I love great quotes, don’t you? What do you think of this quote from Albert Einstein? Seriously I would love to hear your thoughts, so leave me a comment please!
“The most powerful force in the universe is compound interest”
In my latest book, “Cash Flow Now” I have an entire chapter on this quote because it is SO IMPORTANT to your real estate investing strategy and your ability to ELIMINATE banks from your investing equations. Email me, Jim@investingnownetwork.com to request my free special report on buying houses without banks.
In case you forgot what compound interest is: “Compound interest arises when the interest gets added to the principal, so that the interest that has been added also itself earns interest. This addition of interest to the principal is called compounding interest. A retirement account, for example, may have its interest compounded every year: in this case, an account with $100,000 initial principal and 20% interest per year would have a balance of $120,000 at the end of the first year, $144,000 at the end of the second year, and so on. Millions of people are earning 2% or less in money-market accounts and CD’s so it is important to know what they are earning.
Using the same $100,000 in the previous example and a 2% return, the retirement account owner will have $110,408 in 5 years and $121,899 in 10 years. IF the retirement account owner could find a way to earn 10% interest, he would have $161,051 in 5 years (more than $50k gain over the 2% return) and $259,374 in 10 years (more than $130k over the 2% return mark).
I wrote a blog earlier this year (check it out on our site at www.investingnownetwork.com) about everyone having a money problem where I suggested that some people do not have enough money and some people have so much money but don’t know how to earn a great return or fear the possibility of losing it quickly in bad investments like the stock market. If you know how make money in real estate by collecting income producing properties or can flip houses for capital gains, then you can help solve the problems that millions of people who are afraid of losing their money right now and are sick and tired of earning that 2% in a CD or money market account.
As a successful real estate investor you should have no problem finding a half-price house right now, fixing it up and renting it or flipping it. You can find ways to provide a fantastic, safe return and solve a problem for someone with money sitting on the sidelines right now. The private lenders working with me are earning a lot more than a 10% return and are making a killing in this market. They have a nice, safe and passive investment and I do all the work. It is a nice win-win scenario where we help each other and both mutually benefit.
Take a moment, leave me a comment, ask a follow up question OR help me a lot by sharing this blog post to facebook, Twitter, Linked In, etc.
Happy House Hunting!