I have become quite intrigued with wealth and how to build wealth. I think it is incredibly fascinating, especially in this current landscape – creative and unique ideas are making many people self-made millionaires (or billionaires). One of my goals for 2017 is to start the conversation on how to build wealth. In Denver, we are in a huge movement of change – more and more companies are moving here, real estate keeps appreciating and the entrepreneur spirit is quite strong.
You do not have to be a entrepreneur or all that creative to build wealth for yourself. There are many tried and true opportunities to build wealth – stocks, bonds, insurance policies and real estate. Real estate is an excellent way to build wealth and it doesn’t necessarily need to be with a huge portfolio of investment properties or flipping properties.
I recently read this article, and the point was quite simple but so strong. For many years, home ownership was something people strived for. Currently, many millennials are opting out of homeownership instead are choosing to travel and/or are paying off large student loans. But as the author of this article points out, “If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”
The Denver real estate market has averaged a 10% appreciation for numerous year now. Imagine if you purchased a home just three years ago, now you would be able to sell it for 30% more. That is not a bad return on investment. Of course, hindsight is 20-20 and there is still plenty of opportunity if you did not get in the market three years ago.
Here are a few tips if you are entering into the real estate market in hopes to build wealth:
- Be realistic. Know what you can afford and stay under that. No matter what, you cannot build wealth if you are spending more than you can afford.
- Start small. Often your first home isn’t your dream home, and it doesn’t need to be in order to build wealth.
- Leverage. Think of wealth as a long term game. Leverage is crucial to building wealth. Sell a home? Use that money to buy another one (or two). Use your successes to fuel more opportunity.
Opportunities exist everywhere and you can still use a home to start building wealth!
Liz works full-time as a Real Estate Agent with Keller Williams Realty Downtown, LLC. She works with buyer and sellers building generational wealth through real estate. Contact Liz to see how she can help you.
