How "Exactly" Does One Become A Millionaire Utilizing RE?
I listened to Rich Dad's Success Stories last night at work (FOOEY) and for some reason I came up with that question but what bothered me was that I couldn't come up with a decisive answer without a rebuttal.
So below are the questions I asked myself and the rebuttals.
1. By having a substantial amount of equity in properties? One would have to obtain a 15 year loan but that would limit cash flow for that period.
2. By purchasing or having properties valued at over $1,000,000. Then you would be $1,000,000 in debt although good. Maybe by subtracting all liabilities and pray the numbers are over the $1,000,000 mark which is sort of alike a net worth calculation. :-? In that case I am sure they are many millionaires here.
Can someone please explain?
I look at how much easily convertible liquid cash do I have to determine net worth. If you have many real estate properties, then 80% of the FMV minus the mortgage is your networth on the property.
Millionaires are calculated only by looking at networth.
The above poster is right, of course, but it can be rather dreary, I'm afraid. It's more fun and not cheating if, as you calculate the numbers of the properties you control, you see that chillingly symbolic 7th digit and declare yourself an "unactualized millionaire." After all, you do control a million's worth. Then you can deduct the debt and face the sobering truth, that it's still a ways off...but achievable, and hopefully getting close every day!
Here is what I heard as the definition of a Millionaire, and of course it is open to argument
Paper Millionaire is when you control assets with a worth of $1 million+
Net Millionaire is when your net worth, is $1 million+ whether it be in RE or Business Equity, Stocks, Bonds, Cash, Investments, or a combination of all.
Being a Cash Millionaire is when you can raise $1 Million dollars in Cash within 72 hours
Hope this helps
[ Edited by mgraval on Date 10/13/2004 ]
lets not get greedy, who really needs a million?
sustanance & covering is all that is really required, and you get that with a skillet and a blanket
John
Thanks All!
Kiyosaki never said that you become a millionaire in RE. He said THROUGH RE. Big difference. He advises to become an owner of a business system. Acquisitions of RE is a system that you can master. Flips - is a job/profession that you can do. You will not become a millionaire with flips unless you flip multi-million dollar commercial buildings or a whooooole lot of SFR homes. A better way would be through 1031 exchanges. Like Kiyosaki said - play monopoly. Buy some houses, exchange them for an apt. bldg. I live in an appartment property that recently sold. Somewhere around 550 units ranging from 1/1 tiny apartment to a luxurious 3/1.5 townhome. On the average, I would estimate the property was bought at 15k/unit. Maybe less, maybe more. Avg rents are $500. Do your numbers, see what that cashflow is like. Now imagine having 10 properties like this in your pocket? On a more realistic scale, it's easy to pull 1500-2000/mo out of a 4/6-plex. multiply that times 50. And it's really easy to own 50 managed 4-plexes with even 1000/mo remaining positive cashflow. Your annual passive income becomes $0.6mln. Can you save enough of that over 2-3 years to have a million? And I didn't even mention your net worth and your equity accumulating in your RE. Equity-shmequity... give me hard cold greens NOW.