再探讨“REAL ESTATE 的四重魔力" with disclaimer from云起时99
>第一重魔力：Passive income.
[云起时99] Unless you get to a certain scale, sweat equity would be a part of your RE wealth. There is nothing passive about that. This means if you don't have a rich daddy, forget about passive income for a long while.
[Miat]: It usually takes at least 10 year for 1st Magic power to show its powerfulness.
>第二重魔力：Inflation income.
[云起时99] Only if you can wait it out. And you have to assume the inflation is not too high or too low. After sales commission, property tax and up-keep, you would be lucky to break even in a few years in the current environment.
[Miat]: It usually takes at least 10 year for 2st Magic power to show its powerfulness.
>第三重魔力：Tax effective income.
[云起时99] Somehow this is a little in conflict with #1 (if I recall correctly). Also it depends on your ordinary income. Always consult your accountant/ tax lawyer first.
[Miat] 3rd magic power appears to work for you immediately.
>第四重魔力：Leverage income。
[云起时99] 杠杆？这玩意最近被批的很很厉害，虽然它魔力巨大但俺还是少言为妙，大家还是慢慢体会吧。
[Miat] 4th magic power, leverage, is actually the most powerful magic. Leveraging is the key element of capitalism modern and old. In the old capitalism, factory owners leveraged workers' labor to extract profit from them (like today's China). In modern capitalism, financiers leverage money's buying power to extract profit from unknowing buyers. Although we have witnessed the backfire from modern capitalism, this leverage will continue in the future, probably in a different way and form. As long as greed is there, leverage will be there. For our middle class investors, without leveraging power, it's almost impossible for people to get rich. Leveraging others' money is a great way to get rich. In real estate investing, we leverage banks' money. As long as you can manage your cash flow, success is not only possible, but guaranteed.
As a summary: Real estate investing requires a big patience. There is no hope of getting rich immediately. You will only taste some sweets when you survive to your *second* decade. In your first decade, there would be no fruit, but all work. 8 out of 10 landlords would fail during this first 10 years because they don't have enough confidence and conviction. In addition to that, every cycle will produce countless noises in the background to shake your confidence, without resisting these noises, one would find it hard to last a couple of years, let alone 10 years.
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