I pulled these thoughts form a newsletter by Chris McLaughlin. What Difference Does a Few Years Make?For those that are young enough not to clearly remember the early 70's a quick trip down memory lane can serve an important purpose...it demonstrates what a difference a few years can make and why it is important to find passive sources of income early in life.

 Bill Downey, an expert in commodities, recently published a quick spotlight that focused on prices as of August 15, 1971...just a few days short of 29 years from today.

 Average cost of a new house was $25,250 versus $190,000 today (from a high of over $260,000 just two years ago). If you had purchased ten average priced BRAND NEW homes (with a mortgage payment of less than $275 each!), rented them out and allowed the mortgage to cover the expenses, today you would hold nearly $2 million dollars of real estate free and clear...and still be able to collect rents for as long as desired! Average annual income was $10,600 versus $38,000 today. Notice, earning power has not kept pace with inflation. In fact, experts agree the average worker has lost purchasing power each and every year for nearly 30 years. Average monthly rent $150 versus $820 today. Of course, rents for brand new homes would have been higher but imagine, even with a "high" mortgage of $275 for each house, you would still generate more monthly income from ten houses than the average employee working full-time...before paying off the mortgages!

Those of us who are older, take just a few minutes to imagine how different our life would be today if you had purchased a few average little homes 29 years ago. If you don't have at least 2 million dollars sitting safely in a retirement account while continuing to generate a monthly income, ask yourself why? On the other hand, those of you who are young should consider this...the United States entered a period of high inflation and rapidly escalating prices in the late 70's and early 80's yet it dwarfs the amount of spending taking place in the past six months of the current economic decline. Money creation expands the supply of money and eventually leads to inflationary pressures - to date, that has been adjusted and dealt with but experts agree, the amount of new money creation currently in existence is unlike any in the history of the United States. If you make one investment in life then simply allow it to pay for itself, it could easily create a retirement income or source of revenue for you and your children well into the future....even as unemployment and actual wages shrink.

 Anyone that had the foresight to invest in real estate during the early 70's would enjoy an additional $5,000 to $6,000 per month while having access to nearly $2 million dollars in their real estate portfolio.  Instead, most Americans trusted their hard earned dollars to 401k accounts, savings bonds and other "trusted" sources that have left them high and dry when they needed it most. Here is a simple recipe for success...buy now, allow it to pay for itself and forget you even own it then reap the rewards in your old age. It's a time tested method that has led millions of average Americans just like you down the road to wealth. Consider this...the federal deficit is an estimated 2 Trillion for this year alone...with trillion dollar deficits projected for the next decade!

Thanks Chris for these timely thoughts and insights.  I now have something to think about(regret) when I review my 401 accounts. Meanwhile on to work to sell and market homes in the Gainesville Florida real estate market.  Visit my Gainesville Florida real estate site for great buys on foreclosures that you might be able to turn into a rental.  Good investing.......

Jack.

 

 

 

 

You are going to love this video. We cannot keep doing the same things we used to do and hope for different results. We must think outside the box and bring radical new ideas to play in our business. And don't be fooled by the recent positive news on the housing market. It's going to take a few more years before things get back to normal. Take a look. Let me know what you think......

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Think about it....is it over.....

If they are doing this for a simple $4,500. Cash for Clunkers program, it will interesting to see what will happen when it comes to a future mortgage to buy a home. Tough times are ahead.

 

One of the most unusual -- and generous -- programs ever rolled out by the Federal Government is the recent $8000 tax credit for home buyers.

Whether you’re a first-time home buyer, or you’ve bought and sold dozens of homes, it’s an amazing time to buy in the Gainesville Fl area.!  And if you have questions about the market, neighborhoods, or how to take advantage of all the buyer benefits out there…just email or call me today.

Here's what you need to know...

Who is eligible?

• first-time homebuyers
• anyone who has not owned a principal residence in the last three years

What is it?

It’s an $8000 gift from the federal government. If you qualify, and you buy a home while the program is available, you’ll get $8000 back with your tax refund.

There are two factors to consider:

First, if your adjusted gross income is more than $75,000 or $150,000 filing jointly, then your credit will begin to shrink, depending on how much more than that you make. And second, the tax credit is for $8000 -- or -- 10% of the sales price. So, if you buy a house worth less than $80,000, you’ll get 10% of the price.

When?

This is an 11 month program: January 1st, 2009 to November 30th, 2009. You have to close on your house within those dates.

And... when do you get your money? You will receive your tax credit after you buy your home. You can’t use it for your down payment, or your other closing costs. But, for example, if you close on a house next month, you can file an amended tax return -- and get the eight grand -- right away. You do not have to wait until next year.

Where is it available?

You are eligible for this tax credit for principal home purchases anywhere in the US, including the US Territories! But, don’t forget…The qualifying purchase only includes your primary residence, not a vacation property.

Why?

The Administration and Congress did this to get the nation’s economy rolling again. And if you look back through history, programs like this help make that happen. Approximately 30 years ago, during another economic downturn, the government offered $2000 tax credits. And, it worked -- The increased real estate sales helped get the economy back on track.

In this economy, an extra eight thousand dollars can really mean a lot, to people all across the country.

And remember! The Clock is Ticking...... After that? The $8000 gift is gone.

(Don't forget -- allow 30 to 60 days to finalize your home purchase before the November 30th deadline!)