The Three Pillars of Wealth are Business Ownership, Real Estate, and Stock Market Investing. Those people that own businesses receive various tax benefits as well as other incentives just for employing people. The same is true for real estate investors. Real Estate investors in most cases rent their properties to others but the investors get the benefit of owning the property while others pay for the property. With stock investing you earn interest over time for the monies that you put into the market as well as some tax relief.
Below I’m going to explain in detail what the three pillars mean and give examples on each.
Renting vs. Ownership
There certainly is an advantage in homeownership vs. renting so let’s take a look at some facts.
Today’s average rent for a one-bedroom apartment is $1400.00. That’s $16,800.00 a year and $4,032,000 for twenty years. The reality is that the landlord has the advantage because he or she (Landlord) gets all of the benefits such as tax deductions.
I use my current home mortgage payment in this analysis to show the contrast in payment. Monthly payment $1,116.00 per month, $13,392.00 a year and $3,214,080 for 20 years. The advantage for homeownership is that should the homeowner need resources their home can be used as collateral but renters don’t have this advantage.
Saving & Investing
Saving and investing should start early since wealth is created over time” one of the ways I recommend starting saving is to make a habit of collecting change. I started saving change years ago and it’s a habit. I never go home without change. My wife and I have vacation and our vacation was paid for with change. Consistency is the key to wealth building. Saving $5 per day equals $1825.00 per year but over twenty years you’ll have $36,500.00. (being consistent).
Stock Market
Most people are afraid of the stock market but I understand because I was one of those people. The people that are doing well financially invest in the stock market as well as other investment platforms such as real estate and businesses. I want to make it very clear that I’m no expert in finance but instead, these are things that I’ve observed and read about that successful people do. Let’s explore the $5 per day saving, the stock pays on average between 5% to 8% so let’s take the 5% percent average on the $5 per day-saving. Over twenty years saving $5 per equals $36,500.00 and at 5% that equals $182,500.00 (not bad for $5 investment). Most of us misuse $5 a day on things that don’t matter.
Growing up as a child no one ever taught me the importance of these three pillars in the wealth build process so it’s imperative that we began teaching our kids at a very early age about the three pillars in the wealth-building process. No matter a person’s age just develop the mindset of wealth building because working alone will not provide you with the cushion you’ll need in your retirement years.
Marvin Dixon
VMG Review.COM
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