I used to believe that the stock market was primarily an investment for appreciation, rather than cash flow. I would put my money in low-cost index funds and watch the value increase over time, hoping that I would have enough to live on by retirement.
Since the S&P 500 (or pretty much any other index) doesn’t provide much of a dividend (currently 1.51% as per multpl.com), I assumed I would have to start selling off my stocks to capture my equity gains and have money to live.
A $1 million account in the S&P 500 would currently provide only $15,100…
We’ve all heard it a hundred times. The middle-class dream we all grew up on is to go to school, get a good job, and buy a big house to pay down the mortgage.
In this story, your house is your most important asset, and the key to building wealth.
But is it?
Just to clarify up front, this article is not about which is a better decision, renting or buying. It is about why both are bad for your wealth.
From the strict accounting definition, assets are items that can be sold and turned into cash. …
When I started my career, I believed that the way to get rich was to study hard, get a good job, and work my way up the corporate ladder. I thought that if I put in enough hours, I could get promoted to a great position that paid six figures and have the life of my dreams.
Little did I know at the time how wrong I was.
Once I got a good corporate job that paid six figures, I started to realize that I wasn’t building wealth the way I thought I should. …
Everyone will be glad to see 2020 in the rearview mirror, myself included. The impact on the world both in terms of lives lost and economic pain was significant. However, 2021 can be the year the world comes out of the ashes like a phoenix, and it can be the year that you start changing your financial life for the better.
Everyone’s path to wealth is different, but I will take some lessons from my journey to give you some ideas on how to get started or improve yours.
I studied engineering at a large, public university, but instead of…
Real estate is a great way to build wealth. I have been a real estate investor for the past decade and have used it to grow my net worth at high rates of return and receive monthly cash flow from my tenants.
It is easy to imagine that this path to riches is paved with gold. However, the reality is that the road to wealth is mostly paved with hard work and problems that require your tenacity and ingenuity to overcome.
Investing in real estate is not a “get rich quick scheme”. It can take years to build up enough…
In previous articles, I’ve written about the power of real estate to build wealth. Single-family homes are a great way to grow equity at high rates of return using leveraged appreciation (and are fairly passive if you have a management company), but they don’t generate much cash flow.
Commercial real estate (CRE) produces much higher levels of income but requires a lot more capital to buy and, unless you own triple-net lease properties (NNN) where the tenant handles maintenance, they can be very difficult to manage. CRE is usually not very passive.
When I first started my adult life, I believed the standard middle-class narrative that a good job, a house, and a 401k were the secret to a good life. I worked long, hard hours at my job trying to get a promotion and a raise, I had a big house because I believed it was an investment, and I maxed out my 401k every year hoping I would have enough to retire by sixty-five.
The reality was, however, that even though I had a good job, I wasn’t building wealth. After I realized that what I was doing wasn’t working…
If being the first mover guaranteed success, then we would all be turning on our Altair computers, getting onto the internet with America Online (AOL), running a search with Alta Vista, and then logging into Friendster to socialize.
Tesla has enjoyed the benefits of being the first mover in the luxury electric vehicle market until now. They helped to make EV’s cool, not just something for science geeks, and have proven that there is profit potential in this market.
Having a market all to yourself is a fabulous situation. Companies that dominate markets have significant pricing power and earn incredible…
Many of us think that building wealth is reserved for special people like Warren Buffett or Elon Musk. The rest of us, we believe, have little hope of getting rich.
Regular folks like you and me — with a job, kids, and a mortgage — often struggle to save enough money for retirement or college for our children.
Until I started learning about money and investing, I too struggled to build wealth, despite having a good job with a good salary.
What I learned is that it is critical to buy and/or build assets outside of our day jobs and…
People have tried just about everything you can imagine to get rich. The most popular ideas are the ones that don’t require any work or time. That is why, despite everyone knowing that lotteries are a bad investment, they are immensely popular.
Human nature seems to be that we would rather throw money away gambling on a tiny chance of a big win than spend the time and effort to learn how to invest. Even the brilliant Sir Isaac Newton lost some $20 million in today’s dollars in the speculative South Sea Company bubble in 1720. …
Self-taught investor helping busy professionals learn how to ignore mainstream advice and build real wealth. Build your ark today!