Sunday, 21 May 2017
Fact or Fiction : The key is to make your money on the buy, not the sell
Read? Renting a home can be a savvy decision
Quote : "I looked to investment guru Robert Kiyosaki's Rich Dad Poor Dad blog, in which he wrote: "Repeat after me, your house is not an asset."
His line of thinking is that it matters little how much a property appreciates in price. What matters more is "whether it provides cash flow every month".
"The key is to make your money on the buy, not the sell," he said, so that one does not have to worry about whether the asset value goes up. Cash flow from a house would therefore come from the rent. So if you live in your own house, it cannot be considered an asset."
CW8888: How about holding a few stocks on good buy for cash flow and does not have to worry about the asset value up or down?
Fact or Fiction : The key is to make your money on the buy, not the sell
If you haven't personally experience it through your own investing journey; it is very hard to understand fact or fiction.
After more than one decade of receiving cash flow from these free hold stocks and Mathematically Infinity gains; what else could he probably complain or unhappy about?
One time investing effort; not good as passive income for more years to come?
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FH is likely to be unaffordable investment class by average retail investors
ReplyDeleteFH govt also can take back by Land Acquisition Act if they think need to build MRT or highway or airport thru your FH property. Govt will compensate by market value, so if they take during recession or property downturn, then suay!! Many cases is road-widening, so govt will take away 30% or 50% of the garden. This type of case very suay coz govt valuer can give very low "market" valuation to small pieces of land. I think Ministry of Law and SLA changed their processes after some very unhappy cases a few years ago.
ReplyDeleteAnyway good properties in SG and other major cities is a rich peoples game. Normal people don't have enough $$$$$$ to diversify properly with physical properties. Better to use REITs or property ETFs.
And when the total asset value of stocks/REITs/ETFs have doubled by capital appreciation or dividend re-investment, then we can follow Uncle's example to take out 100% initial cost of investment, and create INFINITY yield. :) :) You can't do that easily with physical properties.
"The key is to make your money on the buy, not the sell,"
ReplyDeleteI would said, the key is not losing money when you buy. By not losing money, downside is protected and enjoy the upside.
True!
ReplyDelete