pyriel
11-07-2006, 01:22 AM
I've always been a fan of Robert Kiyosaki and now he has a new book that came out with Donald Trump as the co-author. The name of the book is "We want you to be rich." Both are into real estate but their book focus more into teaching others on their reasoning on why they want ordinary people like us to be rich. Both of them don’t believe in investing in mutual funds, 401K, and IRA. According to both of them, these retirement vehicles (to include TSP) are not the best way to get rich.
After being here for over a year and reading countless posts, I am beginning to see where they are coming from. It seems like our focus is to grow our retirement account in hope that we will have a better retirement future. And that is actually the bottom line here. It is totally different from their point of view. To them, we are average people who are average investors who chose to be average. This is funny because I see so many smart people here on this MB but yet, I do feel that they (just like me) are average investors.
My wife and I max our TSP and ROTH every year. That is about an average of 38k this year with the possibility of increasing it to 39k next year. Then on 2008, we have the opportunity to increase that to 41K when ROTH goes up to 5K per year. I also save at least 25K of my own money every year just in case there are real estate opportunities that might come by. Now, I’ve been thinking, where can I invest 66K per year that will beat out the rate of return from TSP and ROTH.
I can buy a pretty decent house for 150K with 45K downpayment (30%) and use the other 21K for closing and renovation, It is possible for me to have $500.00 a month passive income and after having it renovated, an increase of equity of 70K. If I do this for 9 years, I could have a possible passive income coming in to my pocket yearly of $4500.00 a month or $54,000.00 per year and a possible equity of $630,000.00 in equity. The caveat to this is that when I retire at the age of 48, I would have received $648,000.00 in passive income (before age 60) and a possible increase of equity of more than a million dollars. This projection does not include my current real estate holdings now nor does it count the 50% base pay that I will receive when I retire.
This sure looks good in paper. But why do I hesitate? I have this same knot in my stomach when I purchased my first property several years ago.
I wonder what others think about this scenario vs. growth in TSP and ROTH.
After being here for over a year and reading countless posts, I am beginning to see where they are coming from. It seems like our focus is to grow our retirement account in hope that we will have a better retirement future. And that is actually the bottom line here. It is totally different from their point of view. To them, we are average people who are average investors who chose to be average. This is funny because I see so many smart people here on this MB but yet, I do feel that they (just like me) are average investors.
My wife and I max our TSP and ROTH every year. That is about an average of 38k this year with the possibility of increasing it to 39k next year. Then on 2008, we have the opportunity to increase that to 41K when ROTH goes up to 5K per year. I also save at least 25K of my own money every year just in case there are real estate opportunities that might come by. Now, I’ve been thinking, where can I invest 66K per year that will beat out the rate of return from TSP and ROTH.
I can buy a pretty decent house for 150K with 45K downpayment (30%) and use the other 21K for closing and renovation, It is possible for me to have $500.00 a month passive income and after having it renovated, an increase of equity of 70K. If I do this for 9 years, I could have a possible passive income coming in to my pocket yearly of $4500.00 a month or $54,000.00 per year and a possible equity of $630,000.00 in equity. The caveat to this is that when I retire at the age of 48, I would have received $648,000.00 in passive income (before age 60) and a possible increase of equity of more than a million dollars. This projection does not include my current real estate holdings now nor does it count the 50% base pay that I will receive when I retire.
This sure looks good in paper. But why do I hesitate? I have this same knot in my stomach when I purchased my first property several years ago.
I wonder what others think about this scenario vs. growth in TSP and ROTH.