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Old 03-16-2013, 02:06 PM
 
Location: Los Angeles (Native)
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True , there are risks in anything. Even the people that invested in those "safe" stocks that went bankrupt lost all their money or most of it..and there will be more bankruptcies of big companies in the future too.

Developing is a bit different than purchasing existing real estate in my mind. Developing is more speculative.

Commercial can also probably be riskier than residential as you mentioned.

The big benefit of residential real estate in my view is that you own a product EVERYONE needs... shelter .

Of course it's also important to pick a good location and make sure the numbers work.

Buying property today at low prices and financing with historically low interest rates doesn't seem to be too risky .
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Old 03-17-2013, 09:00 AM
 
Location: Colorado
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How much of the residential price skyrocket do you think was due to governmental and FED intervention though? I think that if the residential market was left alone, the gains on it would not have been so high. Really, the only reasons I see for an increase in demand for residential property is an increase in income or an increase in population.

With this in mind, do you think that the residential real estate market will do the same cycle in the future as it has done in the 90's and 2000's.
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Old 03-19-2013, 07:27 PM
 
Location: Under a bridge
2,422 posts, read 3,329,584 times
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I used to wonder when I was a little younger how to make a million bucks. I think a lot of it has to do with LUCK. Being at the right place at the right time and/or making a very important connection with someone. If you went right instead of left you might have missed out. I don't buy the "just work hard" bit at all. Many people work their butts off and barely make it. Remember the movie with Robert DeNiro: A Bronx Tale? "The working man is a sucker."

Some business owners are honest, fair and service oriented and struggle while some are sleazy and cheat and make big bucks. Others save and invest and get no-where with their low returns on their investments while others save and invest and earn great returns on their investments. Some pick losing stocks. Some pick winning stocks. Like I said above- lots of it is luck. It's like going to a Las Vegas casino and playing the slots. A few win but most lose.
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Old 03-19-2013, 08:25 PM
 
Location: Los Angeles (Native)
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Phil, not doubt government intervention raised prices this happened during the boom time when the government pushed the idea of "homeownership for everyone" and it's happening again now with low interest rates and other things government is doing.

Hard to say if residential real estate will do the same cycle in the future. No doubt prices in areas that went down will go up though...they are already going up. It seems crazy to think values won't go up especially in areas where the population is growing, unemployment is low and other factors going on.

It seems like anytime a big event or crash happens people think that things will always be made . I am sure many people thought this during the depression and look at all the different time periods there were where America was prosperous. Of course only the future will tell.

If you have money to invest now I don't see real estate being risky especially if you can rent out the property for much more than mortgage and all your expenses. There are many markets like this right now... Unfortunately I don't live in one of those areas...and I need to fix that soon! I see real estate as one of the best investment vehicles for creating wealth.

MountainBiking - I agree luck plays a role, which is sometimes overlooked. I also don't like the idea of "just work hard"
Trading time for money as an employee doesn't lead to riches for the vast majority of people.

Even if someone works for minimum wage at $8 an hour every single waking second (16 hour days) they will only make $128 per day....after basic living expenses and taxes there is still going to be hardly enough money leftover to save.

The ONLY way out of this is through some kind of business or high yield investment.

The big question is ...if you don't personally have money...how do you get someone to invest in you. This is how practically every single person that got rich did it. Maybe family invested in them. Maybe a bank loaned them money to buy property (thousands of real estate investors). A silent partner invested in them. A client invested in them for example Gates's big deal with IBM...in terms of luck. What would have happened if a competitor got the deal with IBM? Would Bill Gates have still become a billionaire?
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Old 03-20-2013, 11:43 AM
 
Location: North Idaho
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Quote:
Originally Posted by MountainBiking View Post
I used to wonder when I was a little younger how to make a million bucks. I think a lot of it has to do with LUCK........
People with wealth make their own luck. People who sit around all their lives waiting for luck to bring them wealth are probably all living on welfare and buying lottery tickets.
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Old 03-21-2013, 01:02 PM
 
Location: Los Angeles (Native)
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I feel there is a lot of truth to this. I do believe a lot of it has to do with people thinking "wealth only happens to others so i'll just work my job and not bother with it" ... I don't think anybody that got wealthy unless they won lotto have this atttitude.

You need to BELIEVE you can do something before you do it.

