7 Tips to Invest In Real Estate and Become Wealthy

I recently checked the Forbes Rich list of the wealthiest Americans. I could not help but notice the pattern of wealth creation; almost all the wealthy individuals were entrepreneurs or off springs of entrepreneurs. Secondly, they derived their wealth from owning or investing in real estate, technology companies, stock market, manufacturing, entertainment industry, retailing and commodities.This pattern of wealth creation reinforces my belief about the primacy of investing in real estate as vehicle for creating wealthy. I believe you can succeed, investing in real estate. What you need is to have the right attitude and mindset.I have learnt by trial and errors some of the important lessons in real estate investing. My main area of focus has been residential properties. Even if you are an experienced real estate investor, some of the tips I share still apply to your investing, because they are timeless tips that will set you on the road to success.Here are some specifics about investing in real estate that could propel you to wealth quickly. I urge you to take these tips seriouslyTip#1.Start small.The reason you want start small is you are on a learning curve. You want to keep your risk small. I would suggest you invest a lot of time learning the basics of real estate, and a little money in your first deal. Unfortunately most people do the opposite…they invest little time and spend a lot of money. This is the reason many investors fail and they wander why they failed. The fact, real estate is a wealth generator does not mean you don’t have to learn about -how it works to make you wealthy.Tip#2. Invest for value. Avoid speculationWhen you invest for value, you are on the right path to wealth creation. How do you invest for value? The answer is simple. Look for properties with cash flow and potential capital gains. This is important because value investing in real estate is the basis for wealth creation. Donald Trump, Sam Zell, Donald Bren and all the other real estate moguls you can find in the Forbes richest list made their fortune in real estate by creating value. There is a difference between a value investor and a speculator. A value investor buys a property based on overall value, both today and in the future. A speculator buys with a hope that the price of the property will increase…this kind of approach is no different from playing at the casino tables in Las Vegas.Tip#3. Start and stay close to home.When you are starting out as a beginner investor, it’s important to concentrate on an area close to home…one you can get to know very well. When I say close to home, it means you can drive, walk, or cycle around the area regularly. When you concentrate on an area close, you can observe if it’s declining or growing. You can observe the trend in sales and property rentals. Also, look for the top brokers who operate in your area, call them to find out more about the area. This is important because when a property comes on the market, you can know quickly if it is a good deal or not and you’ll be able to act fast. My first real estate deal was a disaster because I bought a property that was 3 hours drive from home. I failed because, I was not close enough to understand and observe the trends in the local real estate market.Tip#4. Expect to make mistakes.When you start investing in real estate or in any business, you are bound to make mistakes-everybody I know does. Remember your mistakes aren’t setbacks. They are steps in the learning process. What is important is to learn from your mistakes, correct and keep on taking action. The fact you can make mistakes is one reason to buy properties with positive cash flow, because it can help you buffer those mistakes. There is a theory for success called accelerated failure. The reasoning behind this theory is that you are most likely to fail at the initial stages of starting any business, however the faster you can fail forwards the faster you can begin to succeed. So don’t let the fear of failing stop you from starting investing in properties…it’s all part of the learning curve.Tip#5. Know what you can afford. This means finding out how much it will cost you for the cash flow you want. In other words, what will it cost you to get an ROI (return on investment) of 20%, 30%. Secondly, if your assumptions about the property deal are wrong, can you afford the losses from your mistakes. Before you start investing, ask yourself these questions; how long can I afford a vacant property if my tenant moves out? If there is a costly maintenance problem, can I afford it? Remember, the purpose of real estate investing is to solve your financial problems, not give you bigger ones to solve.Tip#6. Look for Ugly ducklings you can turn to swans.One of the best ways to make money in real estate investing, is to look for is a property that someone has walked away from because of a problem. Figure out how to fix the problem and you can instantly increase the value of the property. One example that comes to mind is a one bed flat I bought recently in an apartment building. The problem with the property was presence of mould and damp in one of the rooms. Because of this problem, I was able to buy the property and 25 percent below market value. I solved the problem with the help of a building specialist, and as a result, I was able to increase the value of the property and charge more for rents. The lesson here is focus on turning “ugly ducklings to beautiful swans” so you can create value for your portfolio and get rich in the process.Tip#7. Always remember to look at the numbers. One of my mentors, Robert Kiyosaki, bestselling author Rich Dad, Poor Dad often says, “Think with your calculator, not your heart”. This is important because once you understand the area you’ve chosen to invest in and know what property you are looking for, you need to follow through by looking closely at the numbers on your chosen property. The numbers are; the price you pay; the mortgage interest; rental income; maintenance cost; vacancy rate and every other factor you need to analyse the profitability of your investment. These numbers should all add up to…making you, money or else you wind up with financial problems.Warning, Cheap may mean expensiveOne of the commonest mistakes I see investors make is the assumption that because a property is cheap it’s going to be profitable. This is far from the truth because price is not the only factor for success when you are investing in real estate. You should never let your guard down or sacrifice your principles by what seems an attractively low price. The important point to bear in mind; Does the property meet your criteria? Does it have positive cash flow? Remember this… Because a property is cheap does not mean it’s a good deal. In fact, if you buy a cheap property that has no value, it could be the most expensive property you can buy.You can become wealthy investing in real estate. All you need is a goal to succeed, a determination to persist until you succeed. You can accelerate your path to wealth, when you follow my tips

Gold As an Investment

Why Gold is a Good Investment
The precious elemental metal gold is commonly used as an investment. Investors buy gold or invest in companies involved with the metal with the hope that the value of the commodity will rise. Although there are many properties that make gold as an ideal investment, it also possesses the potential to fluctuate in value.Gold has been used as store of value, investment and currency for many hundreds of years. Its rarity and the demand for its use in d├ęcor and jewelry give it its value. There was even a time when the US government had instituted what is known as the “gold standard” where the dollar was traded freely for gold, or vice versa, to stabilize the currency’s value.As an investment, gold has many potential benefits. First, commodities are goods that are fungible: one unit of a commodity is the same as a different unit, and units can be substituted with one another. This is what makes physical gold and other commodities like oil, platinum and silver easy to trade. Second, gold is not a currency that is produced by any country. That means that political troubles or economic policies are less able to have any effects its value. For example, when a country decides to increase the production of its currency, inflation may arise. Gold cannot be created and must be mined and the supply is finite. Most investors consider investing in the yellow metal as a hedge against any inflation. Gold also has some advantages over other precious metals. Investing in platinum can be very risky and it cannot easily convert it to cash.Investing in gold also has disadvantages. First, unlike stocks and bonds that can be filed neatly in a folder and stuffed in a drawer, investing in physical gold means storing the metal somewhere safe. Second, just like any other commodity, gold’s value can quickly change due to changing demand for it. Third, dealers and vendors of gold charge higher than its actual value to cover for minting costs.There are misconceptions associated with investing in gold. Most people believe that investing in gold means buying physical gold. However, one can invest in gold indirectly by investing in companies involved in the gold industry. An example would be investing in jewelry companies or mining companies that mine gold are great ways to benefit from rising gold prices buying actual gold bars or coins.There are investors who prefer to invest in gold when the price is high due to a belief that the price will keep on going higher and they can make better profits. There are others who choose to buy the yellow metal when the prices are low in order to make higher profits when prices rise.Because any investment possesses the potential to fluctuate in value, it becomes prudent not to commit too much of resources on any one investment. Any investment in gold should be coupled with other investments like bonds, mutual funds or other commodities. There is an old saying that says it is unwise to put all one’s eggs in one basket.More information on Gold as an Investment