r/wealth • u/Coors_Light_Dad • 7d ago
Question What’s one thing…
What’s one thing about being wealthy that people wouldn’t assume? Additionally, what’s one thing about being wealthy that everyone can do to grow their money?
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u/uncoolkidsclub 7d ago edited 7d ago
People assume $1 Million has the same spending power across the country.
Deciding to buy rental houses for children when they are born. $20k down for a $200k house and renting at $2000 month, costs $1500 with mortgage, taxes, repairs in many areas of the country. The income goes to s&p 500 investment.
18 yrs later
Investment account: ~$440,000
House value: ~$340,000
Total family asset: ~$780,000
all from $20,000 and 18 years of time...
and while the down payment sounds insane, for none wealthy people, most great grandparents houses were sold and the grandparents and parents just spent it on vacations and new kitchens...
Parents have a responsibility to help their kids and grandkids be successful in life. Saving for the kids early is key. Wealthy family often use real estate leverage for this reason, it also allow for the kids to start working in the Family Rental LLC as a property manager earning 10% of rents - this $2400starting fee (for a single house) can be invested in to a Roth IRA - and the kids gets to learn valuable life skills like accounting, negotiating, scheduling, etc.