Post 6: The Shortcut to Economic Freedom
Entrepreneur of the Week Alon Gilmore # Post 6
Who determines what economic freedom is in general?
The most logical definition of this in my opinion, is that if you have a passive income, which pays all your living expenses - then you are financially free. Right? You know that.
It takes time, training and hard work to succeed in everything - there is no quick enrichment.
So how do you do it?
The game is a combination of creating Cash flow for life, a growing cash flow, which increases equity,
And he in turn increases the flow which it is in turn, increases the equity which again increases the flow and returns for goodness sake. Remember that this is the shortest possible way to get there at low risk, (in my opinion) but in itself - it is not short at all.
So before we approach an example like this, let's draw a line:
Digging for equity, equity, but what is it anyway?
Equity, it's that part of the real estate that is really yours (the value of the property minus the liabilities it has, like a mortgage).
Simply put, if you bought an apartment with a 75% mortgage, then currently 3 walls belong to the bank, and one wall - is your equity. As the mortgage decreases with the principal payments, (plus the value of the property increases) so you will have more and more parts of the other walls over time.
In Israel, equity accumulates much more slowly because of the structure of mortgages in the country in general - playing against you, compared to an American mortgage in general - accelerates the process for you, because it ran in your direction. (There is no linkage to inflation for example, and more and more benefits).
Therefore it is easier in the US to increase equity and grow it as the tree grows and produces more branches that produce more fruit. That is why cash flow income is also called “fruit income” in professional taxable parlance.
Let's start with this: How do the rich really invest? (Very interesting).
Here I am going to close a topic of an entire lecture in 2 and a half sentences and a reference:
Most of the assets (wealth) of the middle class are based on their residential apartment - 7.9% - built on equity
Most of the assets (wealth) of the ultra-rich in the United States are built on 49% equity. In real estate and business.
This.
There is nothing to extend words. You alone understand the lesson here.
Read more about it: https://www.visualcapitalist.com/composition-of-wealth/
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And we will move on to the main course - an example of planning an exit to economic freedom:
Previous comments, (clear what, how is it possible without):
✅ I'm not an investment advisor, I'm not a financial planner, I'm even without a degree, remember? Therefore, everything stated here does not replace and does not constitute an investment advice, nor an offer to enter an investment, nor a tax or legal advice - all for the purpose of education only. closed?
✅ The “private pension” that I share with you is purely conceptual. Of course market conditions, and capital gains and all that change all the time.
✅ Credit to the construction of this example program - to my dear partner Shai Halevi, who built and edited it.
✅ Since we know of -a hundred people there are a hundred different perspectives, there may be some who will think that some of the numbers are too small or too large.
Remember this is just an example, please take from it what needs to be taken, the main thing in it and not the bland.
✅ Those who add more money along the way will progress faster and vice versa.
✅This example is built for 15 years, and starts with an initial investment of $ 150,000 first.
✅ Based on income-producing assets.
✅ The percentages of profits and returns from the NIS taken for this illustration are real to the United States, and very reasonable. Of course markets are constantly changing, we have taken the average real behavior according to recent years.
✅ This example will stretch some of you to the effort, but at the same time it is aimed at generating a passive income of 35,000 NIS per month. I believe that every family in Israel will get along with this excellently,
✅ I appreciate that this example can bring different reactions and opinions. That's just fine. Whether you think the plan is practical or not - in both cases you are right.
✅ It is clear that there are other aspects of taxation along the way, and on the other hand I did not consider the leverage from the refinance -
✅ This is not a personal counseling program, remember.
✅ Enjoy and produce.
Come on enough, let's start:
Assumptions:
Initial investment of $ 150,000
Average annual return from Mishkad - 8%
Return on capital gain - 40% of the investment every 5 years
Total average return on investment 16% in the first 5 women (8% of current return and 8% of capital margin).
