Is there a SHORTCUT TO WEALTH?
Shiloh LundahlPro Member
Rental Property Investor · Gilbert, AZ · Member since 2016 · 3k+ posts · 4k+ votesIs there a SHORTCUT TO WEALTH?
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Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
7yIn general shortcuts cost. Makes me think of the poor bas's buying seminar rah-rah programs for $30k, thinking that program is a shortcut. Most will be just $30k the wrong direction and can least afford the hit.
An old contributor had a signature in his posts. I woke after 40 years of working hard at REI and discovered I'd won the RE lottery. Overnight wealth. LOL
Truly short paths to wealth are achieved by the highly specialized inventors and business founders IMO. They are THE producers/suppliers/masters of their specific craft or product.
In terms of RE, the tortoise wins. Doesn't have to take forever, but shortcut is a dangerous word. IDEAL will prevail (Income, Debt pay-down & Depreciation, Equity , Appreciation, Leverage) but it takes time. A shortcut here is buying right something you know well.
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- Investor · San Diego, CA · Member since 2016 · 265 posts · 305 votes7yShiloh Lundahl Read “Millionaire Fastlane” by MJ DeMarco. To save you some time, here are a few concepts shared in the book: Wealth is a process, not an event. $5 million is the new $1 million Wealth is accelerated by exploding income and asset value via a business system that can be systemized and eventually sold in a liquidation event. Fast wealth is created exponentially, not linearly. Fastlane Wealth = net profit + asset value Liquidation events transform appreciated assets ("paper" net worth) into money ("real" net worth) that can be transformed into another passive income stream: a money system. To make millions, you must impact millions.
- Rental Property Investor · Sioux Falls, SD · Member since 2015 · 9k+ posts · 18k+ votes7y
Shortcut
1 : a route more direct than the one ordinarily taken
2 : a method or means of doing something more directly and quickly than and often not so thoroughly as by ordinary procedure, "a shortcut to success"
Yes there are shortcuts to wealth. Some people achieve it very fast and others take longer. If there were no shortcuts, everyone would achieve it at the same pace. There is evidence of this everywhere, so with countless examples, you could argue it is a fact that there are shortcuts to wealth.
Philosophical debate could be had as to what defines wealth or the morality of the methods to achieve wealth. We could also debate the fastest methods and best shortcuts.
- Developer · Cincinnati, OH · Member since 2018 · 1k+ posts · 3k+ votes7y
Originally posted by @Erik W.:
@Jay Hinrichs, that's a fair point. I turned 43 a few months ago, but I still recall feeling the "ouch" 3 years ago when I saw my 20-year term life insurance premium sky rocket once the end of the term went past age 60. I changed that to a policy that will expire when I turn 60 vs. keeps renewing annually past 60. So yes, your point about the increasing costs of health insurance as we age are well-taken and noted.
Regarding costs for health insurance: I don't know if you followed the link I provided, but the site says that if you earn between 100 and 400 percent of the Federal Poverty level, you can get most, if not ALL, of your ACA policy paid for via subsidies. Just a quick snippet to tease your information taste buds....
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*********************************************"Those subsidies can be used to offset the premiums for any metal-level plan in the exchange. Because the subsidies are so large, some enrollees can get free Bronze plans, or Gold plans that are less expensive than Silver plans. According to an analysis by the Kaiser Family Foundation, 4.2 million uninsured Americans would be eligible for free Bronze plans for 2019....For 2019 coverage, that upper income cap is $48,560 for a single person and $100,400 for a family of four.
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That's right: you can qualify for a subsidy making 6 figures... But you better not make $100,401!
Bottom line is if you strategically adjust your income you qualify for a ton of Govt-paid programs, one of which is healthcare insurance. It becomes very low cost and/or no cost to you, then all you have to worry about is meeting the deductible. And if all else fails...show up at the ER because by law they cannot refuse to serve you.
People like you and I probably won't every qualify for a dime because we'd have to reduce our income drastically, and we wouldn't to do that just to freeload off the tax base. But in the spirit of this post that asked how quick could you get to the point where you never have to work again... driving down income would be a major strategy.
