My Dime, Quarter, Dollar Principle
Lately, I have been wanting to learn more about how certain investors have built up massive wealth and survived one or two real estate crashes. I don't believe zero down investing is the only way and certainly not paying cash for everything. What I have been looking for is the middle ground for utilizing the ability to leverage real estate and build wealth as well as having Financial Security that comes through having no debt.
What I've come up with in my head is the dime, quarter, dollar ratio. I feel like it is pretty good for a stable market like the one on investing in.
For every dollar of debt, I will have a dime of cash.
For every dollar of debt, I will have a quarter of equity.
These are the minimum standards that I think I should uphold in order to be secure during bad times, but also be able to grow wealth quickly. I'm interested to see what others are using or what you guys think about these ratios.