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Discover Wealth Building Secret

Here are some of the reasons that you should never have equity in your home.

1. It doesn't eam anything. Equity in your home has no bearing on your home's market value. Your house will appreciate the same amount whether you have equity in the house or not.
2. You can't get it when you need it. It is highly illiquid. When might you need to have access to your equity the most? Very likely when you need it to handle some sort of financial emergency, should your income become interrupted for any reason. The problem is that if you do not have an income, even temporarily, you cannot qualify for a loan to get access to the equity in your house, because a mortgage company is not going to loan against your house, rather it is a loan against your ability to pay it back. Without an income you cannot be approved for a loan.
3. It's worse than having money under your mattress. If the money were under your mattress, you could pull it out and spend it, unlike illiquid equity in your house that you cannot spend.
4. It is not really your equity. If you lose your house to foreclosure, you not only lose your house, you lose all your equity too. How often does this happen? Last year, right here in the metroplex, 28,000 families lost their homes to foreclosure, and most foreclosures are not a result of someone losing their job, they are caused by health related issues. The families still lost it all, their homes and all of their equity.
5. The money that you pay to the mortgage company to pay off the principal of your mortgage actually decreases in value every year. Put your money someplace else where it can multiply not depreciate.
6. Money invested in other real estate properties can never be lost unlike the money "invested" in home equity. What are some of the ways you can lose money when it is the form of home equity? Falling real estate values, foreclosures, liens, judgments, and creditors. Equity in your home is a bad place to have your nest egg. It will not see you through the financial storms that will likely cross your path sometime during your lifetime.
7. Money invested in income producing properties is pretty safe. You get to enjoy the upside of the projects, receive income and tax deductions.
8. Your money is safer in many other projects than just having illiquid equit
9. You can refinance, sell and buy additional property with the profit, and pay no capital gains tax by filing a 1031 exchange.
10. You get to enjoy the upside potential of most income producing properties.
11. Finally you can manage most of the properties yourself, thus increasing your cash flow.

So if your goal is to create wealth with your money, putting equity into your homes will not accomplish it because we confuse wealth with saving. Most of us are destined to windup with our houses paid for and little else, according to a recent Barron's magazine article.

Don't fall into that trap. Please let us help you to take the simple steps necessary to put yourself on the path to a happier and richer retirement. We'll show you how to harness the power of your mortgage, tum your home into a wealth building adventure, and you control the money.

$710,000 Lesson on a $200,000 House

Therefore, you have a choice. You can pay cash to buy a $200,000 house, enabling you to own it outright, or you can buy that house with 20% down. Let's explore each of these scenarios in detail and see which is better at helping you achieve your true goal-accumulating wealth.

Roland just received $200,000 from the sale of his prior house. Or maybe he exercised some stock options, or got an inheritance, or received an insurance settlement. It doesn't matter where the money came from. The point it, he's loaded-and he wants to buy a new home which costs $200,000. Roland pays cash for the house. This takes all his cash, but it lets him avoid mortgage payments. In 30 years, his house will be worth $600,000, assuming it grows at the rate of 3.5% per year. Pretty smart, he figures.

But LeRoy takes a different approach. LeRoy too has $200,000 in cash. Like Roland, LeRoy also wants to buy a $200,000 house. But LeRoy puts down ouly 20%, or $40,000, obtaining a $160,000 mortgage. The monthly payment is $1,064, but it really costs LeRoy less than that because the mortgage interest is tax-deductible (something Roland failed to consider), and the tax savings reduce his monthly mortgage bill by $240,making his net payment just $824 per month. To help him make those monthly payments, LeRoy invests the $160,000 he didn't give the bank, and earns 10% per year on his money. He's got to pay taxes on those profits, and he does so but at the 20% long-term capital gains rate, not the 28% ordinary income tax rate. Thus, LeRoy earns a monthly after-tax return of $1,067. After paying for the loan, he's got $243 per month left over, which he reinvests. After 30 years, LeRoy (like Roland) has a house worth $600,000 (and, like Roland, it's fully paid for by then). And that's not all. LeRoy also still has his $160,000-as well as another $550,000 from investing $243 per month over 30 years.

Roland wanted to avoid the expenses of a mortgage. LeRoy wanted to accumulate wealth-and if doing so meant carrying a mortgage; LeRoy was wiIling to do it. The result? LeRoy's net worth is $1,310,000-more than twice as much as Roland's!

If this makes money sense and you would like to learn more

CALL

Frank or Suzette Shushok
For appointment 972-542-9030

Since 1968
www.theexperts-realtors.com

Email: theexpertsrealtors@yahoo.com