Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
You miss the point. Most people never figure that out. And most of the ones who do are decades older than that kid, who made the epiphany at 16 years of age. He is credited.
I'm not missing anything at all, he has a hell of a savings rate and has benefited greatly from two great runs in two different asset classes while using leverage
This guy really took his risks in real estate, and luckily for him they paid off. I plan to do something similar through index funds, but without leverage risk, meaning I'll be financially independent in my early 30's.
Leverage with mortgage is like taking Margin account with stocks. You can go high very fast, but you can also fall really fast.
Wait til 8% interest rate, and he will lose that millionaire status very quick unless he doesn't get greedy and sell it before it collapse
So if you invest 40k a year for more than a decade when the market when it is up 150% since 01/01/09 and you invested in real estate that has recovered to the tune of 50%? Well doesn't seem shocking
3330 a month @ 8% for 10 year is 610k plus 200k in real estate gains it's his ability to save a high portion of income and the discipline to keep plugging away
That's a very inspiring story. Major props to that guy. As stoutboy said, the point isn't that it was easy to do because of the market being down/leveraging. The point was that every skill he employed was extremely simple, made using common sense, planned ahead and relied on solely having the discipline to stick to your plans.
He basically used skills that almost anyone is capable of learning if they put their mind to it. None of what he used requires an Ivy league degree, connections, certain IQ, rich parents etc. And honestly his strategy works even when the market is not horribly down. I basically used the same strategy as him. However, I started a bit later after the bottom of the market and I'm less frugal then him. But I'm almost certain to reach a million in net worth by 33. Will everyone reach a million in net worth by 27 using this strategy? Absolutely not. However, almost everyone using it will be extremely successful and eventually join at least the top 10-15% of the USA in terms of net worth well before they retire.
My brother did the same thing. Though he went into the Army, at age 18. He only has about 5 years left of active duty and then he'll retire and be set up for life by age 40.
I think the assumption is when rates more than double it could have a negative impact on values. It's not necessarily true though
Of course it does. Think about the current value of Real Estate at 8% interest rate, at that time new buyers will be facing monthly payments are 70% higher. This will lead to less affordability, therefore less demands, which lead to drop in prices.
Exact reason why Stock deserve larger PE when interest rates are low.
Of course it does. Think about the current value of Real Estate at 8% interest rate, at that time new buyers will be facing monthly payments are 70% higher. This will lead to less affordability, therefore less demands, which lead to drop in prices.
Exact reason why Stock deserve larger PE when interest rates are low.
If the rates exploded overnight it might have that impact but rates rising in general don't have that drastic of an impact
Who are you quoting? Bankrate.com does what for a living?
Would you go ask a car salesman, if his cars are good? I wouldn't.
My parents bought their house in 1993 when interest rate was exactly at 8%, houses were cheap, real cheap, but few can afford them. People were making less money than they do today, but not by a lot less.
Bottom line is, interest rate has a direct impact on housing values.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
