Do you think you can get rich by paying too much for your home ?
Do you think the wealthy ever get caught on the wrong side of a real estate deal ?
The answer to the above is a resounding NO !
Your Home as an Investment
A common phrase often heard is that your home is the biggest investment you will ever make. I am not sure how this old saying ever got started, but my money is on the banking or mortgage industry. They are generally the ones with the most to gain from you having too big a housing debt.
First of all, the real estate that you live in is not really an investment. If you can't draw an income from it, then it is really just a place to live. I find it amazing how most individuals have been convinced to think otherwise. Why is it that everyone seems to be obsessed with buying a home well beyond what they can afford or even need? The answer is marketing ! From the banks, the home improvement companies, and yes the numerous reality tv shows. What a scam !
A Place to Live
Yes, a place to live. That is all your home really is. Now that you hopefully understand that, how do you know when purchasing your home is the best option ? Simple. When you can afford it. Decide what percentage of your income you feel is wise to spend on housing and don't go over that amount.
If your local housing market forces you to pay more than you are comfortable with, simply don't buy. It may be wiser to rent your home ( if it's more cost effective ) and invest the difference in income producing investments. This will help you in two ways. Firstly, it will increase your level of income. Secondly, it will give you time to really think about how you will be able to someday afford your dream home.
Home ownership is not always a good thing. Just look at the thousands of foreclosures in the US over the past few years. Many of those individuals will never recover financially from the housing market disaster.
Market Bubbles and Collapses
Most things go in cycles and real estate is no exception. Real Estate has a much longer cycle than most commodities, which is why many people lose money in real estate. They don't have the patience or the resources to wait out the cycle. Many simply don't believe that prices will ever fall.
I live in a current real estate market where buyers actually bid on properties, often paying thousands more than the asking price and often far more than the real value of the properties. Insane. Needless to say I have not been a real estate buyer locally for some time. I have however, been a seller on a few occasions taking advantage of the insanity of the buyers. Very profitable for the seller.
Buy low, sell high is my motto even when it comes to Real Estate that you live in. If you pay too much for your home, it could eventually become the noose that may hang you financially. Don't buy it if you can't afford it. Invest your money instead in something that will pay you an income.
As always, I welcome your comments and suggestions for future topics.
Tuesday, September 25, 2012
Tuesday, September 18, 2012
How to Get Rich - Turn Challenges into Opportunities
Do you think the wealthy go through life without ever facing challenges ?
Do you think they never have to solve problems to get what they want ?
Of course not, everyone has challenges ! It's what we do or don't do to overcome those challenges that make the difference !
Your Biggest Challenge
The first step to overcoming your challenges is to identify your biggest challenge. What is the one big monster in your life or the biggest elephant on your back so to speak ?
For some it may be digging themselves out of debt. For others it may be earning more income to meet current expenses.
Whatever it is, you must learn what you need to do and then just find a way to do it. Remember, if you do nothing to overcome your challenges, you will go nowhere financially.
Determination
The one big thing that separates successful individuals from the average individual is determination. You will notice that a successful person has lots of energy and will not let anything stand in their way to getting what they want.
They know exactly what they want and thy never give up until they find a way to overcome whatever obstacles are in their path.
Overcoming Your Obstacles
The first step towards overcoming your obstacle is to believe you can do it. The next step is to gain the knowledge you need to tackle it head on. Lastly, take action with your new found knowledge and don't give up until you succeed.
Sounds simple, but it is far from it. Most people will become discouraged or be led astray by others. Many will become distracted by things that seem far more interesting or important at the time.
Your future will be determined by what decisions you make today. It's your choice.
Choose to become financially successful. Choose to start working to overcome your obstacles today.
Your biggest obstacle could be your own state of mind. Believe you can and you can. It may be that simple.
As always, I welcome your comments and suggestions for future topics.
Do you think they never have to solve problems to get what they want ?
Of course not, everyone has challenges ! It's what we do or don't do to overcome those challenges that make the difference !
Your Biggest Challenge
The first step to overcoming your challenges is to identify your biggest challenge. What is the one big monster in your life or the biggest elephant on your back so to speak ?
For some it may be digging themselves out of debt. For others it may be earning more income to meet current expenses.
Whatever it is, you must learn what you need to do and then just find a way to do it. Remember, if you do nothing to overcome your challenges, you will go nowhere financially.
Determination
The one big thing that separates successful individuals from the average individual is determination. You will notice that a successful person has lots of energy and will not let anything stand in their way to getting what they want.
