Financial Madness
How are you doing financially? I hope you are one who is stable. But most are not. Most people are living paycheck to paycheck and have so much debt that it would take a lifetime plus 5 other incomes to pay off. This is heartbreaking!
Do you know that one of the top 5 reasons for divorce is discord about finances? (The number one reason is lack of commitment, but that’s another story!) I mean, the strain of not knowing if you can pay your bills each month is a lot of stress on a couple, especially when that’s not the only thing they have to deal with. When people first get married, they rarely discuss how they will decide on financial matters as they progress through life. Which unfortunately, is a huge challenge as situations arise as to how to spend wisely to secure your family’s stability.
First off, I recommend tithing. God gives us everything we have, and it is our responsibility to give back to his kingdom first. Then with what we have left, we are to be good stewards and manage it wisely. So how is it possible?
Most people these days have not had any formal financial training over the course of their life. Most schools don’t even teach you how to balance a checkbook, or how to build your credit, so if your parents don’t teach you, you’re released to the world with no education whatsoever on how to manage a budget or plan for a balanced life, much less, retirement. And you get out of school going to work just to earn enough to support your current standard of living. You don’t even realize there are many opportunities out there to increase your stability and invest for your future. You don’t have to have a ton of money to begin and invest in your future. You just have to plan. You have to know you have options. It is my goal to make sure you have some resources that can help you make the best decisions for yourself, financially.
I was blessed to have had a grandfather who set an example for me to follow. He taught me that real estate was a good investment. He also demonstrated Christian values, so I saw how he could help others, as well as himself, through that investment. Coming from meager beginnings, he began buying real estate using owner financing as soon as he could. Even with my grandfather in the business, when I bought my first house, I had no idea I could afford it! I didn’t realize that it was even less expensive than renting! And I didn’t have to have a huge downpayment to buy a house. There are so many options out there today, that you can buy a house with no money down! And believe me, most homes continue to appreciate, in addition to reducing the principal balance with every payment. You are investing in your own equity (vs renting where you are paying someone else 100% of your payment). If you are going to have to pay for somewhere to live, wouldn’t you rather pay yourself at least a portion of your payment? And as the value of your property increases, you have more equity with which to improve your net worth, and be able to re-invest your earnings. You build your good credit with each payment over time, and then use your equity to re-invest in another home.
More good news, as you upgrade to a second home, you can even keep the first home and utilize it as a rental. As I mentioned, rent is usually more expensive than your mortgage payment, so someone else can be paying your first mortgage down, and you can have additional cash flow. This is the fundamental way so many have been able to grow their nest egg much faster than others. Putting money in the bank is another way to invest, but with rates of 1% +/- interest per year, you can’t grow it very fast. With real estate, the usual appreciation rate is at least 3%-5% per year, and you’re acquiring that asset using other people’s money.
Another benefit of utilizing a mortgage to buy a property is that, at this time, you can use your mortgage interest as a tax deduction. You also can take advantage of depreciation, and expenses on your property as additional tax deductions. The deductions reduce the amount of taxes you owe. Additionally, you can sell a house that you have lived in for at least 2 of the last 5 years, and not pay capital gains tax on the profit of up to $250000 per person, or up to $500000 for married filing jointly. So you can make $250000-$500000 of profit, and not have to pay taxes, at this time (I say this disclaimer because this rule has been in effect for many years, but of course the tax laws could change at any time!—so go vote and keep your rights!). That’s the only investment that you can make a huge profit and NOT owe taxes on your gain! And this is just the tip of the iceberg on how you can use Real Estate to your advantage!
That being said, I want to make sure you have the advantages to be aware of options to improve your life. I would love the chance to sit down with you to teach you what I have been so fortunate to have benefited from. If you would consider learning about opportunities to grow your financial stability, please let me know. I am your resource, and thrive on promoting others. Please reach out so we can set a time to discuss what you may want to consider for the future. Part of my tithes is to give back to the people in my life, and you are one that I am grateful to invest in!
Check out this link to read how one of my mentors have taken advantage of investing in Real Estate:
In His Service to Unlock Your Legacies,
Leslie Davis
& The Key Performance Team