| Use Equity To Build Wealth |  |
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Buying a home is one of the most intelligent investments you'll make. The best part of it is that you will actually benefit from home ownership financially while you live in the home. Becoming a homeowner should be a priority for everyone. If you purchase a home you can create wealth with the equity that builds in your home. When investing equity there are three rules that must be followed  Liquidity Because extracting equity from your home requires a monthly payment and there are a many different life situations that come along having access to your money is paramount. Not only to protect from emergencies or accidents, but also because good investment opportunities come along at unpredictable times. Having all your money tied up when the deal of a lifetime comes along is not the best strategy when trying to build assets. Safety of principal When investing equity, losing principal is the worst possible scenario so finding investments that will help avoid this is very important. There may be investments that don't produce the way you would like, but keeping your principal secure is one of the rules that must be followed. High rates of return Arbitrage is one of the greatest but least known principles in the financial world. for example, when you put your money in a cd at a bank they offer you 3%. This 3% is what they are borrowing your money at. They in turn lend out your money for 6-8% and the difference is their profit. This is arbitrage. So when investing equity all you have to do is gain a higher rate of return than what you borrow your equity at. Arbitrage will help you obtain your financial goals much faster than any other principle of money. |
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