ASSETS – PUTS MONEY IN YOUR POCKET
LIABILITIES – TAKES MONEY OUT OF YOUR POCKET
EXAMPLES OF ASSETS:
1. Bank Savings Interest
2. Stocks / Mutual Funds
3.Commercial Rental Spaces
4. Residential Rental Spaces
THE BASIC CASH FLOW FORMULA IS:
ASSETS = INCOME
LIABILITIES = EXPENSES
INFLATION – DEVALUATION OF THE CURRENCY
Means, that the value of the Peso goes down, the prices of commodities goes up, then the result is inlfation..
Before, your five peso can buy 5 pandesals bread, but now your five piso is only one pandesal bread.
How much EARNINGS do you get in saving money?
MAXIMUM TIME DEPOSIT EARNINGS IN BANKS is only 4%
AVERAGE INFLATION RATE (FLUCTUATING @ AN AVERAGE BETWEEN ( 4 – 12 %).LETS MAKE IT 7% TO MAKE IT EQUAL
FORMULA : BANK INTEREST 4% ( SUBTRACT/MINUS) INFLATION RATE 7% = NEGATIVE 3%
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How much EARNINGS do you get If you invest in REAL ESTATE?
PROPERTY APPRECIATION VALUE -10%
NET RENTAL YIELD - 8%
TOTAL EARNINGS -18%
TOTAL EARNINGS -18%
AVERAGE INFLATION RATE (FLUCTUATING @ AN AVERAGE) - 7%
THE FORMULA:
PROPERTY VALUE APPRECIATION IS 10% AND RENTAL YIELD IS 8% = IS EQUALS TO 18%
18% MINUS/SUBTRACT THE 7% INFLATION RATE = POSITIVE 11%
SUMMARY:
MONEY IN THE BANK IS NEGATIVE 3%
MONEY IN REAL ESTATE IS POSITIVE 11%
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REASONS WHY INVESTING A REAL ESTATE PROPERTY/ ADVANTAGES.
1. lesser management and risk is less
2. passive income/rental yield
3. can be use as collateral
4. property appreciation value
5. legacy (property is from generation to generation)
6. IT WILL PROTECT OR HEDGE AGAINST INFLATION
IDEAS OF Donald Trump IN OWNING/INVESTING a Real Estate PROPERTY.
ABOUT DONALD TRUMP ON WIKIPEDIA
Donald John Trump, Sr. is an American business magnate, television personality and author. He is the chairman and president of The Trump Organization.[1] Trump is also the founder of Trump Entertainment Resorts, which operates numerous casinos and hotels worldwide. Trump's extravagant lifestyle and outspoken manner have made him a celebrity for years, and more recently with his NBC reality show The Apprentice, where he serves as host and executive producer.
Trump is the fourth of five children of Fred Trump, a real-estate tycoon and developer based in New York City. Donald was inspired to follow his father into real-estate development,[6] and beganworking on projects for his father's real-estate firm while still in college. Upon his graduation from the Wharton School of the University of Pennsylvania in 1968, Trump formally joined his father's company, Elizabeth Trump & Son.[7] He took the helm in 1971 and renamed it The Trump Organization.[8][9]
In 2010, Trump expressed interest in becoming a candidate for President of the United States in 2012.[10][11] On May 16, 2011, he announced he would not run.[12] On May 23, he stated he has not completely ruled out running if no viable Republican Party candidate emerges.[13]In 2011, Trump ranked No. 17 on the Forbes Celebrity 100 list.
ACCORDING TO HIM, IN INVESTING A REAL ESTATE PROPERTY ONE MUST Be willing to Pay a Premium for a Prime Location.
Four things to look for in A PRIME LOCATION:
1. GREAT VIEWS2.PRESTIGE LOCATION
3.GROWTH POTENTIAL
4.CONVENIENCE
qouted from the book called "TRUMP strategies for REAL ESTATE"
