Investing is the Pathway to Creating Wealth & Financial Freedom
Real Estate as an asset is the focus of this installment of our Investing Series. Investing the pathway to creating wealth and freedom. Remember, these are assets categories for generating the wealth you need to fund your “Freedom Lifestyle.”
Stocks
Bonds
Real Estate
Energy
Commodities
Precious Metals
Precious Gems
Crypto Assets
Don’t miss our July 2024 post, “Would You Like to Pay Less in Taxes?” which celebrated Independence Day and is dedicated to an in-depth examination of taxes. How an investor handles taxes is more important than you may ever imagine!
Real Estate: A Great Investment
Real Estate is in the asset category of wealth. Real Estate is wealth, just as gold is wealth and silver is wealth. Real estate always has been, and always will be, enduring wealth.
Real estate is an excellent asset of wealth to use for creating on-going, long-term income streams.
Read “Early Influencers: William Caruth Was Dallas’ Original Real Estate King,” a remarkable story of a family in Dallas who used raw land to create income and future wealth for investment and income. Keep in mind, the initial investment of $1000.00 in the 1840’s, for the purchase of raw land is approximately $40,000 today.
2 Basic Types of Real Estate Investment
The 2 basic investments in real estate are:
Unimproved land, which I like to call “raw land”
Land with improvements
Unimproved land does not necessarily generate income, but the land itself is wealth. Improvements on land via structures are opportunities to generate income flows. Typical real estate improvements include farms, residences, and businesses.
The land is a constant. It is the improvements that drive additional wealth value and income. Life requires the “use” of real estate to produce and provide what we need to live, eat, work, and play.
Real estate opportunities are numerous.
Think of it in these terms: When you drive the Dallas North Tollway, Plano through Frisco, think of the immense amount of wealth created in that real estate corridor through the land, business, and residence improvements largely over the last 30 years!
Real Estate: Live, Eat, Work, & Play
Live: People need a place to live. We have a shortage of housing and there is always a renewal of older neighborhoods. There is a variety of housing types, and people always need a place to live. Leasing real estate is a great opportunity to own the real estate asset and generate income from that real estate asset.
Real estate professionals always talk about purchasing 1 property for lease every year, and creating a portfolio of real estate assets that generate an income stream. These real estate assets can also be sold for value, ideally an appreciated value.
Eat: Farms provide our food supply. There is a growing demand for local high quality produce, meat, and food products.
Work/Business: strip malls, small commercial properties, and large commercial properties.
Play: fits into many commercial and residential categories.
Real Estate Cycles
Real estate has its cycles of value creation and endurance. For example, a major cycle change occurring is the downturn in the commercial real estate cycle of centralizing workers in large office buildings in central districts-urban and suburban. Technology and the economy shutdowns from the COVID-19 era have had an impact on this category of real estate. It will be interesting to ascertain the future of this real estate category. You see amazing buildings sell for a “dime” and be re-purposed to another use of real estate for the “live, eat, work, play” uses of real estate.
Patience & consistency are 2 hallmarks of successful investing in any asset class.
In the interesting article above, you read through the impact of cycle changes over the long term. The article concludes with a 1975 quote from William Caruth Jr: “Grandfather acquired the land, father held it and I harvested. It’s as simple as that. It was always a question of liquidating the property for the best recoverable dollar, developing it for the best possible purpose, all to the best possible benefit of the estate and its heirs. It didn’t take any genius on my part or anything. Just patience and consistency.”
Carve Out Your Own Real Estate Niche Now
Real estate requires knowledge and expertise in the many professional areas involved with real estate assets.
There are many professionals involved in the acquisition and management of real estate. The Talent Bank needed to be successful in real estate includes real estate professionals, various attorneys, bankers/capital partners, developers, builders, city zoning, maintenance, insurance and taxes, etc.
You can carve out your own niche of interest for wealth and income through the use of these various professionals.
As a financial planning professional, as an investment advisor, and as an insurances advisor, I definitely work with clients planning for the inclusion of real estate assets in a client’s investment portfolio: as personal assets and as business assets. And, as a financial professional, I can assist with providing referrals to the right professionals needed to be a successful real estate investor.
Keep your eyes open for your real estate interests to include real estate assets into your portfolio for the purpose of creating additional wealth and streams of income!
Your thoughts and questions are always welcome!
MSM Advisory, LLC. is a professional practice designed to offer you the customized financial planning advice, strategies and implementation to make your dreams come true. Money matters and this is what the money is for… your vision for your life coming to life… for you.
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