@Collin Vosburgh Who is Robert Kiyosaki? There is not one correct path. Just one correct path for you.
You have to look at your current finances, skill level, goals, current market condition, and age. Then you can decide what is the best for yourself. I think you need a combination of being conservative and aggressive. You just have to know when to be either one.
Example: If you are younger you can be more aggressive. After a Bear Market. Aggressive.
Thank you very much everyone for all this great info! I didn't know he got burned because he was in commercial real estate and they called in their loans. That's a relief to know. I will still continue with the plan I have. Finding another house to buy and move into (since we don't really like where we're at now) and renting out our current property until we get enough equity on it to sell and put towards a couple multi-units. We already have about 50k in equity on it so hopefully it won't take too long.
Originally posted by @Steve Vaughan :
Dave was burned when his commercial loans were called. That hot stove burned him, so he recommends nobody use a hot stove.
Fixed residential mortgages are not callable commercial loans. Use responsibly and build wealth with long-term, non-callable cheap money.
He wasn’t using conventional debt either. I heard him say on air that he used “90 day notes” to be exact. Dave was reckless.
It’s like he was literally playing with fire, burned down his house, and now tells everyone that fire is inherently evil and you must never use it or you’ll burn your house down too. I like Dave from a personal finance perspective. For real estate investing, not so much.
no don’t listen to that nonsense . I’d never invest at all if that were the case and most of the millionaires on here would still be working their w2 jobs trying to pay off their only house . Look Dave’s advice is solid meat and potatoes wisdom for the “ average “ slob that watches mindless trash every night sitting on the couch ,who can’t control himself or his finances . It is good practical advice for the uneducated masses with consumer debt so it’s not fair to call it bad advice it’s just not geared for folks like us. We understand how currency works and the proper use of good and bad debt .
My question whether you believe in Dave’s ideas is or not is, what’s wrong with having no mortgage debt or any other debt, and having nothing but income to invest and get very wealthy. It will work, so what’s the problem?.￼
@Collin Vosburgh . So you are young and eager to become wealthy in REI. Well young man tread down this road carefully. If you only buy with cash at a young age don't think you will acquire enough properties to reach your goal. However if you hold too many marginal cash flowing mortgages you have huge risk of losing money. I would suggest you save until you have @30% down payment find a deal that cash flows minimum 8% Don't forget after the first rental save enough to cover repairs and capital expense replacement make sure you have adequate umbrella insurance. The go for # 2. If you follow this formula and don't give up your W2 job then you RE holding will grow slowly at first but then accelerate. I think most wealth in RE comes from appreciation over time and banking your cash flow to reinvest. Owning property can make you wealth, owning mortgage property with little cash flow makes the bank wealthy and the contractors employed and as Dave Ramsey says " Murphy will come knocking on your door". Good luck young man, be a wise investor.
@Nick Rutkowski . I hope when you Just Do It you have a plan that goes along with it. Just Do It is a recipe for a disaster for someone with little experience, such as a young investor.
I didn't have any debt UNTIL I started investing in real estate. Years later, after we collected a LOT of real estate, it all became free & clear & we had no debt period. But invest carefully as REI can be an unforgiving mistress!!!
The average consumer has just under $10,000 in credit card debt. Dave Ramsey just like a lot of advice, you need to take it in context. Very few people would ever have started in RE if they had to be debt free. Be smart about investing, take it slow, and it's all about the numbers. One property a year and you will obtain wealth. Even in the Midwest say average ARV of $150K well that's 3 million at 20% down that's $600,000 in equity. Tenants are paying your mortgage, taxes, ins, etc. Don't forget the tax advantages of mortgage pay down, depreciation, appreciation and cash flow. A steady and smart pace of investing can bring you many benefits if your willing to work at it.