340: Do Homeowners Really Build Wealth? - with Daniel Amerman
Get Rich Education
Keith Weinhold
4.3 • 602 Ratings
🗓️ 12 April 2021
⏱️ 42 minutes
🧾️ Download transcript
Summary
Your home is a liability, not an asset.
That’s according to Robert Kiyosaki. This is because your home takes money out of your pocket every month. An asset puts money into your pocket.
Today’s guest, author and economist Daniel Amerman, has a different perspective.
He states that forces like inflation and a mortgage (leverage) make your primary residence a strong investment vehicle.
Daniel’s research shows that historically, homeowners nearly double their equity in three years, triple it in seven years, and quadruple it in ten years (80% LTV loan).
We discuss whether home price increases are derived from appreciation or inflation.
First, I remind you why financially-free beats debt-free. Convert equity to cash flow. Extra mortgage principal paydown does the opposite - it converts cash flow to equity.
Classically, on a balance sheet, your home is an asset.
Remember that a homeowner’s return is not generated from equity. It is generated from the local housing market.
Hear my rant about how carpet beats hardwood floors.
Resources mentioned:
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Show Notes:
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Transcript
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| 0:00.0 | Welcome to GRE. I'm your host Keith Weinhold. Do homeowners build wealth because they own that home? |
| 0:06.5 | Or is it really for other reasons? Though homeowners can participate in leverage price appreciation, |
| 0:12.2 | they often have higher monthly carrying costs than a renter does. We're talking with the author of the Homeowner Wealth Formula today. |
| 0:18.5 | But not before my rant against hardwood flooring |
| 0:22.2 | today on Get Rich Education. |
| 0:26.9 | A lot of investors choose either cash flow or home price appreciation, but one real estate |
| 0:31.8 | market could provide both Jacksonville, Florida. |
| 0:35.2 | With 27% lower home prices than the national median and 1% higher rents, |
| 0:40.0 | their market has appreciated 34% more than other comparable cash flow markets over the last 30 years. |
| 0:46.4 | Get positive cash flow today and appreciation for tomorrow. |
| 0:50.1 | They often have available inventory in Jacksonville. |
| 0:54.1 | Start at cashflow and growth.com. |
| 0:58.5 | Hey, is your IRA in a real estate syndication? |
| 1:01.6 | Yikes, a 37% Ubit tax could hit you, but you still have a chance to set up your EQRP and avoid this. |
| 1:08.9 | Did you make too much money in 2020 and need more deductions? |
| 1:12.1 | Now federal law lets you set up an EQRP in 2021 and get deductions for last year. |
| 1:18.3 | Yeah, retroactively. |
| 1:19.7 | Even put old IRA and 401K money in Bitcoin, gold, or your own business. |
| 1:24.2 | Get control of all of your retirement money, tax and penalty-free, |
| 1:27.9 | text EQRP in all-capital letters to 72,000. |
| 1:34.0 | You're listening to the show that has created more financial freedom than nearly any show in the world. |
| 1:41.3 | This is Get rich education. |
... |
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