Report: What the Rich are Teaching Their Children
You are smack dab in the middle of the best wealth building opportunity in your entire life. EVEN AVERAGE AMERICANS CAN CREATE WHAT WILL BE MILLIONS AND MILLIONS OF DOLLARS. And guess what, the rich are taking advantage in a big way. Are you?
I will tell you from first hand knowledge that my AFFLUENT CLIENTS are vividly watching this real estate market. Things have gotten too good and they are not about to let the best buying opportunity since the great depression pass them by. They are doing everything they can to personally move up to nicer homes and absolutely, positively pulling out all stops to get their children into a home!
If you’re not thinking this way you are probably not rich or at least you don’t think like the rich. And if you ever want to become rich or afford your children that opportunity, this is the time to reevaluate your thinking.
I personally purchased my first condo (at the insistence of my mother) at age 19, lived in the home for several years then moved out and kept it as a rental. Two years later I moved back in, remodeled and sold it shortly thereafter. I had owned the home for just over 5 years and in that time I figured that I had made just over $58k in mortgage payments (loving the tax deduction along the way), when I sold the home I PROFITED OVER $73K ALL 100% TAX FREE. Holy crap, I made more in profit than I had made in payments over those 5 years (and two of those years I wasn’t making the payment, the renter was)! Oh yeah, and this was right through the 2001 stock market meltdown when the sky was falling and everyone was ruined for life. I couldn’t have dreamed of saving that much money in 5 years, the stock market would have sucked it up into www.yourmoneyisgone.com or some other here-today-gone-tomorrow dot com.
Top 5 reasons the RICH are insisting their children buy now:
• Real estate is at a steep discount. Regardless of whether this is the exact bottom of this cycle or not, we are dang close and prices will increase from here at about 5% annual by average.
• Utah still has one of the top 5 best job markets in the nation and has positive net migration. This creates a foundation of value under our real estate market, supplying not only demand from new residents but also ensuring jobs are available for home buyers.
• • $8,000.00 tax credit. Under the new Economic Stimulus Plan signed into law by President Obama on 2/17/2009 you have until the end of November 2009 to purchase a home and qualify for this credit. The tax credit no longer requires any repayment so long as you live in the home for three years.
• 4.500% to 5.00% 30 year fixed interest rates. The historical average for fixed rate mortgages is a hair over 8%. On a $250k home you are saving $225k in interest over 30 years. So basically your home is on sale, about $225k off normal price! With this type of interest rate savings, who cares if you’re not buying at the absolute lowest possible price, over time you will pay less than anyone else due to your interest savings.
• Rental rates are increasing at record pace. This affects you in two ways, if you are renting now, you have seen increases in the last 12 months and there are more to come. With a mortgage you fix in an interest rate and LOCK IN YOUR MONTHLY PAYMENT. And if you ever decide to rent your home, your rate is fixed but you can increase your renter’s payment as much as the market will bear.
The rich have a way of seeing through fear and finding the pot of gold at the other end. People who don’t think this way (or don’t think at all) allow the media and their neighbor who can’t sell their home to paralyze them. Warren Buffet, the richest man in the world was recently quoted saying “be cautious when others are greedy and greedy when others are cautious”. Think about that, that means when the crowd is going one way, run don’t walk the other direction. Buy low, sell high! You can’t buy low, sell high if you are waiting for the rest of the herd to buy before you make a move. You have to think ahead of the herd if you want to profit more than the herd.
I’m told that the Chinese sign for trouble and crisis are the same sign used for opportunity. I think that shows incredible wisdom on their part. Ask yourself if you are thinking this way. Are you thinking through the decision, reviewing historical real estate trends, analyzing how much interest you save with a 5% loan versus a 6% or 7% loan? Well guess what, neither are most people, that’s exactly why you should be doing this kind of thinking, data gathering and research.
This wisdom or ability to think through the fear is shared by the very few among us who are very rich! Think about your first home purchase or your parents first home, would you or they have still profited in the end if you paid 5% more for it? Most of us would have, in fact most of us still would have made a boatload. So think about what is more costly, missing the bottom by a couple percent or allowing yourself to be paralyzed by fear, waiting until you see the headline in the newspaper saying THE REAL ESTATE MARKET IS BACK, UP 15% YEAR TO DATE. Holy crap...if you wait that long you could be priced right out of a home.
Can you think of a single rich person that does not own at least their own home, if not more rental homes and other real estate? It is obviously a trend for rich people to own real estate so if you just mimicked their behavior you would probably be better off. This real estate cycle, like every cycle, will naturally separate the people who think of opportunity and those who react out of fear. The great thing is you get to make that decision right now. It is your call as to which side of the fence you are going to live the rest of your life. I hope you think very carefully and join me on this side!