How You Can Create a Real Estate Income Machine
People Always Need a Place To Live
The average person today has many investment options. How many of them can be considered self-financing? The key to self-financing investments is those that offer recurring income. What investment choices do we have that are genuinely self-financing? Let’s take a look at a few of the most popular investments people make to see if they are self-financing:
STOCKS: For the most part, stocks are not-self-financing because they do not regularly pay income to the investor. Only stocks that regularly pay dividends would fit our description as self-financing. Doing some quick Internet research, you can find approximately 300 stocks paying consistently monthly dividends. Only these 300 stocks might be considered self-financing out of the thousands of options available.
MUTUAL FUNDS: In most cases, these investments are not self- financing. They do not regularly pay income to their shareholders. Yes, some do, but most don’t. Those that do, and re-invest income toward acquiring more shares, come with transaction costs that severely eat into the investor’s income.
BONDS/CDs/MONEY MARKET ACCOUNTS: The majority of bonds pay interest income to the investor. These bonds would be self- financing. However, Zero Coupon bonds are not self- funding because they don’t pay interest until maturity. That’s hardly perpetual money-making. Another challenge with these investments is they usually don’t have a very high rate of return.
LENDING MONEY: Loaning money to others would be self-financing if your borrower paid interest each month. The interest income you received could be used to loan additional funds to other borrowers.
Lending money is risky if you don’t acquire some form of protection, such as a lien, on their property. However, with this higher risk, you’ll find higher rates of return. The other downside to lending money is the lack of investment appreciation. Throughout the loan payment period, your profits are tapped out at the interest rate charged.
REAL ESTATE (HELD FOR RENT): Now, I’m a bit biased on this investment choice. But real estate is one of the best self-financing investments you can make. Rentals because it pays for itself and, in many cases, it provides additional income that can be used to purchase other investments.
Why is this idea of self-financing so important for investors? It’s important because self-financing investments help you build wealth faster. With investments that are NOT self-financing, you need to use your own money to acquire more of the investment.
How do you do that?
Your first step is to download the report below, because:
Being an investor in small real estate properties will not make you rich overnight, but over time you can build what I call slow wealth! You make money in real estate when you buy, not when you sell! All my client’s do well with this philosophy that I share and as J.P. Getty said: “Investors bank on climate, while speculators bet on the weather.”