Real estate – if you’re going into real estate, you need to have cash reservers because when the market goes soft, it’s going to cost money finding tenants and filling those vacancies. We don’t like vacancies! I hate them and if they come up, it’s a priority in every sense of the word.
With investments, when you can take on more intelligent risk, you’ll be in grander positions to have more fun and make more money.
Economics:
Don’t forget the macro economy is run by a college of corporations and these fraternities run the world. Some major players in these world ruling corporations are Wall Street companies. Interestingly, Wall Street invests around 1 million dollars into the White House for lobbying purposes.
These lobbying pursuits will influence policy makers to pass and write laws to keep the rich rich and poor poorer. This is why there are tax loopholes in every estate and investment portfolio. There are tax benefits for business owners so the owners continue to get rich while their workers are paid much less yet are responsible for keeping the business running. The employees run the processes and systems the owners built themsevels when they were bootstrapping. A modern day worker can be automated with coding and software. That’s why technology is so powerful. A savvy person can bootstrap a six figure generating business with no employees because the entrepreneur has built software which runs the business while he sleeps.
Since the 1970’s (after exiting the Bretten Woods act) the value of the dollar continues to falls while the cost of everything is going up. Said another way, productivity has growing considerable while pay has stagnated since the 1970’s.
Here’s what the rich don’t want you to know – we’re developing into an “inherited wealth economy.” It’s not simple to get rich anymore. Workers can graduate school, get a good paying job, and invest for the long term. That model (the boomer and gen x model) isn’t even working for these people, why on earth would it work for millenials? We need to approach careers with a newfound sense of passion and thinking. If you don’t, life is going to be very dismal indeed.
The wealthy are no longer wealthy because they earned it, but because they inherited it. This is known as oligarchy or inherited wealth, which is killing effective capitalism.
Capitalism isn’t perfect, but it’s the best economic model human’s have thought up at this point.
Capital Returns:
Capital returns average 3-5% per year, while the economy grows at 2-3% per year. So in order to live well, you need to be putting away large chunks of money so it can grow and grow Then, when you pass this off to your children or family, they will have an even longer time horizon to build wealth. The result is we’ll start having dynasties taking over the world.
Thus, capital will be in the hands of a few people, who will buy the political system to reinforce their own agenda. “The rich get richer.”
I’ve read that we could look back with nostalgia, at the early 21st century when we all thought the wealthy earned their wealth. We claim all men are equal, but it’s rubbish. The American economy is moving toward an oligarchy just like old Europe.