How is your New Year going so far?
How ’bout that stock market?
What’s the definition of Volatile? “Unable to hold the attention fixed because of an inherent lightness or fickleness of disposition.” I’d say the stock market is a little fickle right now, wouldn’t you?
So where do we put our money to make money for us? Start a business, invest in a new business, real estate, annuities, bonds? There is never a shortage of options. Do you know what most millionaires have in common? Two things. They are lifelong learners and they diversify.
Chris Hogan (Dave Ramsey’s right-hand retirement planning man) has a new book out called Everyday Millionaires. Already a top seller, this book gives real life examples of how people accumulated wealth to achieve their retirement goals. Lifelong learners read, are curious, and set goals.
Their second trait is that they diversify. You know the old saying, never put all your eggs in one basket? I followed that when I went into real estate in 2005. That was before the crash and all the luxury agents were sitting pretty. Then 2007 came and most of them went out of business. Diversify. Our motto is to provide luxury marketing and service to everyone, from a $200k house to a million dollar house.
One way to diversify your investments is to invest in real estate. This may be your year. The market is stabilizing which means there may be more opportunities to find decent deals in price ranges that will rent well. Think about this scenario:
$60,000 down payment (20%)
Your tenant is paying down your mortgage for the next 10 years. You have some positive cash flow (at least $300-$400 per month) on the house each month as well but even if you save that for repairs and updates prior to sale, you end up ahead. After 10 years, you owe about $237k. At just 3% average appreciation per year (that could even be going down for a couple years and then going back up at an average of 4-5% per year), you sell the house for $400k – a $103k return. You nearly doubled your money in 10 years. These are conservative numbers.
Put that same $60k in the stock market at a 5% average return per year and you are at about $97k in 10 years, a $37k return.
The Next Steps
- Want to learn more about investing and where to invest? Talk to agents like us that have been selling since before the crash and will be selling after the next correction. We always sell with resale in mind.
- Another important investment . . . invest in yourself and your family/community.
- Check out Chris Hogan’s book on Amazon and then call us to put your financial plan into action, 678.744.8206.
Happy investing! Let’s hope this year is better than the last in the stock market!
What would you like to hear more on? Contact me and let me know your thoughts.
Sherry & Co