Wednesday, January 9, 2008

Real Estate Investing For Financial Security

Anyone who knows anything about Real Estate Investing knows that the most secure path to creating wealth is by investing in real estate; however, before you jump in head must have a financial plan.

Most people don't see the correlation between the two. There are so many methods of investing. You must first decide on what your ending financial goal is in order to figure out which real estate investing path you need to take. Secondly, you must sit down and figure out how much money you have to invest in real estate while maintaining your daily living.

The final and most important concept that we must understand is that a salary and a 401K will never create the wealth that most of us are aiming for in our future. If this was enough, we would not have so many grandmothers and grandfathers handing out smiley face stickers at Walmart. No one PLANS to to be a professional elderly sticker passer outer. On the other hand, no one becomes rich who doesn't make a financial plan unless they are born with that shiny silver spoon.

We all know that there are certain things in life that you just don't want to do...balancing your checkbook and financial planning are right up there with going to the dentist. But the end results of neglecting any of these, is not very favorable. So suck it up and dig in.
The retirement plan of the past:

Work at one job for thirty years, work your way up the corporate ladder, get the gold watch, live off of your pension plan and social security. Pretty straight forward and simple. This retirement plan presents quite a few problems for the present and future retiree.

Problems with the retirement plan of the past:

1. You can no longer depend on your employer to provide for you after you stop working.

First of all...most of us never stay at a job long enough anymore to build up a decent pension. So if we are lucky, we depend on the faithful 401K. The problem with this is that you have to make half of the contributions yourself and if you are a contractor or an entrepreneur you don't even have this luxury! Even if you were responsible enough to start your 401K in your twenties, (which most did not) the rate of inflation will eat away at your saving like rabid dog.

2. You can no longer depend on the government to provide for you after you stop working.

How wonderful are your golden years going to be with $14,000 a year from social security? (Oh, that's only if you contributed the maximum over your life time). Well, I won't speak for everyone but I don't want my big bingo day to be interrupted with clipping coupons and buying groceries with food stamps; however, this is what you have to look forward to if you depend on the government.

Not to mention...when the government set up social security, they only thought that we would live to be 60 to 65 years old. So there may not even be any money left when you need it.

So what do you do?

The present and future retirement plan:

You have to invest your money in an inflation proof entity that will provide for you despite your age. Real Estate is the only investment that is not negatively effected by inflation. It will also continue to grow for you no matter what your age. I attended my best friend's grandmother's funeral today. She lived to be 104 years old. She had the foresight eighty years ago to invest in real estate. She owned several properties in Washington DC. The investments provided for her for her entire life including her elderly care. These investments continue to provide for her children, grandchildren and great grandchildren even after her death. This is the definition of creating true wealth and securing your financial future.

Blessings to your Real Estate Careers,

Valarie Jacobs

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