They know exactly what they want and thy never give up until they find a way to overcome whatever obstacles are in their path.
Overcoming Your Obstacles
The first step towards overcoming your obstacle is to believe you can do it. The next step is to gain the knowledge you need to tackle it head on. Lastly, take action with your new found knowledge and don't give up until you succeed.
Sounds simple, but it is far from it. Most people will become discouraged or be led astray by others. Many will become distracted by things that seem far more interesting or important at the time.
Your future will be determined by what decisions you make today. It's your choice.
Choose to become financially successful. Choose to start working to overcome your obstacles today.
Your biggest obstacle could be your own state of mind. Believe you can and you can. It may be that simple.
As always, I welcome your comments and suggestions for future topics.
Tuesday, September 11, 2012
How to Get Rich - Understand the Number 72
Do you know what is significant about the number 72 ?
Do you know why it is so important to building wealth ?
If you read my last posting you do !
72 is a Magic Number
Further to my last posting, I would like to explain further why the number 72 is such an important tool for you to use in building your wealth.
As previously explained, the rule of 72 states that if you divide the number 72 by your investment's current rate of return and assuming you reinvest all of your compounding income once a year at the same rate of return, the resulting answer will be the number of years it takes to double your money.
Ok, pretty straight forward. But why is it so important to building your future wealth ? Let me explain by example.
Suppose you invest $10,000.00 at a yield of 10% rate of return paid annually.
If you reinvest your annual income every year your investment would be worth $20,000.00 in 7.2 years.
Now suppose your investment only yields a 5% rate of return paid annually. If you reinvest your annual income every year it would take 14.4 years before your investment would be worth $20,000.00 (72 divided by 5)
Why So Important
The above example shows just how important it is to find investments with the highest possible yield. Of course most investments fluctuate in value and can even decrease in value over time. Therefore, the rule of 72 should only be used as a guideline for forecasting future valuation levels.It is basically a tool used for estimating future values and in real life will never be exact.
It also does illustrate how valuable it is to invest your money versus leaving it in a bank savings account. The best bank accounts currently pay a yield of only 2% at best. Leaving your money there would take you 36 years to double your money. (72 divided by 2) Not a wise choice.
72 and You
Get comfortable using the rule of 72 and you will be able to see if a potential investment is suitable or basically good enough for your investment portfolio. Remember though, if an investment does not pay out regular income, the rule of 72 will not help in your forecasting. This is because you have no basis for your future growth other than guessing that your investment will rise in value each year. In reality, all investments, good and bad, rise and fall in value over time and are subject to many variables and risk factors.
The rule of 72 is merely one of the many tools at your disposal to aid in your building of future wealth. Use it for estimating your future values and comparing the effects of different investment choices. It will serve you well.
As always, I welcome your comments and suggestions for future topics.
Do you know why it is so important to building wealth ?
If you read my last posting you do !
72 is a Magic Number
Further to my last posting, I would like to explain further why the number 72 is such an important tool for you to use in building your wealth.
As previously explained, the rule of 72 states that if you divide the number 72 by your investment's current rate of return and assuming you reinvest all of your compounding income once a year at the same rate of return, the resulting answer will be the number of years it takes to double your money.
Ok, pretty straight forward. But why is it so important to building your future wealth ? Let me explain by example.
Suppose you invest $10,000.00 at a yield of 10% rate of return paid annually.
If you reinvest your annual income every year your investment would be worth $20,000.00 in 7.2 years.
Now suppose your investment only yields a 5% rate of return paid annually. If you reinvest your annual income every year it would take 14.4 years before your investment would be worth $20,000.00 (72 divided by 5)
Why So Important
The above example shows just how important it is to find investments with the highest possible yield. Of course most investments fluctuate in value and can even decrease in value over time. Therefore, the rule of 72 should only be used as a guideline for forecasting future valuation levels.It is basically a tool used for estimating future values and in real life will never be exact.
It also does illustrate how valuable it is to invest your money versus leaving it in a bank savings account. The best bank accounts currently pay a yield of only 2% at best. Leaving your money there would take you 36 years to double your money. (72 divided by 2) Not a wise choice.
72 and You
Get comfortable using the rule of 72 and you will be able to see if a potential investment is suitable or basically good enough for your investment portfolio. Remember though, if an investment does not pay out regular income, the rule of 72 will not help in your forecasting. This is because you have no basis for your future growth other than guessing that your investment will rise in value each year. In reality, all investments, good and bad, rise and fall in value over time and are subject to many variables and risk factors.
