When you want to generate wealth through real estate, be sure to check out these 3 wealth generators, if you want to do them correctly.
00:00 what are wealth generators?
There are 2 things to understand, we make money through active income, which is working for our money. And we make money through passive income, which is working hard for a time first, and then enjoying the money that keeps flowing in at a later stage.
When you get started with real estate as your passive income state, there are these 3 wealth generators that you need to keep in mind.
In this video, I’ll explain using an example, for you to understand more clearly.
00:37 wealth generator 1: cashflow
The first one is cashflow. Now, we talk about return on investment (roi) very often. But in the end, it always needs to generate cashflow, otherwise the whole idea on return.. Makes no sense. So be sure to create cashflow from the real estate that you get.. Don’t believe that cashflow will come after a few years of ownership. The property you get, should generate positive cashflow right away, from day 1.
03:54 wealth generator 2: appreciation
The great part of real estate properties is that it grows in equity. And that equity can be paid out, over time. On average the value of property grows with about 3% per year. And this is not that it has grown 30% in 10 years, but it grows 3% compounded on each year. And that’s the cool part. But yes, there are years that we have a downturn of the market, but it doesnt mean, when the value of nearby properties are low, you should sell your property for low. Just hold on to it, and let money just keep on flowing from that property.
07:58 wealth generator 3: loan payment
Wealth can be accumulated over time, and also from the loan you have taken for the property. Each month, when you are paying off your mortgage, you are also paying off a little bit of principle within that loan, and that is the money that is yours to keep. But it is set in stone, and can only be taken out when you re-finance the property or when you sell the property. But it is your wealth that is growing within the property. So yes, this is also wealth growing.
12:31 how can I do it?
Now, many ask me. How can I do it. Very simple. It all starts with the downpayment, be sure to save and invest money until you have that down payment for your first property. And yes, this can take time, it took me 3 years to save and invest my money to start with my first property.
And once I got my first property, instead of spending the money I got from my property. I used that extra money to invest as well, and let my wealth grow even faster, and so, property number 2, only took 2 years to save up for… And as a snowball effect you can grow your properties faster and faster!
14:27 why your money goes to amazon and apple
The most important thing is to track your expenses, otherwise you’ll spend more money than you think you have… And before you know it, there is no money left to invest and save for that down payment.