You may not realize that you are richer than your think. If your nett after tax family income is $50,000 a year, you would have received $1.75 million over a 35 years period while working.
This is not a small sum of money. But, the question is, how do you manage the money you received, and how you use the money to build wealth for your family.
Building Wealth Through Real Estate
One of the best reasons to invest in real estate is leverage. With real estate, you can leverage to buy up to 4X or 5X the value of your investment. A 20% down payment for a $200,000 home requires you to put down $40,000. In 2 years with a 10% increase in value, your home is now worth $220,000. Your return on investment is $20,000, or 50% over a 2 years period.
Over the long term, real estate prices going up 5% a year is not unusual. In recent years, Greater Vancouver home prices had gone up double digit every year for the past 5 years.
Paying Off A 30-year Mortgage Sooner
You can pay of your 30 years mortgage in just over 11 years at the same monthly mortgage payment as your 30 years mortgage. A mortgage repayment accelerator program like Money Merge Account will optimize and accelerate paying off your mortgage.
Wealth building through the purchase of a second home can start as soon as you are comfortable with your finances, and the discipline involved in managing your mortgages. Finding the down payment for your second home can be worked out. There are many ways how this can be done. If you have built up enough equity, co-ownership with family members or your family income has increased substantially, you can plan on buying your second home.
You can view the latest Richmond and Greater Vancouver housing market information here.
If you like to find out how you too can benefit from real estate ownership, you can contact me at 604-721-4817 or email me.
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