tag:blogger.com,1999:blog-27697009.post372780015590489345..comments2024-02-29T03:21:35.007-08:00Comments on The Great Depression of 2006 : Investment Returns vs HomeownershipJim in San Marcoshttp://www.blogger.com/profile/09435296419912935381noreply@blogger.comBlogger3125tag:blogger.com,1999:blog-27697009.post-51848078366741898212016-02-12T22:46:32.112-08:002016-02-12T22:46:32.112-08:00Hi AIM
Sometimes the article may have no response...Hi AIM<br /><br />Sometimes the article may have no response, not sure why. I agree with you.<br /><br />I believe that you can get wealthy by saving over time. And it takes a lot of it.<br /><br />Of course at todays interest rates, nobody is going to get rich even in their next lifetime. Go figureJim in San Marcoshttps://www.blogger.com/profile/09435296419912935381noreply@blogger.comtag:blogger.com,1999:blog-27697009.post-49072141057942957092016-02-12T19:59:12.309-08:002016-02-12T19:59:12.309-08:00Hey! Where is everybody?
The wealthy mentality ow...Hey! Where is everybody?<br /><br />The wealthy mentality owns rental properties, and the rental income pays the principle, interest, taxes and insurance (PITI) on each property and also give them a positive cash flow or profit after PITI. A portion of the income that they get from rental properties, businesses, stock dividends, bond interest, etc. pays for their personal mortgage, among other things. The poor mentality owns no assets, thus has no real wealth, and works like a slave to pay their mortgage. And the value of their property can drop at any time, putting them underwater. You either collect rent and interest or you pay rent and interest. The wealthy mindset is the American Dream if you ask me.AIMnoreply@blogger.comtag:blogger.com,1999:blog-27697009.post-69478561504828372142016-02-09T00:37:14.698-08:002016-02-09T00:37:14.698-08:00Owning rental properties (income properties) might...Owning rental properties (income properties) might become one of the most popular investment plans for retirees. 4-6% return on their money will beat most fixed income vehicles. And the risk factor is much lower than corporate bonds, junk bonds or risking your capital in the stock market (where a 10-30% loss could happen over a few days) for 2-3% from dividend payments. As a retiree, I'd feel a lot more comfortable with my nest egg capital in some single family residence homes and/or some four-plexes instead of in a 401k or in a stock/bond portfolio. Let's say one puts their retirement capital of 700k into some income property and gets a 6% annual return of $42,000. Have to be living a pretty frugal life to get by on that. Would have to buy at a very good discounted price for a good return. Would lose 10% of that to property management too if one wanted to be mostly passive as an investor (and avoid the proverbial tenants, trash and toilets hassles). If the income properties were bought for cash flow (not hoping for appreciation) and were free and clear, it wouldn't matter much if property values went down since it is the cash flow you'd be after. The real risk would be government, as usual: raising property taxes, taking away tax exemptions and deductions, putting onerous or burdensome regulations or restrictions on landlords (e.g., rent control), etc. It is a new paradigm for retiring baby boomers. They don't have the nice conditions their retired parents had. Many changes to come.aimnoreply@blogger.com