FINANCIAL LITERACY AND REAL ESTATE INVESTING
April 12, 2016 By Larry Arth
April is Financial Literacy month, how do you compare to the rest of your friends, family, city, state or even the world? If you are happy with your financial literacy, congratulate yourself as you most likely took the initiative to gain the knowledge on your own.
I would love to see more (or for that matter, any) financial literacy taught in school. I know it has been many years since I have graduated school but there was very little taught about financial literacy.
Interestingly enough financial literacy is indeed one of the most important attributes that will successfully get us through life and yet most people graduated still having trouble balancing a checkbook.
For those of us who take the vested interest in gaining our own education and understand the concept of finances and how to use the knowledge to get us through the successes in life are better for it.
The Aftermath of the Global Recession
Are we a society of debt? After the great housing bubble and the recession that followed did we learn from those horrors? I know I certainly spent a great deal of time learning everything I could about the topic. According to Wallet Hub, the country as a whole has run their credit card debt up to $153 Billion since 2012. A full 20% of Americans spend more than they make and a whopping 54% of the population does not yet have anything saved to a rainy day fund.
The states that rank in the top 5 for wallet literacy
5. South Carolina
>> There is a great deal of diligence on financial literacy throughout the country that you can learn about from Wallet Hub
Learn more or pay more
It is reported that those people who do not understand the concepts of compounding interest indeed rack up more debt. Pay more on fees and pay higher interest. This essentially keeps you working harder at your JOB (Just Over Broke) to survive. I believe we were not meant to just survive, but instead we are here to THRIVE
Invest In Real Estate and Thrive
There is a reason that better than 90 percent of millionaires made their wealth in whole or in part by investing in real estate. To thrive in life you need as many income streams as possible. Real estate investing is capable of giving you more income streams than any other investment and it can be done passively. Meaning you can make this money 24/7 while you are sleeping, playing or at work making more money.
Real estate is the ideal investment described in the acronym I.D.E.A.L. … it lays out the 5 wealth building principles
1. Income = Positive cash flow
2. Deductions = this investment offers the most tax deductions of any investment which of course lowers your annual tax liabilities. As the saying goes, “a penny saved is a penny earned”.
3. Equity = equity build up comes from you paying down your principle balance each month using the rent money (Other people’s money)
4. Appreciation = perhaps the number one wealth building principle is the appreciation of your property. The average property is said to double in value approx. every 10 years.
5. Leverage = real estate investing allows you to use as little as 20% of your own money and borrow 80% to invest in a property. This 80 percent leverage allows you to enjoy all the above wealth building principles by only using 20% of your own money.
Perhaps the best investment of all is the investment of time to learn everything you can on financial literacy. This time commitment may give you the best ROI of anything else, Followed closely by real estate investing of course.