Posted by Wayne-NC on August 08, 2011 at 12:28:20:
But somewhere in an “investment portfolio”, invested net worth has to figure into the total picture of things. Besides, you can use/spend/borrow your equity and invest it for a spread. Only advisable ofcoure if you know what you are doing obviously. In my case, not paying off my home is my choice since I can put the extra cash into better things. Anyway, I’ll take the tax deduction while it still exists though.
the definition of a investment - Posted by Paul
Posted by Paul on August 08, 2011 at 24:23:27:
A common misconception is that your
own home is am investment this is not
true. An investment is defined as
something that brings you cash flow. If
you have to take money out of your
pocket to own it it is not an investment
protect yourself from those people who
try to convince you that you can pay a
few bucks now to get $$$ in the long run
adding to your liability portfolio
Re: the definition of a investment - Posted by Dave T
Posted by Dave T on August 12, 2011 at 17:33:07:
I had always understood that an “investment” involved the purchase of a financial instrument or other item of value with the expectation future returns.
Although it may cost some money to maintain an investment until those returns are realized, I don’t subscribe to the notion that the “maintenance” cost makes a normally appreciating asset a liability.
I will concede Kiyosaki’s argument that things that take money out of your pocket are liabilities is an effective generalization when teaching about wealth building. If the general rule is things that take money out of your pocket are liabilities, and if the objective is to minimize liabilities, then the teaching point is to buy the least amount of house that meets your needs and use your discretionary cash flow to purchase income producing assets.
But, even if the house takes money out of your pocket each month and does not produce income, eventually (if held long enough), the house can be sold for a profit. That still makes it an investment.
Just how I see it.
Re: the definition of a investment - Posted by Jack
Posted by Jack on August 09, 2011 at 02:25:22:
Thanks for sharing your opinion. I don’t agree with your opinion, and I don’t like being lectured to by someone that states their opinions as if they were facts.
Re: the definition of a investment - Posted by Sailor
Posted by Sailor on August 08, 2011 at 08:34:17:
I have to challenge your definition of an investment as something that always brings immediate ca$h flow. I like $$$ as much as anyone, but long-term investments have also provided me w/a good life. In fact, I invest long-term even now to also provide a good life for my great-grandchildren. A balanced portfolio provides for both the present & the future.
Although today’s world eliminates consistent appreciation as a factor in owning one’s home, I think there are still ways to invest in a residence that will pay off big time. Renting gives you 0% return, while a smart home purchase today can provide the foundation for a secure future (e.g., if I was starting from scratch today, I’d look for a deal & a low-interest mortgage on a 4-plex).
Re: the definition of a investment - Posted by Paul
Posted by Paul on August 09, 2011 at 02:34:01:
Not lecturing and to me someone who
would take money out of there own
pocket every month to potential use
the equity in a property would be the
same Lima person who should trade a
billion pennys for $1,000,000
BTW I got $1,000,000 of u got a
billion pennnys to trade for it. Lol
I say this all in light hardness
don’t take my words to heart just
food for thought after all if any one
of us knew it all we would be reading
thease would we???
Starting today… - Posted by Kristine-CA
Posted by Kristine-CA on August 09, 2011 at 13:55:14:
Tye: I’m in agreement that today’s market has opps for young people and/or new home buyers. Buying the right 4-plex to live in is a tried and true strategy…for the right person/family. I find that many young people I know are not too interested in that strategy, or any strategy that involves sweat equity and less than their idealized version of their first home. What about your kids and granddkids? Do you have them on board with the home as an investment strategy?
I’ve bought a lot of houses that were owned free and clear by mothers/grandmothers/aunties. But the next generations couldn’t keep it together just to pay the the taxes on it or find the money to get it probated. I see a definite generation gap when it comes to financial priorities and focus.
Re: the definition of a investment - Posted by Paul
Posted by Paul on August 08, 2011 at 10:24:26:
I’m just trying to get people to shy
away from bad investments. I had this
guy come up and ask me if he should
do this investment that his realtor
was trying to get him into. In this
“investment” he oils rent it out and
only lose 200 a mo in order to het
the property as an investment for log
term wealth. But paying out of pocket
makes it a liability not an asset
Re: Starting today… - Posted by Sailor
Posted by Sailor on August 09, 2011 at 18:45:30:
One of my DDs is my property mgr & her DH is my primary crew, so they are very involved in my biz. Part of my investment strategy is to create a retirement income for both my DDs (as well as education for the great-grands). I had originally hoped that my gift to my kids would be my lifelong independence, not being a burden to them later on. However, all are now old enough that I long since figured out I’d have to set things up myself to continue after I’m gone. You are right, Kristine,that RE initiative doesn’t always get passed down. It seems to have skipped a couple generations here, but I’ve seen an amazingly early entrepreneurial spirit (e.g., lemonade/brownie stand @ age 3) developing in gen 3, so all is not lost.
