How do they do it. Expensive houses. Someone enlighten me.

[Psyche_92]

I've been looking around on real estate websites, trying to get some inspiration for later on in life. I've always had the dream to have a big house that i can enjoy with my family, but i don't understand how you would earn enough money to buy one that expensive (1M+). There are houses ranging from 250k-500k, which is still acceptable to me as reachable if you count all expenses ( Own contribution from saved up money, small loan from bank or maybe a small mortgage, monthly salaries from a job assuming that you and your partner have a steady income),  but than you have these houses that range from 1M to 2M.. Which i can only see possible with a huge mortgage or having a job as a lawyer, doctor, pilot,... Tell me if i'm wrong, but that's what i've been seeing so far. Those houses are always owned by people with those jobs, and i find it rather sad. Sure i could study to become one of those, but i don't want to do any of those jobs. I feel like they don't even have enough time to enjoy the house themselves. There has to be another way no?

I know a big house is not everything in life, but i feel like i can't just leave the dream behind me. It's something i really want in life for myself.

[Elisabeth]

So... what job DO you want to do? 

[Girzo]

Entrepreneurship.

[Psyche_92]

Just now, Elisabeth said:

So... what job DO you want to do? 

I want to become a psychologist/psychotherapist.

[Nahm]

Yes, Entrepreneurship.

[Nahm]

1 minute ago, Psyche_92 said:

I want to become a psychologist/psychotherapist.

Open your own practice, replace yourself there.  There is no reason you can’t have the house you want, and not have to work. 

[Psyche_92]

@Nahm @Girzo

I live in Belgium. The government literally kills all willing entrepeneurs here, with their ridicilously high taxes and social contribution laws. 

Edited April 25, 2018 by Psyche_92

[Girzo]

That's the way, no-one said it's super easy. For some, it's still easier than working 40 years in a life-draining corporate job.

You live in the EU, set up a bussiness in Germany or anywhere really, if it's that bad in Belgium (which I don't believe).

[dude]

Look into developing financial freedom. Download some podcasts. There are people who save 80% of their income and do things called house hacks (Link) that let's you progressively buy a bigger house and sell it again. You do have to study the real estate business but it is viable. You kinda like work a job, save up as much as you can and start your own real estate portfolio.

A big house and a lot of money requires A LOT of energy and attention. You can't just do it on a whim, your whole life needs to revolve around that shit for a long amount of time. Think about if you are really able to give up other goals and dreams. It's really about what you are willing to give up for it. I mean you can save 80% of your income, invest it, live like a hobo for a while. But are you really willing to do that. Or you could give up your dream job and go work as a doctor. But are you really willing to do that?

[Psyche_92]

1 hour ago, dude said:

Look into developing financial freedom. Download some podcasts. There are people who save 80% of their income and do things called house hacks (Link) that let's you progressively buy a bigger house and sell it again. You do have to study the real estate business but it is viable. You kinda like work a job, save up as much as you can and start your own real estate portfolio.

Seems like a good idea for the future. Thanks for the link! 

[Girzo]

That's not a good idea if you want to have a million dollars house. How much can you save a month by not paying a rent? A $1000? (I don't know prices in Belgium) Let's assume optimistically that you even earn $2000 a month from your properties. To earn a $1.000.000 you would need over 40 years! Guess what, your kids will be grown-ups by then. Plus you can't escape taxes, you will be taxed as heavily as an entrepreneur. And there's inflation, so you would need to keep that money on investment deposit, not to earn, but to avoid loosing money!

Paradoxically, going into bussiness is safer than all those "safe" tactics.

 

[Girzo]

All that saving makes sense only when you are already earning a lot of money. Look at Leo, I would estimate that he earns around $200.000/year (50k YouTube/150k other stuff), maybe less, maybe more. The thing is, if he saves up 80% of his earnings, well that's something. And if you save up 80% from your $2000 full work time salary then you are living in poverty and saving up your milion would still take you 50 years.

You can't win with Math. You need some leverage, wheter it's being extremly good at something like basketball players, singers, writers, etc. or bringing value for a lot of people with your bussiness like Leo does.

[Moreira]

You can buy a terrain in the countryside and put a passive house made of wood or other eco-materials in it. This will cost you less than 250-300k.

Also you can modify the design, and is not as expensive than brick building.

[Girzo]

2 hours ago, dude said:

Look into developing financial freedom. Download some podcasts. There are people who save 80% of their income and do things called house hacks (Link) that let's you progressively buy a bigger house and sell it again.

Is this guy that @dude has linked living off his house hacks? No, he's not stupid. He has a bussiness, a website, is writing ebooks and selling expensive courses to build his wealth. So maybe rather than following what he says, you can follow what he actually does. Just some more food for thought.

[NoSelfSelf]

There is a guy on twitch that earns 500k$ a month 

[Nahm]

5 hours ago, Psyche_92 said:

@Nahm @Girzo

I live in Belgium. The government literally kills all willing entrepeneurs here, with their ridicilously high taxes and social contribution laws. 

 Move, or change perspective. You’re either looking for ways to succeed, or you’re not. 

[Nahm]

5 hours ago, dude said:

Look into developing financial freedom. Download some podcasts. There are people who save 80% of their income and do things called house hacks (Link) that let's you progressively buy a bigger house and sell it again. You do have to study the real estate business but it is viable. You kinda like work a job, save up as much as you can and start your own real estate portfolio.

A big house and a lot of money requires A LOT of energy and attention. You can't just do it on a whim, your whole life needs to revolve around that shit for a long amount of time. Think about if you are really able to give up other goals and dreams. It's really about what you are willing to give up for it. I mean you can save 80% of your income, invest it, live like a hobo for a while. But are you really willing to do that. Or you could give up your dream job and go work as a doctor. But are you really willing to do that?

Based off a net income of 50k, spend 50%. With the remaining 25k buy 2 55k houses and rent them out, net about 1,600 a month.  Do this for 3 years, and you’d be making more from doing nothing than from the 50k job. Do it for 5 years (and put all rental income to the 30 year mortgages - paying them off in 5 years) and you’d make 100k a year. 

5 years...100k a year for life. 

Saving up a million dollars sounds great, until you calculate the spend down, and market risk involved even for a 10% annual distribution...and like you said, takes way too long to save it up. 

Your whole life does not need to revolve around it. On the contrary, it frees up all your time. Pick a house, close on it, list it online to be rented, pick a renter, sign the lease. Done. Approx once every two years it needs a repair. Tenant calls you, you call a repair person. (10 minutes every 2 years)

@Psyche_92

A 500k house with a 30 year fixed mortgage at 5% interest costs about 2,600 a month. Using the example above, you could rent out roughly 3 rental houses and you’d be mortgage payment free on your 500k home. 

 

[Elisabeth]

1 hour ago, Nahm said:

Based off a net income of 50k, spend 50%. With the remaining 25k buy 2 55k houses and rent them out, net about 1,600 a month.  Do this for 3 years, and you’d be making more from doing nothing than from the 50k job. Do it for 5 years (and put all rental income to the 30 year mortgages - paying them off in 5 years) and you’d make 100k a year. 

5 years...100k a year for life. 

1

Have you done that, Nahm? 

Sounds too good to work.

[Nahm]

@Elisabeth I did. 

[Slade]

Sell a $100 product to 10,000 people and that’ll be your first million. 

Sell a $200 product to 5,000 people. 

It’s simple not easy. 

Real estate investing is a great way to tie your money up in something that’ll produce a large income. Renters pay your mortgage for you and you gain capital. Some of the richest people I’ve met were real estate investors.