Real Estate Investing For Your Retirement

Are you going to be able to retire? And if you do, will you be in a position to enjoy your life, pay medical bills and maintain an acceptable level of health?

Those can be chilling questions if you haven’t thought about them much. If you haven’t given them adequate thought, that means you haven’t prepared for certain inevitabilities.

Real estate investment can help you answer those questions and remove that chill factor.

Let’s face it. Not only will you not want to spend your golden years working, you may not be able to, regardless of whether you would like to. You may live well up into your 80s or 90s and be unable to do the job you are doing today?or any job for that matter.

You need to lay the foundation of security and happiness for your future self. Real estate can help you do that.

This is because, as your investments age, they should be making more and more money for you with less and less work output from you. It’s a sort of financial magic that will serve you especially well in later years. That’s why people get into investing in the first place.

In order to prepare for your retirement in this way, however, you must examine your core. That means that you will need to make sure your needs are taken care of in such a way that you don’t have to spend all of your time scrounging for pennies. You need the time to learn about real estate, and working in someone else’s office for peanuts isn’t going to get you that.

According to Robert Kiyosaki, author of the Rich Dad book series, you need to build a business system that can operate without you, thereby making money without working for it. Then take a portion of that money and invest it, thereby exponentially increasing your earning potential. Have you heard of making your money work for you instead of vice-versa? That is what this means.

As you grow older, you should be working less, not more. This is partly because your ability to work will decrease. But it is also because you deserve to be able to work less and enjoy your life more. Retirement isn’t about being forced out of a job?or at least it shouldn’t be. It should be about leaving a job to catch up with your life. To spend time doing the important things like hanging out with family and friends, engaging in hobbies that you enjoy and becoming involved in life-enriching activities such as spirituality or art. Not to mention getting enough exercise.

If you are in a job now that doesn’t allow you to do these things because it doesn’t pay enough or because you don’t have enough time left over in the day to learn to make a change, then consider switching to a job that pays more or gives you more time. Develop a business system in which you can train people to do the work for you. Then, when that is up and running, and providing you with the money and time you need, start learning about real estate.

Put your extra money into real estate investment?but don’t put in more than you can afford to lose on the learning curve. Real estate investment is a skill like any other and you will make mistakes. Don’t be the farm on your first few purchases. In fact, don’t bet the farm at all. Make sure you are making enough money to live on, and then enough money to invest on.

After a while you should see your money start to grow exponentially. Then you are on your way to a happy retirement.

About the Author:

Alex Anderson Helps Regular-People (Just Like You) To Successfully Invest In Real Estate. Enroll In Her Free - Educational “Investment Property Program” At: www.GreatInvestmentProperty.com

Beginning Real Estate Investing? Increase Your Profits With The Magic Of Leverage

When you invest your money in things like RRSP’s or stocks and bonds your leverage is zero because you have used your own money and none of other people’s money. When you buy a home with a mortgage you have used leverage, which is common in most all real estate investments. You own the down payment of coarse but the lending institution owns the rest.

You bought a house for $100,000 with a $5,000 down payment. The OPM you used, or leverage is 95% and your down payment was 5%. Here lies one of the most important principles for someone just beginning real estate investing or even if you’re well into it:

The More Leverage You Use, The Greater Your Profit Potential.

Now the house you bought for $100,000 has increased in value up to $105,000 in just under a year, not bad. It only appreciated 5% but the good news is the return on YOUR investment is 100% because you invested $5,000, it went up $5,000 so you doubled your money earning a full 100% on your investment. Let’s say that over the next 10 years your property goes up to $25,000 in value, this will give you a 500% return on your money. Leverage is computed by dividing the increase in value by the cash down payment (25 divided by 5 is 5).

If you had $100,000 you could buy one property outright with your cash or you could make a lot of money with leverage and buy 20 properties by putting $5,000 down on each one. So, now instead of having a $100,000 property you’ve got $2,000,000 worth of property. Now let’s say the properties all appreciated by 5% during the first year your profits would be $100,000. If you had bought just the one property instead you would have only made $5,000 in profits.

As you can see, the less of your own money you use, the greater your profit potential and if you were able to buy a property with none of your own money, then the return on your investment is infinite. You can’t divide by a zero down payment. To figure out the return on investment from appreciation, taxes, or principle reduction, always divide by your cash down payment.

We have seen here how leverage can increase you chance for profits, but if you are financially unprepared it can greatly increase your potential risk. Higher earning strategies always have a higher risk potential that go along with them. The super save route of investing the entire $100,000 into one property is totally safe but will give you a much lower ROI. Those 20 properties you bought all have a mortgage on them which you are responsible for so if a few aren’t rented or the rents don’t get paid the money comes out of your pocket. Does this additional risk warrant the use of leveraging? Yes it does but you have to plan ahead and be prepared to handle any possible negative cash flow problems should they arise.

“How to handle negative cash flow” will be discussed in an upcoming article.

Real Estate Investing For Your Retirement

Are you going to be able to retire? And if you do, will you be in a position to enjoy your life, pay medical bills and maintain an acceptable level of health?

Those can be chilling questions if you haven’t thought about them much. If you haven’t given them adequate thought, that means you haven’t prepared for certain inevitabilities.

Real estate investment can help you answer those questions and remove that chill factor.

Let’s face it. Not only will you not want to spend your golden years working, you may not be able to, regardless of whether you would like to. You may live well up into your 80s or 90s and be unable to do the job you are doing today?or any job for that matter.

You need to lay the foundation of security and happiness for your future self. Real estate can help you do that.

This is because, as your investments age, they should be making more and more money for you with less and less work output from you. It’s a sort of financial magic that will serve you especially well in later years. That’s why people get into investing in the first place.

In order to prepare for your retirement in this way, however, you must examine your core. That means that you will need to make sure your needs are taken care of in such a way that you don’t have to spend all of your time scrounging for pennies. You need the time to learn about real estate, and working in someone else’s office for peanuts isn’t going to get you that.

According to Robert Kiyosaki, author of the Rich Dad book series, you need to build a business system that can operate without you, thereby making money without working for it. Then take a portion of that money and invest it, thereby exponentially increasing your earning potential. Have you heard of making your money work for you instead of vice-versa? That is what this means.

As you grow older, you should be working less, not more. This is partly because your ability to work will decrease. But it is also because you deserve to be able to work less and enjoy your life more. Retirement isn’t about being forced out of a job?or at least it shouldn’t be. It should be about leaving a job to catch up with your life. To spend time doing the important things like hanging out with family and friends, engaging in hobbies that you enjoy and becoming involved in life-enriching activities such as spirituality or art. Not to mention getting enough exercise.

If you are in a job now that doesn’t allow you to do these things because it doesn’t pay enough or because you don’t have enough time left over in the day to learn to make a change, then consider switching to a job that pays more or gives you more time. Develop a business system in which you can train people to do the work for you. Then, when that is up and running, and providing you with the money and time you need, start learning about real estate.

Put your extra money into real estate investment?but don’t put in more than you can afford to lose on the learning curve. Real estate investment is a skill like any other and you will make mistakes. Don’t be the farm on your first few purchases. In fact, don’t bet the farm at all. Make sure you are making enough money to live on, and then enough money to invest on.

After a while you should see your money start to grow exponentially. Then you are on your way to a happy retirement.

About the Author:

Alex Anderson Helps Regular-People (Just Like You) To Successfully Invest In Real Estate. Enroll In Her Free - Educational “Investment Property Program” At: www.GreatInvestmentProperty.com