I’ve got everything set up in trusts, so no one gets property outright, & the funds for maintenance/taxes should be available. No one gets to live free. All properties are income-producing. My mgr. DD runs a tight financial ship, so I think I’m as good to go (literally) as possible. I figure I’ve got another year or so of hard work, then I should be ready to take on extensive travel again. Rocket Man & I had traveled full-time in early retirement, & I’m looking forward to new adventures in distant lands (& seas).
Re: Starting today… - Posted by Paul
Posted by Paul on August 09, 2011 at 14:53:29:
I agree I am 24 and most people
around my age have no ambitions I’m
worried about my generation
Straight From The… - Posted by Wayne-NC
Posted by Wayne-NC on August 08, 2011 at 11:39:19:
Kiyosaki playbook! I believe that “putting cash in your pocket” is not the only way to invest. My mortgage has amortization, and I get (still) the tax deduction. Also, having bought some years ago I even have a little of what used to be called “equity”. Imagine that!
Re: Starting today… - Posted by Chris in FL
Posted by Chris in FL on August 10, 2011 at 06:39:28:
I think at some point what happens with the following generation(s) becomes important to any truly successful investor… The trait of desire and determination to build self-made wealth (or maintain that standing) doesn’t seem to hit many individuals… Especially easy for it to skip generations if the wealth comes while children are pretty young - hence the reason “born with a silver spoon in their mouth” is such a common (and derogatory) term. I pray often that my two boys grow up happy, but also that they have the same type of drive and common sense that I have. I will be careful to teach them, and make them earn their way, more so than give them handouts. Tricky to pass this trait on, because it may be a desire born largely out of embarrassment/frustration at growing up poor; deciding there has to be a better way - puts a fire in the belly??? It must be possible, though, because there are some families where wealth stays from generation to generation, rather than fleeting after the first… “Richest Man in Babylon” has a great story about this - part of why I read that book at least once every year. Keep myself grounded, focused, paying attention, making good decisions.
Best wishes,
Chris in FL
P.S. - I hesitate to say lest I curse myself, but at 9 years old, my older son so far seems to be a saver and planner… Loans his allowance money to his Mom routinely, despite her much larger spending allotment. Plus just recently has started to show real interest in the RE. He rode with me several times this summer, asking questions, saying he wants to learn the business so he can run it one day - very bright (1 of 2 kids in his 3rd grade class to make both 5s on his FCATs). Occassionally asks his Mom and I for odd jobs outside of his chores, so he can earn a little more jingle. I just hope the hard work ethic hits him fully. If so, I think chances of continuing wealth are good. Too early to tell yet about my 4 year old. I would feel so blessed if the boys grew up with the desire and ability to transition into one day running it all… If they start to love RE/wealth building the way I do. That would be my dream come true (I have to remind myself that they must follow their own passions, and those might not be the same as mine, but still how delighted I will be if they do turn out to be the same).
Re: Starting today… - Posted by brandon
Posted by brandon on August 10, 2011 at 12:50:09:
Dont worry about them…rent to them
Re: Straight From The… - Posted by Paul
Posted by Paul on August 08, 2011 at 12:21:05:
Lol equity is an invisible number you
can’t use it unless you sell also
people not paying off there home for
the tax deduction is 1 of the
stupidest reasons to not pay off your
home. That’s like taking $1000 for
$100
And yes I did get that from keosoki
Re: Starting today… - Posted by Paul
Posted by Paul on August 10, 2011 at 20:44:18:
I wouldn’t give him an
allowance my dad never gave
me one and he made me come
up with creative ideas for
$$$ this has helped me not
to associate a job with
money I.e. chores=money and
I see I can make more on my
own… just a thought I am
24 now and hated him for it
then but love him for it now
Re: Starting today… - Posted by Paul
Posted by Paul on August 10, 2011 at 12:53:21:
Lol ya I think this fact though will
give me a lot less competition