Basic Math

Unlocking Passive Income and Leveraged Wealth: The Power of Real Estate Investments

There are many reasons for you to buy property. Two very big ones are passive income and leveraged money. Let me explain:

Have you noticed that how much you earn relates to every hour you spend working? Every minute of your work life measured out in pennies? How can you get ahead if you have to spend more of your precious time to make more money? You can’t. That’s why you must invest so you can enjoy your weekend, and your investments can continue working. Real estate is one of those important investments.

Here’s my example…I’m going to give you $10,000. What are you going to do with it? (OK, in this scenario humor me. You’re going to buy a house.)

In the alternative example, you’re going to go buy $10,000 worth of stock. Something moderately safe. When you go buy that stock (for the sake of simplicity) you get $10,000 worth of stock. That’s it. When the stock goes up, you make 3% on your $10,000 ($300). Not bad — better than investing in your friends’ bar tab.

If you go buy a house (with a mortgage), you get $200,000 worth of stock for $10,000. Did you get that? You get $190,000 more “stock” when you buy real estate. So when housing prices go up (let’s say 3%, to make it comparable to the stocks) you make 3% on $200,000. That’s $6000 in gain!

All that, before you even got dressed for work.

Have more questions or want professional advice on buying or selling a home?