected situations.

-if you were profiting 300-400 or more and wanted to be aggressive, you could put that money towards a second property.

-if you wanted to (dunno if i would) you even have to choice of putting that extra cashflow back towards the mortgage, and paying it off early. people pay a 30-40k car loan off in five years. how long would it take to pay off a 40k loan if you were essentially doubling up on mortgage payments? after being paid off, youre still renting it out for 800/900 a month.. youve essentially got yourself a cash cow to milk indefinately.

what if you had 2 or 3, 5 or 10 of those cash cows?

just some things to think about.

my only advice though before taking risks like that, is to make sure youre grounded and have a solid base before starting. a lot of the people that lost big on real estate were those who put themselves in situations they couldnt handle. they were already in debt, or just plain couldnt afford it. people that had no emergency fund, no concept of debt management, who didnt do their homework.. they just ran out there and dumped all their savings into these investments, because that was the hot thing to do. and when something came up they had no money to fix it and they lost big.

same thing goes with the recent stock market crash. i hope everybody here understands how many people out there, already in their 50s or 60s, who were planning to retire in the next few years, now CANT retire because they losts tens and hundreds of thousands of dollars that was tied to the market. stocks and 401ks and whatnot are all subject to loss when the market goes down. the bottom line is that the market rides in waves. longterm it will average well and make you money. but if you were planning to retire in 5 years and all the sudden a down market hits, and you lose $100K+ out of your retirement portfolio... how much longer do you now have to wait until you can afford to retire? can you wait that long?

you gotta build your financial future on a solid foundation. that way when the wind blows it doesnt get knocked over.

but keep in mind, investments for sure have their place. even if you had protection, no debt, savings and an emergency fund - if you never invest, youll probably never have enough money to retire. taking calculated risks in investments and business will bring you lots of money. money that you HAVE TO HAVE to retire.

thats why i think its so important to point out that Russ whitney, robert kiyosaki, str8up and others all tell you the same thing - before you make ANY decisions, do your homework.

just some things to think about...

-slb

 

[STR8UP]

Bullsh!t.

This applies in ANY economy, ESPECIALLY when real estate is at an unprecedented low, and you can buy properties that can easily rent for a positive cash flow. The only issue today is getting financed.

If you're gonna make a claim at least back it with SOMETHING.