Save Thousands For Your Retirement With Someone Else's Money
I'm an older sister with two little brothers. Like any big sister, I worried about them when they were little and I worry about them now. Lately I've been worried most about my oldest brother and his future.
You see, he is a talented carpenter. Before that he worked as a chef " and was amazing. He is also extremely good at rebuilding and repairing cars. Anything that requires patience and attention to detail seems to be something he is exceptionally good at. That is, except when it comes to his finances.
Since he's still young (in his early 30s), he feels there's lots of time to work and make money to put away for his retirement. I wish he didn't think this way. The government may not take care of us when we're older, so the time to start saving for your retirement is now.
As his big sister, I decided to help him out by making a plan. My brother has three cars, and he certainly doesn't need all three. I convinced him that one of the cars should be sold. The money he makes from the sale can be put into a savings account, and he'll also be able to start saving about $500 a month.
He can also make extra money by taking on extra jobs. These don't need to be full time jobs- just little side jobs such as kitchen renovations or building fences. Even if he only works weekends, he can have enough saved to put 10% down on a $200,000 house that he can fix up and rent out.
For a couple of years, he can live there while fixing it up and continuing to save more money. Then, he will turn that house into a rental property, renting it out for about $1,400/month. He then buys and moves into a new property that he will call home.
So what happens in 25 years? Let's find out.
If his repairs add $25,000 in value and the house appreciates by 4% every year, then in 25 years it'll be worth approximately $576,743. That means that his original investment has almost tripled in 25 years! Imagine- $1,900 a month of someone else's money going toward his retirement ($576,000 divided by 25 years divided by 12 months)!
"But wait", you may be thinking, "property doesn't always increase by 4% per year". While that might be true, historically the average appreciation of property has been 4% per year. Regardless, after 25 years the mortgage will be paid off by his tenants and the rent he continues to collect can go toward his retirement. Rents and expenses normally increase by 4% each year as well, so in 25 years he could see a positive cashflow from the property of around $2,350 each month.
In 25 years, he will have his own primary residence paid off as well. If he owned nothing else but these two pieces of property, then he will have about $1 million worth of property for his retirement. Doesn't that seem like a simple way to have other people help you save for your retirement?
When I told my brother my plan, he got excited and sold one of his three cars. With the money he's making by helping us with one of our properties, he's been able to start saving for a down payment for a house. - 23162
You see, he is a talented carpenter. Before that he worked as a chef " and was amazing. He is also extremely good at rebuilding and repairing cars. Anything that requires patience and attention to detail seems to be something he is exceptionally good at. That is, except when it comes to his finances.
Since he's still young (in his early 30s), he feels there's lots of time to work and make money to put away for his retirement. I wish he didn't think this way. The government may not take care of us when we're older, so the time to start saving for your retirement is now.
As his big sister, I decided to help him out by making a plan. My brother has three cars, and he certainly doesn't need all three. I convinced him that one of the cars should be sold. The money he makes from the sale can be put into a savings account, and he'll also be able to start saving about $500 a month.
He can also make extra money by taking on extra jobs. These don't need to be full time jobs- just little side jobs such as kitchen renovations or building fences. Even if he only works weekends, he can have enough saved to put 10% down on a $200,000 house that he can fix up and rent out.
For a couple of years, he can live there while fixing it up and continuing to save more money. Then, he will turn that house into a rental property, renting it out for about $1,400/month. He then buys and moves into a new property that he will call home.
So what happens in 25 years? Let's find out.
If his repairs add $25,000 in value and the house appreciates by 4% every year, then in 25 years it'll be worth approximately $576,743. That means that his original investment has almost tripled in 25 years! Imagine- $1,900 a month of someone else's money going toward his retirement ($576,000 divided by 25 years divided by 12 months)!
"But wait", you may be thinking, "property doesn't always increase by 4% per year". While that might be true, historically the average appreciation of property has been 4% per year. Regardless, after 25 years the mortgage will be paid off by his tenants and the rent he continues to collect can go toward his retirement. Rents and expenses normally increase by 4% each year as well, so in 25 years he could see a positive cashflow from the property of around $2,350 each month.
In 25 years, he will have his own primary residence paid off as well. If he owned nothing else but these two pieces of property, then he will have about $1 million worth of property for his retirement. Doesn't that seem like a simple way to have other people help you save for your retirement?
When I told my brother my plan, he got excited and sold one of his three cars. With the money he's making by helping us with one of our properties, he's been able to start saving for a down payment for a house. - 23162
About the Author:
Learn How to Retire with Real Estate with Julie's free Real Estate Investing Starter Tips Guide. Learn how to create financial freedom, positive cashflow and massive wealth with tips like: How to find quality real estate, finding and keeping great tenants, and easy ways to make more money with real estate.
posted by X - Men @ 8:01 AM
0 Comments
0 Comments:
Post a Comment
Subscribe to Post Comments [Atom]
<< Home