Equity is power (Chapter 6)
Build equity, and invest now.
If you have paid down a substantial amount on your home mortgage, then you have equity. Home equity is your portion of the value of what your home is worth. I say portion because your lender has their portion of the total value invested in your home as well. It is important to understand home equity, although equity does not only pertain to your home; it can also be other valuables that you own. In this case, we will talk about home equity, because most people build equity in their properties. Home equity is an asset, so it is important to understand this.
My colleague is also pursuing his own goals and hoping to retire soon. He has built his own home and bought and sold many houses in a short time hoping to build up profit. Although it is possible to make money by flipping homes, it’s hard to come out on the winning side of this equation because of the fees weighing down your profit: mortgage fees, real estate agent fees, lawyer fees, land transfer fees, land transfer tax, Mortgage Insurance fees (CMHC), etc. Also, if the house you are selling is not your primary residence, you have to pay capital gains tax . We encourage people to hang on to their home longer to build equity and use the value of their property to leverage money, to borrow from the bank and invest again. Also, by having equity build in your home you can now turn your mortgage into a taxable investment. Read the chapter (6) on the Smith Maneuver.
Procrastination – Chapter 1
Financial independence is an expression generally used to describe the state of having sufficient personal wealth to live, without having to work actively for basic necessities. Financially independent people rely on assets that generate income that is greater than their expenses.
It does not matter how old or young someone is or how much money they have or make. If they can generate enough money to meet their needs from sources other than their primary occupation, then they have achieved financial independence.
Why read this book?
- What is it like to wake up when your body is rested, without an alarm clock?
- Who are these people among The Fortunate Few, and how can I join them?
- How does one become financially free, and never worry about money again?
- What is the “winning formula” to reach financial goals?
- How can I improve my lifestyle and focus on my long-term goals?
What readers are saying!
Talk about informative, I couldn’t put this book down because I wanted to know how I can do this too. Who wouldn’t want to live a life of freedom and do as they want with their days. Sign me up, I’m a believer, I too want to be among the fortunate few!
I’ve been investing for the past 8 years and am a landlord myself. This book thaught me some things I didn’t know about. Very interesting concepts, thanks so much!
This is exactly what I needed, talk about fast tracking one’s success. This is a no brainer, I am getting my son to read this book too.