Shush! I needed those, and they were, like, 60% off. Thirty bucks cheaper than I had planned on spending for inferior ones.
Okay fine it was the shoes. And the parking here, and the lunch there, and the dinner there, and... Yeah. I need to stop living above my means, peer pressure be damned.
Crikey! Where did that coffee go? I swear the cup was full a second ago.
A fella from my High School class whom I ran into at a reunion did exactly the opposite.. he lived WAY below his means and socked the rest into bonds until he could get together a downpayment on a commercial property, then he went from there. He is not rich, but he is wealthy now.
Mind you, he didn't have any fun for 10 years... but maybe its worth it to be able to retire at 35.
Yeah, that's similar to what I planned to do, but then I fell into the Middle Class Trap: Slip gradually into the "need" to keep up, activities-wise (mercifully, not possessions-wise*, in my case), with your spendier friends, who make a lot more than you, or who got family money, or who don't think about thirty years from now, be it out of necessity, hubris, or anything in between. I've had a lot more fun these past ten years than I expected to eleven years ago, but that can still be done on a more conservative budget, and I need to shape up in the name of good sense.
* The bicycle was a worthwhile investment for fitness and recreation, and an unsuccessful attempt to defuse my burning desire for a hot rod. (It was certainly not, as one rather dim mind perceived it, an attempt to gain social status.)
It takes some time to build up capital, but as long as you are younger than 55 you can do it no sweat. You just have to be iron firm about how much of what you make goes into long term planning, setting a percentage that never gets spent on anything else but wealth building. Never put too much into savings or checking, always put money into high yield vehicles and, ultimately, real estate. Again, almost all the money from the properties would be going back into producing more wealth, spending none of it. Once your time is getting too strained, you can go to working part time on jobs, part time on your properties. Eventually you'll have enough income producing properties to stop working at your regular job, and then you'll have enough to stop working entirely. You have to grin and bear being a landlord for awhile, until you have enough income that you can hire it all done.
It is literally a fool proof way of getting wealthy. But you can't do that nonsense that was so crazy in the 80s, the 'no down payment' thing and 'skip' loans that crashed the housing market back then.
I've said this to people before and have gotten 2 questions that are important:
1) Why haven't you done this yet? Well, because I'm stupid and only just figured this out a couple of years ago. Plus I wanted to have a house before I started investing in real estate, which has slowed me down considerably. 2) Why isn't everybody doing this? See above. :) Plus, most people hate the idea of being a landlord. They also don't realize how much work it is to maintain one rental property, let alone a dozen, and so they give up after one or two and sell off. Last but not least, most people don't have the luxury of putting aside 15% of their income after taxes to put into real estate, and even people that DO don't want to live below their means.
Remember.. even if you are earning no money after expenses on maintaining a rental property, you ARE earning capital every month that is going into the property's equity. So on a property that has a $4000/m mortgage, and you earning $5000 on it you are getting something like $3500 a month in equity. After a year that is $42,000. If you have 5 like this, that is $210,000. You can use that equity to buy more properties and have a machine that is generating millions of dollars a year for you within 10 years, with only 1/2 a years pay to have started the whole thing.
Do the math man! The only pitfalls are not holding on long enough, or buying too high to begin with. If you sell too soon, the bank gets your money because of how they front loas interest. Thats another reason I'm waiting to start this whole thing. The market is softening and so prices will start coming down, or at least they will stagnate long enough so there will be opportunity.
A very smart person once said, when asked about the stock market, "Only invest in something a Bank would give you a loan to do." Too right.
Yeah, I know. You're right. My (1) is "I've known this for a while, but I've lacked the discipline to put the plan in motion, and it's always been easier and more instantly gratifying to live for the moment, especially when my own sense of mortality has been reinforced a few times."
![[identity profile]](https://www.dreamwidth.org/img/silk/identity/openid.png){kind=small}
![[personal profile]](https://www.dreamwidth.org/img/silk/identity/user.png)
timeasmymeasure
no subject
Date: 2006-03-27 02:22 am (UTC)no subject
Date: 2006-03-27 02:53 am (UTC)no subject
Date: 2006-03-27 01:33 pm (UTC)Okay fine it was the shoes. And the parking here, and the lunch there, and the dinner there, and... Yeah. I need to stop living above my means, peer pressure be damned.
Crikey! Where did that coffee go? I swear the cup was full a second ago.
no subject
Date: 2006-03-27 01:45 pm (UTC)no subject
Date: 2006-03-27 02:08 pm (UTC)no subject
Date: 2006-03-27 03:27 pm (UTC)Says the student with loan payments looming ;)
no subject
Date: 2006-03-27 02:18 pm (UTC)Mind you, he didn't have any fun for 10 years... but maybe its worth it to be able to retire at 35.
no subject
Date: 2006-03-27 02:46 pm (UTC)* The bicycle was a worthwhile investment for fitness and recreation, and an unsuccessful attempt to defuse my burning desire for a hot rod. (It was certainly not, as one rather dim mind perceived it, an attempt to gain social status.)
no subject
Date: 2006-03-27 04:46 pm (UTC)It takes some time to build up capital, but as long as you are younger than 55 you can do it no sweat. You just have to be iron firm about how much of what you make goes into long term planning, setting a percentage that never gets spent on anything else but wealth building. Never put too much into savings or checking, always put money into high yield vehicles and, ultimately, real estate. Again, almost all the money from the properties would be going back into producing more wealth, spending none of it. Once your time is getting too strained, you can go to working part time on jobs, part time on your properties. Eventually you'll have enough income producing properties to stop working at your regular job, and then you'll have enough to stop working entirely. You have to grin and bear being a landlord for awhile, until you have enough income that you can hire it all done.
It is literally a fool proof way of getting wealthy. But you can't do that nonsense that was so crazy in the 80s, the 'no down payment' thing and 'skip' loans that crashed the housing market back then.
I've said this to people before and have gotten 2 questions that are important:
1) Why haven't you done this yet? Well, because I'm stupid and only just figured this out a couple of years ago. Plus I wanted to have a house before I started investing in real estate, which has slowed me down considerably.
2) Why isn't everybody doing this? See above. :) Plus, most people hate the idea of being a landlord. They also don't realize how much work it is to maintain one rental property, let alone a dozen, and so they give up after one or two and sell off. Last but not least, most people don't have the luxury of putting aside 15% of their income after taxes to put into real estate, and even people that DO don't want to live below their means.
Remember.. even if you are earning no money after expenses on maintaining a rental property, you ARE earning capital every month that is going into the property's equity. So on a property that has a $4000/m mortgage, and you earning $5000 on it you are getting something like $3500 a month in equity. After a year that is $42,000. If you have 5 like this, that is $210,000. You can use that equity to buy more properties and have a machine that is generating millions of dollars a year for you within 10 years, with only 1/2 a years pay to have started the whole thing.
Do the math man! The only pitfalls are not holding on long enough, or buying too high to begin with. If you sell too soon, the bank gets your money because of how they front loas interest. Thats another reason I'm waiting to start this whole thing. The market is softening and so prices will start coming down, or at least they will stagnate long enough so there will be opportunity.
A very smart person once said, when asked about the stock market, "Only invest in something a Bank would give you a loan to do." Too right.
no subject
Date: 2006-03-27 04:58 pm (UTC)no subject
Date: 2006-03-27 06:22 pm (UTC)no subject
Date: 2006-03-27 06:23 pm (UTC)