A Beautiful Story
According
to Social Security, 90% of Americans are retiring at or below
poverty
income levels. The main reason for this is that they are saving
for
retirement instead of building passive streams of income. They
retire
with only social security income and their meager savings.
We
will call this Business Model No. 1. It’s scrimping and saving
your way
to retirement either in a 401k, CDs, mutual funds or some
equivalent
typical passive saving method.
Special Note: Remember that a
family is a business. It is a business that is supposed to run at
a
profit. Most people never learn this simple point.
Let’s look at the results of Business Model No. 1 over a nine-year
period compared with Business Model No. 2.
Business
Model No. 2 is building wealth and Passive Income streams with
real
estate. (Note, this differs from passive savings) We will keep it
simple and only look at single-family property for this example.
Beginning facts
Let’s
look at the median income in the US. As of 2015, the median income
in
America for a family is $50,502 according to the Census Bureau.
If we take a conservative approach and decide to save 10% of our
income
for investments that is about $420 a month.
I
understand that the vast majority of people can’t and don’t do
this.
They live paycheck to paycheck with no savings at all. That is why
the
average 65 year old only has $35,000 to show for 40+ years of
working
40, 50 even 60 hours a week.
But for this example, let’s say they do it.
What Results will you get in 9 years (and 32 years) with Business
Model
No. 1?
According
to BankRate.com, the average stock market return since the turn of
the
last century is 9.4% — 4.8% in price appreciation, plus approx
4.6% in
dividends. The average inflation for the same period has been
about 3%.
At the end of 7 years, you will have saved up about $45,000.
At the end of 9 years, you will have saved up about $70,000.
It will take you 32 Years to save up $1,000,000
Because of inflation, your $1,000,000 will only be worth
$388,337.03.
Now
you have to start taking out money from the principle effectively
forcing yourself to “pray you die before you run out of money.”
Where
are the golden years? Travel, grand kids, cars, houses, charity
and
legacy. Just pulling out the equivalent of $40,000 a year in
today’s
money means you have less than 10 years worth of savings. What if
you
live longer?
Now let’s look at Business Model No. 2: Building Passive Income
Take the average of one of our investor's last 7 deals.
$20,000 Equity Capture
$400
a month cash flow after principle, interest, taxes, insurance
(PITI)
and monthly management fees, maintenance and vacancy reserve.
$12,000 down. This is the total down payment including everything
out
of pocket.
Start
saving the same $420 a month but instead of the typical person
does in
Model No. 1, you conitnue being different as you've been doing by
keep
real estate investing and buying income-producing assets from
Georgia
Equity Dawgs instead of speculating in the stock market.
Our investor started out taking 29 Months to save up $12,000;
Now Saving $820 a month ($420 from earned income, $400 from cash
flow).
Now
taking 15 Months to save $12,000. Purchased another income
property
from us taking the same average for all their income streams... of
$400
net cash flow...
Now saving $1,220 a month
10 Months to save $12,000. Now Purchase another income property
from
us, And
Now saving $1,620 a month
7 Months to save $12,000. Now Purchase another income property
from us,
And
Now saving $2,020 a month
6 Months to save $12,000 and buy another house from us,
Now saving $2,420 a month
5 Months to save $12,000 and buy another house from us,
Now saving $2,820 a month
4 Months to save $12,000 and buy another house from us,
Now saving $3,220 a month
4 Months to save $12,000 and buy another house from us,
Now saving $3,620 a month
3 Months to save $12,000 and buy another house from us,
Now saving $4,020 a month
3 Months to save $12,000 and buy another house from us,
Now saving $4,420 a month
We are now at the end of year 7. Let’s see where we really are.
10 Houses
Picked up $200,000 in equity
$4,000 a month in passive income
Where are you at with Business Model No. 1 in the stock market?
You’d
have $45,000 and no monthly income.
Let’s go just two more years: You will average about one house
every
two months over this period.
Two more years and that is 12 more houses.
We are now at the end of Year 9. Let’s see where you are.
22 Houses
$440,000 Equity Capture
$8,800 a month in positive cash flow
Where are you with your savings program in the stock market?
You’re at
$70,000 and no monthly income.
Obviously there is no comparison financially. Building wealth with
real
estate is much more effective.
But now let’s see how this works out at the end of nine years.
How
do your bills come in? Monthly, right? How does $70,000 in the
stock
market help you pay your bills? It doesn’t. How about that $8,800
a
month passive income? All your bills are paid aren’t they? Yes.
The
average family in the US spends $4,009 a month.
Could you quit your job if you had $8,800 a month in passive
income?
For most people the answer is yes.
Remember:
As soon as your passive income meets and exceeds your bills,
you are retired. It has nothing to do with age.
We have 2 investors in their late 20's that have done this.
How long will you live in retirement?
How well do you want to live in retirement?
Can you enjoy your golden years? Travel, grand kids, cars, houses,
charity and legacy.
In
conclusion, building wealth with real estate is so much more
effective
than speculating in the stock market it is not even comparable.
So
get out there and feel confident, call us and listen to our free
recorded message or fill out the contact form on this website and
start
building passive streams of income for you and your family.
