| Geometrical Real Estate vs Linear Stock |
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| Written by Cody Scholberg |
| Sunday, 09 August 2009 18:06 |
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If you invest in stock, your money will grow. Your money grows like a line, linearly. However, is will never grow geometrically. Geometric growth is much faster than linear growth. Anybody who takes advantage of geometric growth will be rich. Geometric growth separates the rich and the poor; it is the secret force of capitalism. In fact, there is no other way to become rich. If taken advantage of, it will make anyone rich.
If you invest in stock, your money will grow. Your money grows like a line, linearly. However, is will never grow geometrically. Geometric growth is much faster than linear growth. Anybody who takes advantage of geometric growth will be rich. Geometric growth separates the rich and the poor; it is the secret force of capitalism. In fact, there is no other way to become rich. If taken advantage of, it will make anyone rich. This hidden power is the power of borrowed money; this is the surest way to get rich. The middle class and poor struggle so much because they spend their lives trying to get out of debt, rather than trying to get as deep as they can into it. If they tried to get deeper into it, they would be rich. The difference is, the rich get into good debt, which is something that the poor and middle class do not know much about. The richest people in the history of the world built their fortunes with often times one-hundred-percent borrowed money. If you would like to take advantage of this power, you can simply jump head first into the world of real estate: the best place in the world for borrowed money. If you are wondering how you, too, can tap into this secret power, you need look no further. Your answer lies in real estate. Real estate is the motherland of borrowed money. In the world of real estate, all you need is 20% of what you want to buy. Sometimes, you need as little as zero; banks are more than eager to give you the rest. When compared with stock investment, the advantages become quite clear. Twenty-thousand put into stock versus a twenty-thousand down payment on a one-hundred-thousand dollar piece of property is a fine comparison. For simplicity sake, the bank is charging five percent on the loan. When compared to other forms of investment, such as stock, the advantage becomes quite clear. Twenty-thousand dollars put into stock will perform worse than twenty-thousand used as a down payment on a one-hundred thousand dollar rental property. Stock only earned sixty-percent of what the real estate did. In other words, the stock made you six percent on your money, but the real estate made you ten. It is obvious which one is better. This is just a taste of the real fun of real estate. If the investments made eight percent, then real estate would have earned us four-thousand while stock would have made us one-thousand, six-hundred. This time, stock only earned forty-percent of what the real estate did. Real estate really does earn exponential growth. This is just a start. If our investments made eight percent, the real estate would have won by an even bigger gap; the stock would have earned only forty percent of what the real estate had. On a second investment that earns eight-percent also, we will end up with much more from real estate yet again. On a third investment with again eight-percent interest, the stock will have earned us only thirty-five-percent of what the real estate did. Stock grows linearly, but real estate grows geometrically. To truly take advantage of other people's money, one must use real estate, the essence of capitalism. DISCLAIMER: This article is provided as information only and is not to be taken as financial advice. Cody Scholberg, a recognized expert on real estate, is an author for the Investment Properties Guide, a place to learn about investing and choosing your first rental property. |
| Last Updated on Saturday, 26 September 2009 15:14 |