The biggest three expenses: housing, healthcare, and taxes. Reduce/eliminate those costs, and $2,000 goes long way in South West Missouri!
Erik, you're a smart man and I like your answer.
Having said that, to answer the OP, YES - there are many shortcuts to wealth.
The long way is get a job and work there 40 years and retire. Now there's nothing wrong with that if you like your job and you don't mind someone else is in control of your financial destiny - that someone is your employer.
The short cut to wealth is real estate investing. You buy 100 apartment units over the next 10 years (I've acquired over 1,000 units) and the cashflow from those will more than pay your household expenses (provided you live modestly).
Shortcut - you retire in 10 years vs. 40 years. And, you're in control not someone else's. If you want to increase your income, you can acquire more units.
The shortcut is not easy and it takes a lot of hard work and hustle. Now, if by shortcut you mean easy...then, I agree with Jay Hinrichs that the easiest way is to inherit it.
- Los Angeles, CA · Member since 2018 · 326 posts · 279 votes7y
@Shiloh Lundahl yes as many have said there are shortcuts to wealth which typically are; inheritance and lottery but for most investors here it's a matter of identifying the opportunities that others aren't willing to take.
In my opinion becoming wealthy is ultimately gaining more time back in my life to do what I want to do. Those who have time are the wealthiest and we're all given the same 24 hours in a day.
As investors we can create more time for ourselves unfortunately for most of us it's a long game but that's why real estate is great as it can/is generational wealth if done correctly.
- Member since 2019 · 4 posts · 3 votes7y
@Dave Foster I would say that earned wealth creates passive wealth. I'd be consider it as wanting to be completely cash flow, for example starting as a real estate agent and working your butt off to have enough money to invest in property without needing external financing
- 7yDave FosterBusiness MemberQualified Intermediary for 1031 Exchanges · St. Petersburg, FL · Member since 2013 · 9k+ posts · 9k+ votes
I'm with you Lucas. There is a whole different dynamic to a persons character when they have "worked" to earn their wealth. They understand what it cost. They use it more wisely. And they protect it more strongly. Earned wealth in the hands of someone who worked hard to get it multiplies easily and it's only put into the hands of "active" partners after much due diligence.
Contrast that with the ultimate passive money - the lotto. the world is strewn with the carcasses of lotto winners who won enough for 100 peoples fortunes and yet 5 years later are broke and worse.
Slow and steady may not really win the race every time. Let's face it. But slow and steady always finishes the race. It just doesn't get the press clippings.
The 1031 Investor5137 Reviews - Contractor · Old Orchard Beach, ME · Member since 2019 · 11 posts · 3 votes7y
@Shiloh Lundahl
Multiple sources of income.
Passive sources.
Vending
Laundromat
Storage units
Just to name a couple check out T. Harv Eker he talks about.
- Specialist · Paradise Valley, AZ · Member since 2018 · 3k+ posts · 2k+ votes7y
One of my college friends was the daughter of one of the wealthiest families in the city. She taught me that "wealthy" means the family has had money for a long time, "rich" means money made in that generation. She said the difficulty is that people often want to be friends because of what she can do for them rather than just be a true friend. She pointed out the wealthy & rich have the same 24 hours everybody else has, they just use the time differently and think in bigger numbers.
Studies show that "most people" say they would be happy if they made $500 a month more than they are making now. Most also said that $75,000 a year would give them a "comfortable" lifestyle. To each his own.
People on Bigger Pockets are here because they want more. I use a term I learned from a financial advisor from years ago: "Reaching Critical Mass". That means having the cash flow to decide what you want to do with your day, every day.
If you take a conservative $500 a month positive cash flow per property (based on the way I buy properties - this does Not apply to fix & flip or buy & hold) the "average person" can reach "Critical Mass" in two years, and then continue doing the same technique for fun & profit or do whatever they want to do with their time.
So, I'd say two years to "critical mass", IF you put forth the effort in the right way in real estate.
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