Keith discusses the inefficiency of compound interest in wealth building, advocating for compound leverage through real estate investments. He illustrates how a $100,000 investment in a $500,000 property at a 6% annual return can yield much higher returns due to leverage (see the math below).
He also explains how mortgage rates are influenced by long-term bond yields and discusses the benefits of real estate over stocks.
A coaching call with GRE Investment Coach Naresh highlights the process of investing in real estate, including financing considerations and the role of a coach in guiding investors.
Here’s the math on a 5:1 leveraged RE return at a 6% appreciation rate:
Year One: $500,000 x 1.06 = $530,000. Subtract $400K debt = $130,000 equity
Year Two: $530,000 x 1.06 = $561,800. Subtract $400K debt = $161,800 equity
Year Three: $561,800 x 1.06 = $595,508. Subtract $400K debt = $195,508 equity.
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Complete episode transcript:
Automatically Transcribed With Otter.ai
Keith Weinhold 0:00
Keith, welcome to GRE I'm your host. Keith Weinhold, make America rich again in play numbers. You'll get a fresh take today on how compound interest does not build wealth and compound leverage does. Then you'll learn about how bond market moves affect mortgage rates. Finally, you get to listening to a call between one of our investment coaches and a GRE follower today on Get Rich Education.
Speaker 1 0:33
Since 2014 the powerful get rich education podcast has created more passive income for people than nearly any other show in the world. This show teaches you how to earn strong returns from passive real estate investing in the best markets without losing your time being a flipper or landlord. Show Host Keith Weinhold writes for both Forbes and Rich Dad advisors, and delivers a new show every week since 2014 there's been millions of listener downloads of 188 world nations. He has a list show guests and key top selling personal finance author Robert Kiyosaki, get rich education can be heard on every podcast platform, plus it has its own dedicated Apple and Android listener phone apps build wealth on the go with the get rich education podcast. Sign up now for the get rich education podcast or visit get rich education.com
Corey Coates 1:19
You're listening to the show that has created more financial freedom than nearly any show in the world. This is get rich education.
Keith Weinhold 1:35
Welcome to GRE from Altoona, Pennsylvania to Saskatoon, Sa
Hosts & Guests
Information
- Show
- FrequencyUpdated weekly
- Published4 November 2024 at 08:00 UTC
- Length57 min
- Season1
- Episode526
- RatingClean