How many of you have made or have a million or better in the bank from real estate investing? I do not mean hold or control a million in properties, but actually have made themselves a millionaire. How did you attain it? Was it in residential or commercial or both?
This may be a little personal, but it’s more of a motivation for a newbie, in my opinion. I will be personally happy when I have a passive income and can do what I want when I want and have fully paid for my childrens college education. (that does not mean I will stop looking to grow my income).
For me, real estate is just a way to accumulate wealth quickly. I use it to funnel as much as cash as possible into life insurance and employee benefits programs to create a truly passive income free of taxes that allows me to do what I want when I want, which is more important to me than some number of money in the bank.
I started in residential and thought about commercial. Now, I’m leaning more towards hard money lending and exchanging real property for TIC interests.
You aren’t going to find many people that have a million in cash. Most people have come to realize that cash sitting in an account isn’t making them money. They most likely either reinvested into more real estate or diverted some of the cashflow into things like stocks and bonds. Simply sitting on cash isn’t productive. If I had $1mil from real estate you better believe I wouldn’t sit on it, I’d use it to control $5-10 million worth of real estate and start working on increasing my net worth.
What Rich_in_CT said is exactly right. We probably have have a lot of people that have over a million dollars in the ground. We can probably all sell a million dollars in houses.
cash is king as long as you know what to do with it and when…Sometimes the hardest thing to do is nothing,just sit and wait in a horrible cash position…I live by the motto be fearful when others are greedy and be greedy when others are fearful…I just dont think real estate prices have even started their true decline (at least not where I live)I put some money to work but I still maintain a sizeable cash position because I feel the worst has yet to come in many sectors including real estate…But as I feel if you are truly going to get started in real estate,more importantly cashflow investment properties this is a good launching point…Not a great one but a start…
But to answer the thread I always maintain a good amount in the bank…Cash is king because you are holding aces always…You can always put it to work but if you dont have it then its a problem…
I agree, I don’t think prices have really started to slide in my area either. We are seeing inventory increase but it has yet to fully effect prices yet as I think people are still a tad delusional, especially the agents and brokers in my state.
Wow, never looked at it that way. Makes perfect sense. If I had the money, I’d be looking to make more money and bank interest just doesn’t cut it.
Thanks.
Glad I found this site.
Rich in CT,
Both …I have closed end funds for dividends, and cash in a money market fund at %5…Like I said before there is nothing worse than seeing opps and having no ammo…I learned long ago that you always have to keep cash on hand…But at the same time money market funds absolutely stink but I can tell you this…When stock,bond,real estate markets start to freefall you feel very safe and smart…Sometimes its best to do nothing…Money doesnt always have to be circulated…At least not for me…I never fall into the train leaving the station mentality when it comes to buying anything…In the past when I felt that urge its been the wrong time historically…
A millionaire is not defined as someone with a million dollars in cash - it is defined as someone who has a net worth of a million dollars or more. There are several people on this board that fit into that category. There is usually a big difference between being a millionaire and having a million dollars in the bank.
If you had a million dollars in the bank, what would that do for you? If you start spending it, you no longer have a million dollars. If you keep it in the bank at bank rates, you might earn $50,000 in interest per year. That’s certainly not much and most people couldn’t live on that. So, having a million dollars in the bank isn’t a good plan unless you’re extremely wealthy. A better plan would be to invest that million dollars into assets that would provide an income stream that you could live on.
This is the difference between someone with a job mentality and someone with an investment mentality. A million dollars in the bank is only marginally helpful in having a good life. A million dollars invested into many millions of dollars of income producing assets will allow you to live a great life without being part of the daily 9-5 grind.