Most Millionaires are not heavily invested in realestate

[bopa media]

According to reseach by the Northern Trust, on average people who have 3mm+ have 13% or less invested in realestate in 2007 although that is up from 8% in 06'

I find this interesting as on this board everyone is soo interested in realestate investing in hopes to provide income and help them generate wealth, but the people who actually are wealthy dont see it that way.

Dont get me wrong realestate DEVELOPMENTis a great way to build weatlh but it's going to be quite hard in the coming years until the market picks up, and realestate invesment can be a good way to grow some outside income but unless you own a large portfolio of properties or a few big ones it will help your kids alot more than it will help you
http://www-ac.northerntrust.com/cont...merica2007.pdf

theres alot of good stuff in this report if your interested in becoming wealthy and seeing how they plan their financial lives

[radreality]

I didn't read the report, I'm kind of in a hurry to get out the door right now. But does it address the possibility that there might be a higher percentage who are invested in businesses which invest in real estate? So it doesn't appear that the people are personally invested in real estate.

______________________________
Robert Falk
Business Developer / Investor
Self Help & Success Forum

[jasaunders]

link doesn't work

[bopa media]

link doesn't work

Fixed, should work now

[sarathy]

According to reseach by the Northern Trust, on average people who have 3mm+ have 13% or less invested in realestate in 2007 although that is up from 8% in 06'

I find this interesting as on this board everyone is soo interested in realestate investing in hopes to provide income and help them generate wealth, but the people who actually are wealthy dont see it that way.

Dont get me wrong realestate DEVELOPMENTis a great way to build weatlh but it's going to be quite hard in the coming years until the market picks up, and realestate invesment can be a good way to grow some outside income but unless you own a large portfolio of properties or a few big ones it will help your kids alot more than it will help you
http://www-ac.northerntrust.com/cont...merica2007.pdf

theres alot of good stuff in this report if your interested in becoming wealthy and seeing how they plan their financial lives

What else do you think they invest on? If you were a millionaire, what would you invest on, apart from real estate?

[eich41]

First off, there is a problem with the data. A large majority of their demographic owns/owned their own business. Many of those people also owned the building that the business was in. As most small business owners would attest, many times when selling a business or trying to place a value on a business, the largest part of the equity comes from the property that the business owns.

In addition, the reason why real estate is such a powerful tool for creating wealth is the leverage. If you can purchase property with no money down, or even assuming a 20% down payment you're still leveraging your money 5:1 and putting it in a rather conservative, well-performing (over time) investment. For instance, you purchase a property that costs 200k. You're down payment of 20% (40k). Now real estate appreciates at a rate of around 6-8% historically. After 10 years your property is now worth about 430000. For ease of calculation we'll ignore interest and taxes. So in 10 years you made 230k on your 20k or a cash on cash return of 11,500% Had you invested that 20k in the stock market over the same period (historical return of 10%) and you wind up with about 52k or a return of about 215% over the same time period. THAT is why real estate is such an attractive investment and means for generating great wealth.


There are two reasons why these people aren't holding large amounts of real estate is because:

A. They aren't directly holding real estate but they hold it through businesses they own.

B. They have accumulated a lot of wealth and therefore real estate simply makes up a smaller portion of their total net worth. Most people that hit the 5MM mark aren't looking to exponentially increase their wealth (therefore they don't care about leveraging their assets to accumulate more wealth). Let's face it there isn't much of a difference in lifestyle between someone who's worth 5M-10M and someone who's worth 20M.

When you look at statistics and studies you must analyze the information. It's very easy to skew statistics (ask Michael Moore) or simply create a misleading statistic as is the case here. Too many people take information such as this at face value rather than analyzing the data and how the statistics were derived.

[Aletheides]

Real estate makes the most millionaires in America.