The journey to build wealth can generally be broken down into 4 distinct levels. As a matter of fact, it’s much simpler than you think it is.
Once you understand each of these Levels, you’ll be able to wrap your head around the power of real estate investing.
In Level 1, you trade time for money, and money for living expenses.
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This cycle will continue forever unless you do one of two things:
Even if you increase your income, you are still at risk of “lifestyle creep,” which means your expenses will rise alongside your income.
You’ll stay on the treadmill until you can reliably widen the gap between your income & expenses.
Once you successfully create more income than you spend, it’s time to progress to Level 2.
Ok…you achieved an important milestone. You now earn MORE than you spend!
But that’s not enough by itself to build wealth.
You’re still completely dependent on your primary income stream!
You need to start investing in (or “stacking”) income-producing assets. I personally believe real estate is the best asset class for long-term income & growth.
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By purchasing income-producing assets, you reduce your dependence on your salary & begin creating a money-making machine that can feed itself over time.
So instead of just stuffing money into a savings account paying minimal interest, we put that money to use and make it productive.
This Level happens over a long time-horizon, so be patient and stick to your plan!