"If you think you can do a thing or think you can't do a thing, you're right."Henry Ford, (attributed)If you have not taken any serious and dedicated ACTION towards becoming wealthy...can you really complain about not being wealthy?
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Old 03-21-2013, 05:55 PM
 
Location: NE Mississippi
17,925 posts, read 10,516,668 times
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Quote:
Originally Posted by Philosophizer View Post
Share your success story here. I'm struggling to find my way right now and its really starting to eat away at me. I'm nowhere near where I wanted to be at the age of 24. Don't even have a "real" job and feel like other than a having a fun time, earning my bachelor's degree was a complete waste of time and money (admittedly I poorly chose a highly competitive and low paying field).
Slowly. Built a townhouse and lived in one side; rented the other. Worked really, really hard in a field where hard work counts, which is sales.
Got one side paid for, then the other, then bought a house and paid that off, too.
Participated fully in 401K.
Bought 2 year old cars. Except mine; we bought that new in 1990, and we've still got it. Looks great, too.
Invested in the stock market using fundamental analysis, not technical, which, IMO, doesn't really work.
Learned everything about everything I could; mechanics, electronics, business, home building, Roman history, Spanish, navigation tools used by animals, astronomy, everything but sports (utter waste of time)


And I never, ever, ever, gave up.
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Old 03-25-2013, 10:54 AM
 
Location: ATX-HOU
10,218 posts, read 7,218,507 times
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Quote:
Originally Posted by oregonwoodsmoke View Post
People with wealth make their own luck. People who sit around all their lives waiting for luck to bring them wealth are probably all living on welfare and buying lottery tickets.
Nah. "Hard work" is generally for suckers, working smart is generally where it's at. Luck is pretty important. People are born lucky, born in America over say a Congo village during a government uprising. There is a difference between waiting on luck and taking advantage of luck, which usually separates the millionaires from everyone lower.

And this notion that people with wealth make their own luck is pure ego. People with a very significant amount of wealth, this may partially hold true, but the world is so vastly complex and indifferent that making one's luck is fool's good.
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Old 04-02-2013, 12:11 PM
 
Location: NE Mississippi
17,925 posts, read 10,516,668 times
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Quote:
Originally Posted by dv1033 View Post
Nah. "Hard work" is generally for suckers, working smart is generally where it's at. Luck is pretty important. People are born lucky, born in America over say a Congo village during a government uprising. There is a difference between waiting on luck and taking advantage of luck, which usually separates the millionaires from everyone lower.

And this notion that people with wealth make their own luck is pure ego. People with a very significant amount of wealth, this may partially hold true, but the world is so vastly complex and indifferent that making one's luck is fool's good.
There is a grain of truth in what you say, but no more than one.

We could talk about, for example, exactly what constitutes hard work and find some agreement, but perhaps not. Hard work, to me, means constant effort. That means I pass up American Idol and instead learn to analyze a company's cash flow report. And instead of filling my head with facts and statistics of irrelevant basketball stars I read books about people who have made a difference in history. And hard work, to me, includes reading and pondering books such as "Think and Grow Rich, Psycho-cybernetics, and The Richest Man in Babylon"; improving my vocabulary; setting goals.

Do people with wealth make their own luck? I can speak for myself, and say "maybe". "Maybe", because I got lucky, but I also got unlucky in my life. Maybe I recognized good fortune when I saw it, and that's all. I have said in the past that "Sometimes fortune knocks at your door. But more often than not fortune does not knock at all; it stands silently just outside the door waiting for you to open it."

I have opened a lot of doors. And sometimes I have found good fortune there. I just checked; I finished and signed my copy of Think and Grow Rich on August 9, 1970. Since that time I have worked long hours sometimes and sometimes not so much. But I will not be one to join you in saying hard work is for suckers.
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Old 04-02-2013, 02:55 PM
 
Location: NC
10,002 posts, read 9,428,117 times
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Quote:
Originally Posted by oregonwoodsmoke View Post
I had to come back and say this:

A million dollars is not very much money any more. Even if you could earn 10% on it, which is extremely difficult in this economy, that is only $100,000 a year in income and then once all the taxes are paid on it, you are left with about $50,000 to live on.

$50,000 is barely hanging onto middle class by the skin of your teeth and you'd have to be darn good at budgeting to live any way but austerely on that amount. No yachts, no European vacation, no Lamborghini.

So, OP, I suggest that you aim higher.
This...

Quote:
Originally Posted by cruitr View Post
If you're making $100k and only netting $50k, you need a new accountant.
If you are making 100K and losing 50K to tax you are being ripped off by the person doing your taxes. Especially considering chances are a lot of it is capital gains, maybe if you are talking about grossing 100K and then having business expenses, but you are not going to get hit on capital gains and dividends to the tune of 50% of 100,000, even ordinary business income will not hit you like that. The more pressing problem is that it is difficult to get a consistent 10% return especially these days.

On top of this if you are invested in real estate that isn't raw land depreciation it going to take a huge chunk out of your tax bill.

As to getting rich from what I have observed a lot of it is simply being well connected. When you are well connected you get opportunities other people don't.

Last edited by Randomstudent; 04-02-2013 at 03:19 PM..
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