“Get your money to work for you.”
That’s the myth of the middle class.
It sounds good. But it won’t create wealth.
A generation of 401(k) investors have discovered that.
Why doesn’t it work? Inflation, emotion, taxes, fees, and volatility.
Though compound interest “works” on a spreadsheet, that’s why it doesn’t work where it matters – real life.
The 20-year annualized S & P 500 return was 7.7%. Investors’ return was 4.8% – that’s before taxes and inflation. It is less than zero in real terms. Source: MarketWatch
Getting Other People’s Money (OPM) to work for you creates wealth.
It’s an epiphany to learn that everyday people like you can use OPM three ways at the same time.
How? Nothing fancy or unproven. It’s carefully-purchased buy-and-hold real estate.
You use the tenant’s money for passive income, the government’s money for tax breaks, and the bank’s money for leverage.
1. Your tenant works about 10 days per month for you, paying you one-third of their salary.
2. Your government incentivizes you to provide others with housing by sheltering part of your rent income from taxes and allowing you to defer capital gains tax infinitely.
3. Your bank allows you to make a return on the money that you’ve borrowed from them (while the tenant pays the interest). This is called financial leverage.
Use money, not people. Be an ethical operator, not a slum lord. Provide clean, safe, functional housing.
Now you have a real, proven vehicle for wealth creation. It crushes what most have – compound interest that they learn is hollowed once they bite into it.
OPM and leverage are the next level. They differentiate wealthy from middle class. Yet it’s available to everyday people.
Be wealthy. You can do a lot more good in the world when you’re rich than when you’re broke or struggling to barely support yourself.
Now you know how to be wealthy.
I discuss this and other groundbreaking wealth tactics on the Get Rich Education podcast. Don’t know how to listen to podcasts? Grab our free Get Rich Education app.
Thought getting your money to work for you creates wealth? It doesn’t! That’s a myth. My international best-selling E-book is now 100% free, 7 Money Myths That Are Killing Your Wealth Potential. Get it here for a limited time.