THE MODERN DAY RAT RACE
Most likely you have heard the expression. Maybe you’ve even dreamed of ways to get out of the Rat Race. The concept is that employees get stuck on a treadmill or hamster wheel. They’re constantly in a routine that is supposed to bring them closer to the “cheese” (money, success, …); but really they just end up exhausted—and no closer to their goal.
Enter COVID. Rat Race obliterated. Problem not solved—just changed.
Some people have even been unceremoniously dumped out of the rat race, with a layoff, downsizing, or furloughs. 15 or more years with a company, a partial pension, and now what? If a job or career path can’t get you to where your financial security and freedom need to be, what will?
COVID has brought so many of us back to simple living: home-schooling, less commuting, cooking at home, etc…. Real estate investors are also going back to the basics. One of the best books covering the foundational Real Estate Investor premises, is Robert Kiyosaki’s, Rich Dad Poor Dad. It’s an easy read for the 2020 Summer of the Backyard.
Specifically, Mr Kiyosaki talks about your j-o-b: Just Over Broke. Yes, I’d say that sounds quite appropriate considering what we’re seeing in the Canadian economy. Gone are the days where you could get a safe job, work 25-30 years, and collect your pension. A few still manage to pull this off, but most of us need to find ways to create our own financial freedom.
If your stocks and mutual funds aren’t much help either, maybe it’s time to consider a new approach. Why real estate?
- Well, in Alberta, houses are pretty much on sale! We love the idea of buying at an extreme low in the real estate cycle.
- Borrowing money is darn close to FREE—okay, we exaggerate, but not by much.
- When you buy right, there is monthly cashflow.
- With tight lending restrictions, many people are forced to rent—which means lots of tenants (customers) for our real estate business.
- We have leverage: we only invest 20%, but benefit from 100% of the profits.
- Mortgage paydown is done by our tenants—we literally grow our capital by $5000, $10000 or more each year as our mortgages are paid down.
- Some properties can have forced appreciation; for example, new flooring, paint and lighting can completely update a home and add value. At the very least, you’ll attract better tenants, and probably earn better rent when it looks “new and improved.”
- And sometimes you have appreciation: it depends! This is the icing on the cake!
- All this AND your original investment is backed by a real kick-able asset.
- Oh yes, and did we mention that you can insure it to 100% of today’s value? And next year’s value …. Stocks are not insurable.
In addition, here’s a suggestion for family game night, The Rich Dad Cashflow Game. Yup, it’s a board game about getting out of the Rat Race. You can find the game on Amazon, except when it’s sold out. The whole family can “play” with the ideas of real estate investing, before spending a real dollar.
Still worried about all those news headlines about tenants and real estate? Partnering with experienced investors can create great profits for both parties, with lower risk. Or chat with us anytime to learn more about growing your Financial Freedom through real estate investments.
