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How to retire at 30 on $1 million

ryanwaggoner.com

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Re: How to retire at 30 on $1 million

#81

Post by ww520 »

illumin8 wrote: post #54

Seriously? You want to get into real estate in the middle of the biggest depression we have ever seen? When property values are still way over-inflated? This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1. Leverage has no place in any retirement account, period! This entire article is a recipe for disaster…

Right now is actually a very good time to go into real estate investment. The price has dropped. The market is in fear. Interest rate is unbelievably low. The economy has somewhat bottomed out.

Re: How to retire at 30 on $1 million

#82

Post by ww520 »

It's difficult to obtain 20% downpayment financing on a commercial loan. 30% is the usual limit lenders would allow. 40% is more typical.

But real estate is a very good way in general for ordinary people to become financially independent or even rich.

Re: How to retire at 30 on $1 million

#83

Post by byrneseyeview »

patio11 wrote: post #43
djm wrote: post #34

I didn't see Tony Wright's article the other day, but I've just read it and the article linked here. I have a few comments. First, for the rest of this comment I'll define income as 'what you've got coming in' and wealth as 'what you keep or what you grow'. Most people fail to make this distinction (If you ask somebody if they are wealthy they will start talking about how much they get paid), but it's important, espe…

how to you value the appreciation in somebody's house when the only meaningful way to value a property is to sell it? I think property taxes are fairly widespread in the US, actually. Your county has a group of assessors, who pick a SWAG based on comparable recent sales and -- ahem -- their desire to have the county generate tax revenue this year, and then you get to pay .8% or whatever of the assessed value in prope…

I've heard proposed property tax systems that work that way: you pick a property value on which you'll pay taxes, but you give the government the right to buy your property at that value.

Re: How to retire at 30 on $1 million

#84

Post by hugh3 »

someone_here wrote: post #62
illumin8 wrote: post #54

Seriously? You want to get into real estate in the middle of the biggest depression we have ever seen? When property values are still way over-inflated? This is only the start of the article's problems. The next thing he advocates is putting 20% down on a $6.5 million apartment complex, effectively leveraging 5 to 1. Leverage has no place in any retirement account, period! This entire article is a recipe for disaster…

You could invest in Canada. Property values have been stable.

Currencies, on the other hand, have not. If you shift your $1 million USD across to Canadian dollars, and the Canadian/US exchange rate returns to its historical norm, then you can (effectively) lose 30% of your money quite rapidly, assuming USD is what you typically spend.

Re: How to retire at 30 on $1 million

#85

Post by robryan »

dabeeeenster wrote: post #17

My dad spent 30 years in private banking for a big swiss bank, investing money long term for rich people. His advice to me when he retired: The only way to invest money long term and relatively risk free is through property - everything else is just bullshit.

Anyone got any knowledge of Australian real estate? Which on the surface appears to be a lot less likely to go through the same downturn American real estate faced due to population growth outpacing new housing, especially in terms of housing a short distance from decent city infrastructure.

Re: How to retire at 30 on $1 million

#86

Post by jimbobimbo »

mark_l_watson wrote: post #37

When I was 24, one of my best friends who was two years younger starting researching the issue of how to invest for the long term and he also came up with the rental property plan. We both bought condos that we lived in ourselves for a few years and we have both had about 30 years of rental income from. He bought another couple small units, and he quit working as a programmer when he was 40, he and his family live ve…

"Debt is bad idea" - it is not as long as your income is sufficient to cover payments and pay yourself. It's always better to have only 20% of the skin in the game rather than 100%.

Re: How to retire at 30 on $1 million

#87

Post by rphlx »

mark_l_watson wrote: post #37

When I was 24, one of my best friends who was two years younger starting researching the issue of how to invest for the long term and he also came up with the rental property plan. We both bought condos that we lived in ourselves for a few years and we have both had about 30 years of rental income from. He bought another couple small units, and he quit working as a programmer when he was 40, he and his family live ve…

The point of debt is that when the real estate market drops, you declare bankrupcy and let the lender eat most of the loss. Donald Trump has done this like 5 times.

If you own outright, you eat the entire loss yourself.

Basically -- debt increases upside and reduces downside risk. And inflation helps you pay it off. No wonder we're addicted?

Re: How to retire at 30 on $1 million

#88

Post by andreyf »

byrneseyeview wrote: post #83
patio11 wrote: post #43

Earlier quoted context omitted.

how to you value the appreciation in somebody's house when the only meaningful way to value a property is to sell it? I think property taxes are fairly widespread in the US, actually. Your county has a group of assessors, who pick a SWAG based on comparable recent sales and -- ahem -- their desire to have the county generate tax revenue this year, and then you get to pay .8% or whatever of the assessed value in prope…

I've heard proposed property tax systems that work that way: you pick a property value on which you'll pay taxes, but you give the government the right to buy your property at that value.

Is there a name for this kind of game? I think the most common example I've heard is "you cut the pie, I pick who gets which slice (assuming everyone wants the largest one)".

Re: How to retire at 30 on $1 million

#89

Post by rphlx »

ww520 wrote: post #82

It's difficult to obtain 20% downpayment financing on a commercial loan. 30% is the usual limit lenders would allow. 40% is more typical. But real estate is a very good way in general for ordinary people to become financially independent or even rich.

Maybe it was historically. But "Past events do not guarantee future results". Athough, people never really seem to believe that.

Re: How to retire at 30 on $1 million

#90

Post by thibaut_barrere »

dedward wrote: post #41
thibaut_barrere wrote: post #28

Earlier quoted context omitted.

I really believe this is true, from what I've seen around me. That said, bankers and advisors know that this is somehow assumed to be common sense, and quite often use that as an argument to get you onboard investments that are not interesting at all in most cases (apart for them :-).

THe key point in there is "long term" .... as in youth to retirement... .and that fit the lifestyle of people who are old retired bankers now. It's still true - real-estate, by it's nature, is probably a good long-term investment when compared to anything else.

It may be true depending on your context - but don't depend too much on "probably" :)
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