Accumulation of stuff seems to be the new success metric. Here is a story about Diderot that will illustrate the point.
In the 18th century, a French writer, Denis Diderot received a gift: a beautiful scarlet dressing gown. The fabric was gorgeous. The colours were rich. The craftsmanship was spectacular.
Diderot immediately threw his tattered old gown away. He did not need it anymore. His new gown was breathtaking. Of course, he needed to make a few extra purchases to accommodate that gown. In the past, if one of his books was covered with dust, he would simply use his old gown as a rag. But he could not wipe away dust with his
beautiful new gown. He’d need to buy some dust rags.
When there was excess ink on his pen, he used his old gown to wipe it clear. He couldn’t do that with the new gown. He’d need to buy handkerchiefs, or perhaps he’d need better pens. But those are small purchases, right? A small price to pay to maintain such a beautiful gown.
Diderot began to notice that the rest of his home looked shabby in comparison to the gown.
His drapes were threadbare and faded, in contract to the rich colours of the gown. He’d need to replace them...Read More
I am no real estate investment expert. I have used tried and tested ways to evaluate an investment before
going down the road of deeper evaluation and due diligence. In order to evaluate a property’s income potential, I always start with the One Percent Rule: Does the monthly rent equal one percent of the purchase price or more? If the answer is yes, I continue with my diligence. If not, I move on to the next investment property.
Purchase Price: $100,000
$100,000 x 1 % (0.01) =
Is the monthly rent greater than, or less than, $1,000?
In other words: for every $100,000 in price, I look for $1,000 in rental income. If a house costs $250,000, it needs to rent for $2,500 per month or more...Read More
High Income is Not the same as Wealth. Increasing your income is great. But in order to build true wealth you need to use that income to acquire assets than increase your net worth.
Do you ever feel like you just can’t get ahead? You want to start putting money away and investing for your future but there never seems to be anything left after you pay all your bills. If only you could make just a little more money you’d be in much better shape. Maybe when you get your next raise you can invest in your first real estate property.
Oh that’s right…you said that last year. And the year before. But even with those raises you still never had
any money left over. There was always some unexpected expense that came up, or the additional income just seemed to vanish into thin air and you are not really sure where it went.
You my friend have fallen into a trap that all too many of us find ourselves in. You are mistaking a high
income with wealth....Read More
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