How You Can Create a Real Estate Wealth Machine
People Always Need a Place To Live
The average person today has many investment options. How many of them can be considered self-financing? The key to self-financing investments is those that offer recurring income. What investment choices do we have that are truly self-financing? Let’s take a look at a few of the most popular investments people make to see if they are self-financing:
STOCKS: For the most part, stocks are not-self-financing because they do not regularly pay income to the investor. Only stocks that regularly pay dividends would fit our description as self-financing. Doing some quick Internet research, you can find approximately 300 stocks paying consistently monthly dividends. Only these 300 stocks might be considered self-financing out of the thousands of stocks available.
MUTUAL FUNDS: In most cases, these investments are not self- financing. They do not regularly pay income to their shareholders. Yes, some do but most don’t. Those that do, and re-invest income toward acquiring more shares, come with transaction costs that severely eat into the investor’s income.
BONDS/CDs/MONEY MARKET ACCOUNTS: The majority of bonds pay interest income to the investor. These bonds would be self- financing. However, Zero Coupon bonds would not considered be self- financing because they don’t pay interest until maturity. That’s hardly perpetual money-making. Another challenge with these investments is they usually don’t pay a very high rate of return.
LENDING MONEY: Loaning money to others would be self-financing if your borrower paid interest each month. The interest income you received could be used to loan additional funds to other borrowers.
Lending money is risky if you don’t acquire some form of protection, such as a lien, on their property. However, with this higher risk, you’ll find higher rates of return. The other downside to lending money is the lack of investment appreciation. Throughout the loan payment period, your profits are tapped out at the interest rate charged.
REAL ESTATE (HELD FOR RENT): Now, I’m a bit biased on this investment choice. But real estate is one of the best self-financing investments you can make. This is because it pays for itself and, in many cases, it provides additional income that can be used to purchase additional investments.
Why is this idea of self-financing so important for investors? It’s important because self-financing investments help you build wealth faster. With investments that are NOT self-financing, you need to use your own money to acquire more of the investment.
With a self-financing investment, you can use income from the investment to acquire additional investments.
How do you do that?
Download this free 16 page report now and find out