The rule of 72 is merely one of the many tools at your disposal to aid in your building of future wealth. Use it for estimating your future values and comparing the effects of different investment choices. It will serve you well.
As always, I welcome your comments and suggestions for future topics.
Tuesday, September 4, 2012
How to Get Rich - Learn 3 Magic of Money Secrets
Do you ever wonder why getting rich seems easy for others ?
Do you wonder what secrets they must possess ?
Truth is, they understand the Magic of Money and how to make it work for them !
Work for Your Money
Most people understand that you must get a job and trade your time for money. This is how you pay your bills and maybe someday save for your future.
However, most people do not understand how to turn the tables and get money to work for them. The rich understand this principle very well. They have mastered the art of the Magic of Money !
Turn the Tables
In order to turn the tables as the wealthy do, there is one simple lesson to learn. You must have some money in order to have your money work for you. Pretty simple.
However, most of us start out with no money. Then how do you get money ? Some inherit money, some win money and some even steal money. But those cases are rare and are not the ways you should be concentrating on to get your money. For most, you must learn how to save a portion of all you earn, then invest it. Simple. Try saving ten percent of what you earn today !
Magic of Money
1) The saving of ten percent of your income is something I have mentioned many times, but it is one of the most valuable aspects of the Magic of Money. It is the very first step for most of us in creating future wealth.
Without some money, how will you ever be able to have your money work for you ?
2) The Rule of Seventy Two is a very magical way to calculate your future wealth. Simply take the number seventy two and divide it by the rate of return on your investment. The answer will give you the number of years it will take to double your initial investment providing the income is reinvested. Simple, but very effective in projecting your future wealth and income from your investments.
3) The Fifty Twelve rule is basically investing in a way to create an income stream of fifty dollars per month. I have mentioned the details of this method in a previous posting, so I will not repeat it here. To build your income, you simply divide your desired monthly income level by fifty and create that many modules. Simple, but very powerful.
The above three secrets of the Magic of Money are all you really need to start on your way to building your desired level of income and your desired level of wealth that you desire.They can form the very core of your wealth building strategies.
Of course, there is much more you can learn in the world of finance and I encourage you to learn as much as you possibly can. However, these three basic principles (or secrets) can go a long way to ensuring you have a bright and prosperous financial future.
To turn the tables and have your money work for you, you simply must have money. Learn how to save, learn how to invest, then watch your wealth grow.
As always, I welcome your comments and suggestions for future topics.
Do you wonder what secrets they must possess ?
Truth is, they understand the Magic of Money and how to make it work for them !
Work for Your Money
Most people understand that you must get a job and trade your time for money. This is how you pay your bills and maybe someday save for your future.
However, most people do not understand how to turn the tables and get money to work for them. The rich understand this principle very well. They have mastered the art of the Magic of Money !
Turn the Tables
In order to turn the tables as the wealthy do, there is one simple lesson to learn. You must have some money in order to have your money work for you. Pretty simple.
However, most of us start out with no money. Then how do you get money ? Some inherit money, some win money and some even steal money. But those cases are rare and are not the ways you should be concentrating on to get your money. For most, you must learn how to save a portion of all you earn, then invest it. Simple. Try saving ten percent of what you earn today !
Magic of Money
1) The saving of ten percent of your income is something I have mentioned many times, but it is one of the most valuable aspects of the Magic of Money. It is the very first step for most of us in creating future wealth.
Without some money, how will you ever be able to have your money work for you ?
2) The Rule of Seventy Two is a very magical way to calculate your future wealth. Simply take the number seventy two and divide it by the rate of return on your investment. The answer will give you the number of years it will take to double your initial investment providing the income is reinvested. Simple, but very effective in projecting your future wealth and income from your investments.
3) The Fifty Twelve rule is basically investing in a way to create an income stream of fifty dollars per month. I have mentioned the details of this method in a previous posting, so I will not repeat it here. To build your income, you simply divide your desired monthly income level by fifty and create that many modules. Simple, but very powerful.
The above three secrets of the Magic of Money are all you really need to start on your way to building your desired level of income and your desired level of wealth that you desire.They can form the very core of your wealth building strategies.
Of course, there is much more you can learn in the world of finance and I encourage you to learn as much as you possibly can. However, these three basic principles (or secrets) can go a long way to ensuring you have a bright and prosperous financial future.
To turn the tables and have your money work for you, you simply must have money. Learn how to save, learn how to invest, then watch your wealth grow.
As always, I welcome your comments and suggestions for future topics.
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