I’ve been reading on the Internet lately that most Millennial's (people who are between 23 and 38 years old today) say they would like to buy a home “someday.” I talk with Millennial's all the time, and some of them earn much larger salaries than I ever did. But most have no money saved, lots of debt, and can’t seem to make ends meet, even if they’re living with their parents or with roommates in a new apartment.
Becoming a millionaire isn’t all that difficult and there are countless ways to achieve that milestone. Some people do it through investing in real estate, others start their own business, while some simply get lucky by winning the lottery or winning big on a game show. What is even more interesting is that you don’t have to be wealthy to begin with nor do you have to earn six figures to reach this goal.
I know some people who earn well over 500,000 and all they have to show for it is a large mortgage payment and a fancy car that depreciates faster than a glass of milk left outside in the summer sun. Anyone can become a millionaire and there are five things you need to do to have the best shot of making that a reality.
Here are 5 ways that you have to follow for become a real estate millionaire
1.Educate yourself - Your first inclination in getting started in investment real estate may be to take the shortest path with the claims of the quickest results like my friend of 30 years, Mark. Many new to investment real estate think real estate seminars are the answer. However, just ask Mark. He discovered that going to many seminars and buying CDs and binders of information does not make you an investor. You can easily find information online to learn how to invest in real estate or just spend several hours on television flipping through. There are legitimate seminars that do offer good training, information and support to help you get started, but you need to do your research. Review online forums where others who have taken the courses leave their comments. You may not glean much from a free seminar except for a few promises, so be prepared for the up-selling of products many of these self-proclaimed gurus offer. There is no sure-fire way to get rich quick in real estate. There may be a few individuals who were at the right place at the right time making the right decisions that made lots of money. However, then again, you hear only about their successes. One thing for sure is you do not need to be an expert to get started or a real estate license or a formal education, but it is good to know the basics.
2.Invest Your Earnings - While saving money is great, you need to put those dollars to work. Imagine them as little green workers, going out into the world to multiply and work hard on your behalf. However, for that to happen, you need to give them a leg up. Putting all of your money under your mattress is not a smart financial move. Stashing it in a low earning bank account isn’t much better. To truly accumulate the kind of wealth it takes to join the seven-figure club, you need to start investing. Many people stress about investing or don’t know where to start. Do you buy stocks such as Apple or Target or should you put your money in a mutual fund? What about index funds? Are they better?
Not sure what a rich life means to you or if you need advice on how to enjoy the wealth you've built while protecting your future? Learn more about how to create your own rich life. A financial advisor can help you wade through all of the incorrect information out there about investing or the latest stock market performance. They can help you determine an investment strategy that aligns with your goals, risk tolerance, and your time horizon. In addition, you should educate yourself as much as possible about investing and the stock market. Investing doesn’t have to be difficult or complicated. Most investors can benefit from owning a diversified portfolio of stocks and other types of investments to hold for the long term. If you’re looking for a good book to get you started, check out the Little Book of Common Sense Investing. The book is written by John Bogle, the founder of Vanguard Group and creator of the world’s first mutual fund.
3.Loan Pay-down - When you buy a property with a mortgage, each month your loan balance decreases. This means, over time, your tenant is essentially paying the loan down for you, helping you build wealth automatically. To make this concept clearer, pretend for a moment you owned a property that you bought for $1,000,000 with a mortgage for $800,000, and it made $0 in cash flow (it “broke even”) and never climbed in value. However, after that thirty-year mortgage is paid off, you’ll now have a property worth $1,000,000 that you didn’t actually save for. Your tenant paid it off due to the “loan pay-down.”
4.Generate cash flow - Your properties should produce positive cash flow after covering expenses and debt service. This way, the income from the properties will continue paying down the debt and building equity, while also providing monthly income. As your portfolio grows, so does your income. Each month you will be getting closer to your goal of becoming a real estate millionaire. Appreciation can be very unpredictable, unless you force appreciation by increasing the cash flow of a property. Generating monthly income is the only way to be sure you're going to profit from your real estate deal.
5.Stick with what you know - When you find an investing strategy that's working for you, be cautious when venturing into different markets and different types of deals. Too many investors have lost a large part of the wealth they've accumulated when they've taken a lot of risk on a deal in unfamiliar territory. Growth takes change and stepping outside of your comfort zone, but that doesn't mean you should do it blindly. Once you've figured out how to become a millionaire in real estate, your success is largely due to the amount of expertise you've gained in the process. Learning as much as you can before getting into a new kind of investment will help minimize the risk.
AUTHOR: RIZWAN KHAN
Hi, this is Rizwan Khan, Marketing Assistant who supports the entire Marketing department by completing a variety job.I had a spell no more striking than other people in my job description. I did all the things you weren't supposed to do. I had a motto: When in doubt, try it. Take a few minutes and drop me a message. I’d love to chat!
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