My grandma always says "make your money work for you". Smart people save a portion of their income to invest so they don't have to work anymore. The sooner people realize that materialistic possessions will not pay you dividends, the sooner they will be smiling while watching people rush to work from a Starbucks on a Monday morning.
There are many ways to invest your money, but most offer very little in terms of control like real estate. When you buy an investment property, you have some choices on how to make money from it. The first choice you make is whether to live there or not. If you buy a multi unit building, you can live in one unit and then rent the others. If you choose not to live there, you can rent it out and have the tenants pay your mortgage for you. You can choose who you want to rent to, and you can choose how you want to manage your property. You can maintain it yourself, or hire someone to do it for you. You can buy an old distressed property, improve its value by fixing and updating it and then sell it for a profit. There are so many options to choose from and all can work depending on the situation.
When you buy a stock, you have very little control over how that company or group of companies operate. Take an extreme case like Enron. Investors had no idea that the management team was cooking their books to raise stock prices. Their investments were poorly managed and they had very little they could do about it and not much time to act when things went south. In real estate, even when home values fall, you can still earn money on the monthly cash flow from rents. When all is said and done, shelter is an essential need and property has real tangible value no matter how bad an economy or market gets. When your stock company goes bankrupt, you have nothing tangible to show for it.
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I practice what I preach, and believe just as my Grandma does that real estate is the best way to make your money work for you. If you are a believer in personal freedoms and want to be the creator of your own destiny, then real estate investment will suit you very well. Right now, FHA lending programs allow buyers to put as little as 3.5% down if you're a first time home buyer. In Chicago, there are some stable areas where you can buy a two-unit building for under $200,000. That means for under $10,000, you can own and live in a 2 flat, rent one of the units out and potentially be living there for free or close to it. That's what I did to get my start in real estate and plan to keep building on that foundation. I love to talk to people about what I did, because it's a lot easier to start than you would think and the long term benefits are so rewarding. I want to help great people realize this same potential. If this method of investing is appealing to you, then I would love to hear your thoughts. Maybe someday you can be the one who can say "nothing" when someone asks you what you do for work.
