Making of a Millionaire Ben Le Fort

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Summary of today’s episode
While investing in physical real estate requires a lot of money, investing in REITs allows someone with less than $100 to begin investing in real estate.

REITs are companies that buy real estate and payout 90% of their taxable income to their shareholders. You can easily buy REITs in the same way you would buy stocks. Additionally, you can increase your diversification by buying REIT index funds in the same way you would buy an S&P 500 index fund.

REITs have historically provided a strong return while maintaining a low correlation to stocks. However, investing in REITs is investing in one specific sector of the economy (real estate), which exposes investors to idiosyncratic risk.

REITs solve the three biggest problems of investing in physical real estate.


Diversification
Liquidity
Management time and effort

REIT investors need to know that the dividends from REITs are less tax-efficient than dividends from other publicly traded companies. This means the most efficient way to invest in REITs is through retirement and other tax-sheltered accounts.



Spread The Wealth
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The term first-generation wealth builder refers to someone who does not have any financial inheritance and builds wealth, starting from $0, or even less in some cases.

For this podcast, I will add to the definition of a first-generation wealth builder to include someone who is building wealth to support themselves, their family, and future generations of their family.

In 2013, I finished graduate school with $50,000 in debt, $600 in the bank, and a mission to begin my journey as a first-generation wealth builder.

Every major financial decision I’ve made since that point has had the express purpose of accomplishing two goals:


Improve my personal financial situation.
Improve my family’s financial situation. That goes for my current family members and future generations of my family.

With that in mind, in this episode, I discuss how  I manage money as a first-generation wealth builder.



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This podcast is for entertainment purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.





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In today’s episode, I am discussing why our ability to earn an income, what economists would call our “Human Capital” is our greatest asset. That means, losing that asset is our greatest financial risk. Luckily there is a simple and cheap way to manage that risk which we discuss in today’s episode.

For more discussions on the Present Value of our human capital check out this article on Making of a Millionaire: https://themakingofamillionaire.com/3-reasons-it-makes-sense-for-me-to-be-invested-100-in-stocks-4a5d4c3681c2

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In this episode, I discuss why bumper sticker advice like “debt is evil and should be avoided at all costs” is short-sited.

I do this by reviewing all the ways debt has helped me build a life that I love with financial security.

I also provide a framework of questions to ask yourself if you ever consider taking on debt:

1. What phase of your financial life are you in?

2. What are your financial goals?

3. Is the use of debt likely to move you towards those goals?

4. What are the risks of taking on debt, and have you prepared for them?

Here is the link to the article on the pros and cons of owning a home: https://themakingofamillionaire.com/the-financial-paradox-of-owning-a-home-2dc36bfca080?sk=a92bb6d33d2688c7e658d602b5e046df 

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In this episode, we discuss why managing money is less of a science than it is an elegant dance. There will be times for frugality and times for abundance; knowing what to do during these times is what will determine your financial future.

Most of us have three phases of our financial life

Forced frugality
Optional frugality
Thoughtful abundance

If you’re lucky, you move in a straight line from forced frugality and eventually hit thoughtful abundance and never look back.

Let’s discuss what each of these phases looks like and the top priorities for your money.



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Three factors that explain why I should be invested 100% in stocks

1. My wife and I each have high job security and extremely predictable income.

2. We are lucky enough to each have Defined Benefit (DB) pensions through work, which means our retirement income will be very secure and extremely predictable.

3. I am relatively young at 32 years old, which means I have a lot more income I will earn in my life through my human capital.



That does NOT mean it makes sense for you. In this episode, we discuss some of the important factors we all need to consider when making asset allocation decisions. 



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Check out all the other investing articles on Making of a Millionaire: https://themakingofamillionaire.com/investing/home


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