Dumb economics

People usually buy things at the wrong time. They now buy stocks that have gone up significantly already. They bought real estate above where the market is today, since it was headed up. As Mr. Rothchilds was quoted he " bought when there was blood in the streets and sold when there was joy in the streets". A large portion of people buy after most of the uptick in the value of something has already happened. Real estate and certain stocks are going to make some money in the next couple of years. Most will be on the sidelines while the best deals will be taken. There will still be some deals, but not the real money making ones.

Along with this advice - get out of debt! If you have a $1300 a month mortgage, you are probably paying about $250 in taxes and insurance per month and maybe $50 to $100 if you have a 30 year mortgage and have had it less than 5 years. So let's say that you are paying $1000 in interest. Nice write off, right? Yes, but you are losing all the rest of the money. What if you were saving that $1000 or better investing it? You start building wealth and fast.

Another thing, why do some people make such good money on real estate investments comparatively? Because, when a property appreciates you often haven't put in near as much and the value but you get the percentage return on the whole of the property.

You have no idea what I'm talking about. Let me tell you one investment I made. I bought a $106K lot in 2005. I put down money that I took out of a home equity loan. I paid payments for 9 months on an interest only loan. I sold it after 9 months for 205K, a $99,000.oo increase, in only 9 months! My investment was just the payments and two sets of closing costs, since I used home equity. I probably made about $90K when it was all said and done (paid uncle sam handsomely, though, 15% or so). OK so I walked with $77K more or less. Total out of pocket? About 22K. Be very careful when trying something like this. You can get burned and many are getting now who bought at the height of the market. Rarely can real estate outrun salaries for very long.