Growing up, I watched my hard-working parents claw their way to the bottom of the middle class. They sacrificed for me, and I appreciated it. But there’s a reason why we call people like my parents, who punch a timecard and persevere in following American dream, “working stiffs.” You work to make a better life for your children until you are stiff and in the ground, never having had enough money to enjoy the sweetness of life and success.
Wealthy Class vs. Working Class
I worked hard like my parents, but at the age of 27 I still found myself broke and in debt. I had an epiphany when I realized that I could learn from those who had money. I started with Dale Carnegie and Stephen Covey, then read all of the books that the wealthy read. I discovered that you can never get rich from a standard 9–5 job. You get rich from investments, and my research showed me that 90% of the wealthy class get rich from real estate investments.
Real estate investing is the best-kept secret of the wealthy class. They create passive income streams for themselves and teach their children to do the same. I know a family whose children invest in real estate. They are graduating from college with $100,000 in the bank while their working-class peers are graduating $100,000 in debt.
Who Can Afford to Retire?
The state of retirement savings in this country is abysmal. First, you can’t count on Social Security. The experts expect funds will dry up by 2035. That’s little more than a decade. Baby Boomers will still collect, and some Gen Xers, but there’s no safety net for the generations coming after them.
People are saving, but not enough. In fact, one in four Amerians has no retirement savings whatsoever, and women are in worse shape than men. According to a recent study by Gold IRA Guide, “48.9% of women reported having saved less than $25K, compared to only 35.6% of men.”
If you consider that most people live 20 years after retirement, and they aren’t financially stable enough to retire in the first place, “retirement savings” is an oxymoron.
According to a Stanford study, most Americans cannot retire at their same living standard by age 65. Only 5% retire wealthy. Those were the people I studied when I realized that becoming a working stiff was a choice and not a destiny.
~Novel Serialisation: Heavens Fire~
All Investments Are Not Created Equal
As a real estate investment adviser, I often am asked about investing in IRAs, 401Ks, and the stock market. First, investors need to understand that Wall Street is giving people massive amounts of misinformation on a daily basis to marginalize alternative investments like real estate. They only know one thing: buy low and sell high for stocks, mutual funds, bonds, and things like that. And they only get commission for those things.
The problem is that Wall Street is not trained in alternative forms of investment.
If you tell a financial planner that you want to buy some real estate, they’re going to try to talk you out of it. They don’t get a commission and they don’t understand it. It’s a common misconception that real estate goes up in value about 3% a year, so over 20 years real estate doubles in value. They will tell you that it’s on a 3% rate of return, but in reality, because of leverage, it’s a 30% rate of return.
The average financial planner in the US makes $65,000. Is that who you want advising you on how to become wealthy?
By Steve Davis
Steve Davis is the CEO of Total Wealth Academy, LLC, where he mentors tens of thousands of people on how to use real estate to build wealth and create passive income. He is focused on helping middle America achieve financial independence through one-on-one coaching and his daily radio show, and Davis continues to share his insight as a member of the Forbes Business Council.
