You want to be really rich? You have to live long. So you might say, at this point, my wealth plan is a health plan.
I'm only now starting to really see the fruits of 25 years of real estate investing. That's the problem with compounding, and why it's so hard to stick with.
The reason is, it takes forever to kick in. Imagine your money doubles every seven years: 1 becomes 2, becomes 4, then 8, then 16, then 32.
Now you notice it. But it took until the sixth doubling! Make it to the next doubling—to 64? Now you're in wow territory. Live long enough to reach 128 and you're a legend.
But you had to sit through a bunch of nothing to get there.
One of the reasons I like real estate compounding is because it's on steroids—you have inflation and appreciation pulling the price up at one end, and inflation and paydown reducing the loan balance at the other end.
And both are working exponentially.
But it takes a while to rev up. So you need to get started early, and you want a long runway.
Oh, and you want to own good assets.
I've stopped investing in cheap stuff. The cheap real estate I bought 20 years ago is still cheap. Sure, it went up a little. But expensive stuff has gotten even more expensive.
Should have bought more of that. And frankly, we plan to. New office buildings (any leads on Hillhurst?) and a new house are in the cards, because, we're in an opportunity market. The deals are here — and more are coming…
