Assets buy luxuries

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I printed out an online listing of an all white BMW 528.  It is a sexy car and in all honesty it is priced well.  The car is about $35,000 which would be a $700 car note.  I was giving it some thought.

I am in a situation where I can either buy another car or buy a property.  Last time I was in this position I bought the car.  Silly me.

You always buy the property first

The world is set up to reward investors and business owners.  When you finance a car you finance it for five years.  When you finance a property, you finance it for 30.  This means that the $700 payment on the car goes a lot further when applied to real estate.  That same $700 would actually allow you to buy about $100,000 in real estate.  Duplexes in Vegas are priced between  $80-120,000 right now.

After you buy the property and rent out the units you then can take the $400 that is being generated from the cash flow and fund your BMW.  This allows you to have your cake and eat it too.  It also allows you to benefit from the appreciation and the write offs.  This takes that $400 and likely doubles it.

Assets buy luxury

I said a while back that I will never buy another luxury off a paycheck and I meant it.  Assets buy luxuries. This is how the rich live.  This is how I live.  This is how I implore you to live.  The more liabilities and luxuries that you tie to that job, the longer you are tied to that job and the more likely you are to experience a financial nuclear bomb in the event that the job decides your intrinsic value is less than your market values (wages).

No one person should ever be able to determine your financial future.  People talk about risk, well that is risk.  If you are in a situation where your housing, food, transportation are tied to the emotions of ONE person, you are in trouble.

I have had multiple people walk away from my business over the last year because I stayed true to myself.  In doing so, I lost a few but I gained many more members.  Employees don’t have that luxury.  Employees must conform. Employees must stifle their creativity and originality to get the pass and maintain security.

What are assets

An asset is anything that adds value to you.  When I talk about assets, I don’t just mean real estate.  I mean anything that generates cash flow.  This could be your business, this could be stocks, bonds, notes, anything that adds value (hopefully cash flow) to you.

Those are the things you fund your luxuries out of.  If you want to get out of the rat race you have to flip from saving and spending to investing and acquiring.  Once you do that, then you live out of the perpetual cash flow.  Cash flow buys luxuries.

Be great,

Todd Millionaire

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