Contrary to popular belief, it does not take a lot of money to make the first step in the world of real estate investing and start producing wealth. It merely takes a little money – and a lot of time.”Give me a million dollars, and I will turn it into two millions”. Forgive me, but if anything were to qualify as a silly statement, this would be it. Not because this statement is untrue, but because it is inherently obvious. Anybody can turn a million dollars into two millions. The trick, of course, is to get the first million.Or how about this one: ” The rich get richer, the poor get poorer”. Politicians as well as ordinary people use this statement as a political weapon to endorse the idea of taxing the rich, so as to redistribute their wealth to the poor. But even at the risk of being too blunt, the reality of it all is that giving money to the poor does not make them rich. If it did, all those welfare recipients out there would be millionaires.”The rich get richer, the poor get poorer” is true, but within an entirely different context. It does encapsulate, in fact, the secret to accumulate wealth. The reason as to why rich people get richer and poor people get poorer is that rich people continue to do all the right things that got them rich in the first place, whereas poor people continue to do all the wrong things that got them poor. Naturally, then, it is of extreme importance to find out how rich people got that way.
Statistics show that if one goes back far enough in the family history of wealthy people, it comes to a point where none of them started rich. There was a time when the rich were poor – as poor as today’s poor. In fact, to be more precise, there was a time when the rich were ‘broke’. To be poor is a state of mind, to be broke is a state of … money, and lack thereof. With the difference consisting in the fact that one can always fix being broke, whereas it is not so easy to fix being poor.So, how does anyone fix being broke? There is no magic: work hard, get a little money,save some of it and then invest it. Eventually, with time, one will not be broke anymore. That is according to study after study conducted by financial researchers everywhere. This is why, as I have stated above in my opening line, to make the first step in the world of real estate investing it takes a little money and a lot of time. Saving is what will get anyone to the first million dollars.Wealth accumulation in grand style, especially as it relates to Real Estate, has nothing at all to do with large inheritances, sizable insurance payouts, business fortunes or even lottery winnings – much less lottery winnings, in fact. More than 95 percent of the wealthiest people in North American have made their money and got where they are today solely through their own efforts. They worked hard, got an education and a good job, saved whatever money they could here and there and took the plunge into Real Estate. They did not begin with $300,000, or $200,000 or even $50,000 to invest. In fact, a recent survey of successful American real estate investors conducted by The Spectrem Group (www.spectrem.com), a financial analyst firm, reveals the following common trait characteristics:[ ] They began investing in Real Estate when they were young. The average age when they made their first investment was 24, and 10 percent of them began investing before they were 20 years old.[ ] They invested as often as they possibly could. A whopping 92 percent saved regularly, adding to their savings after the initial real estate investment.
[ ] They invested intelligently, carefully picking the properties they bought, especially at the beginning. The rule of thumb was invariably to maximize return over investment (yield).[ ] They let nothing to stop them from setting aside money derived out of their prior investments. Although the majority of them (69 percent) suffered some circumstance that caused them to temporarily stop saving, only 4 percent actually let go of the saving habit.[ ] They never sold at a loss. Whenever their local markets turned sour, they held on to their investments until better times came around. And better times always came around.And the most remarkable statistic of them all is that, despite all the things that happen to all of us in life, an incredible 31 percent (almost one out of three) said that nothing ever interrupted their savings efforts.The single biggest recognized untold secret of successful people for accumulating wealth in Real Estate is to save and reinvest the savings, with perseverance, throughout the years.