For Young People
If you are young and starting off, get a job that you enjoy and do your best at that job – you owe that to your employer. It is not just that they owe you a paycheck. You owe them your best effort to earn your pay.
Learn about investing. Learn from as many people as you can at first. Just don’t buy those super expensive programs or courses. Lots of them start off with a lot of bull and hype and tell you how easy it is to be a millionaire in a few short months. Not true. You must commit to working hard at it. Learn hard first. Save instead of spend because you will need some money to start.
Rent cheap and save expansively. Your very first real estate purchase should be an investment property, not your home – especially if you live in Hawaii. Once you get your first investment property, enjoy the positive cash flow, even if it is just $100.
If you feel you must buy a home first (we seem to be programed this way), buy a duplex and rent out one side. Burdening yourself with a high monthly mortgage that eats up your paycheck will leave you without any discretionary income. Having discretionary income will allow you more options such as savings and investments.
Be careful about investing in the stock market to get rich fast. Some people actually do, but they are the very very tiny minority. You are not smart enough to know what the market is going to do. NObody is smart enough, unless they are evil market manipulators who don’t care about you. Invest a bit if you must, but study and learn the market first, then get good tools to help you.
Start building a relationship with a banker, smaller banks are more flexible than the big banks in town. Use bank money as much as you can – Rich Dad calls that leverage – using other people’s money.
Because Hawaii is so expensive, look at markets on the Mainland – in this current economic times, you can get a nice 3 bedroom 2 bath house for under $80,000 fee simple that will rent for $900 easy. If your credit is good, you can put 20% down ($16,000) and finance the rest. Your cash flow will be less because you will have a monthly mortgage of about $400 that way, but you are only putting down $16,000. Less cash flow, but you can purchase more properties. Keep going, keep buying, keep the cash flow coming in. If you can be disciplined and focused, you will build up a portfolio of rental properties and have serious positive rental income. At this point, you will be able to purchase your own home with the rental incomes paying your home mortgage.
That will be a beautiful day!
Imagine, if you are in your 20’s, by the time you are 40 years old, you could be a landlord or landlady overseeing 10 or more of your own properties! This is very very possible on a rather slow pace of buying one property every 2 years. You may surprise yourself and as your knowledge and income increase, you will probably find yourself buying 2 or more properties every year!
Time is on your side. Imagine if Aunty had started investing in cash flow real estate 40 years ago. I could be teaching Robert Kiyosaki a thing or two!
Not only is time on your side, right NOW is a fantastic buying opportunity for anyone with a depressed real estate market with bargains and more bargains, and the lowest mortgage interest rates that I have ever seen.
No money? Make money. Here is a page on some simple rules to live by – and one day you will look back and be glad you paid attention.