The Knesset is invested again every 5 years
Every 5 years another $ 150,000 is invested
It turns out that monthly savings require $ 2,500
✔️ $ 150,000 equity investment at the beginning of the investment,
✔️ $ 150,000 at the end of the fifth year
✔️ and another $ 150,000 at the end of the tenth year
✔️ and a total of $ 450,000
✔️ bring in an equity value of $ 1.6 million in 15 years.
The current monthly income alone will be about NIS 35,000!!! (according to yield/interest of %?.
The distribution is as follows:
In year 0,
Invested capital - $ 150,000
A return on investment of another - $ 0
Cumulative income - $ 0
Capital gain - $ 0
Total accumulated capital - $ 150,000
?????
In year 5,
Invested capital - $ 150,000
A reinvestment of another $ 150,000
Cumulative income - $ 60,000
Capital gain - $ 60,000
Total accumulated capital - $ 420,000
What will it do after 5 years?
Monthly income of $ 2,800
Monthly income in NIS - 9,100
?????
In year 10,
Additional capital is invested - $ 150,000
A reinvestment of another $ 420,000
Cumulative income - $ 168,000
Capital gain - $ 168,000
Total accumulated capital - $ 906,000
What will it do after 10 years?
Monthly income of $ 6,040
Monthly income in NIS - 19,630
?????
In year 15,
Additional capital is invested - $ 0
A reinvestment of another $ 906,000
Cumulative income - $ 362,000
Capital gain - $ 362,000
Total accumulated capital - $ 1,630,800
—
What will it do after 15 years?
Monthly income of $ 10,872
Monthly income in NIS - 35,334 !!!
?????
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And with that I conclude the professional part of my entrepreneur of the week?.
Hopefully some of this will contribute to your prosperity.
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What does IN-ALL do?
Let's start with the most important figure:
As you understand, we are really the entrepreneurs. Do not market to an American entrepreneur, do not work with a sponsor, do not cooperate in business (although I am really not against, on the contrary!).
We are in our flesh and blood, we have established the full operation in the United States, and operate in Pittsburgh, Oklahoma, and Texas.
We locate the properties, punish all due diligence, Dow Diligence, negotiations, and only when the transaction is aligned according to our criteria - make a purchase.
Everything is HOUSE-IN, end-to-end - we control the deal.
Entering projects in housing clusters mainly multi-family, for 4-6 years, with a group of investors each of whom is part of the owner of the building.
Buyers are lower than the value, renovate and add value, increase the rent / occupancy, and thereby strongly increase the value of the property as I explained in the post Financial education.
Return to the bank after about two years, get new financing at the new value — and pay off the old loan.
In the surplus created, the investor returns to you so that you can use these dollars of equity again for the next investment, when in our building you share the same percentages, only your returns have jumped because now we have the same rent that will return on much less fund.
And why?
Because your dollars built it, now move on to build it again in the new building.
In Exit, we'll realize the assets, divide the profits — then what? Right! We'll do it all over again.
And again.
And again.
Just let's be healthy.
This is what we do at IN-ALL.
***
Just before closing:
Just like when I started the first post,
The steam is rising from another coffee, and the bitch even now, at my feet again on the left. The mouse is to my right, and in the middle in front of me - the flashing cursor of the rose.
But the page is no longer white.
It has 6 long posts written that I wrote especially for you.
The entrepreneur of the week should be closed. But how to finish?
As we started, in the question:
What you want ?
***
I want to say a big thank you from the bottom of my heart, to my hosts here,
To Lior Lustig, and my father Ben Mordechai, who gave me the pleasure, and also the privilege of talking to you this week.
Took a while, but in the end “we got there in spite of everything”…
thank you so much, friends.
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If you want us to be in touch, or to know more
Be updated on new projects or conferences we do from time to time
Talk to me in private:
[email protected]
https://allinvest-group.com/
***
And that peace will return to Ukraine and the world.? Artist.
Shabbat Shalom.
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