WEALTH IS ACCUMULATED
You could be asking why SABEF Struggledork started his deal-making with the shelter he lives in.
Simple……. Shelter for a Human is a need!! The Human body is a finely tuned creation. Variations in temperature can be life-threatening.
Sipho and I always start with ENVIRONMENT FIRST …… because without a place where “WE” can be safe to carry out our thinking and being, “WE” can waste a lot of ENERGY and TIME taking care of basic needs. There is loads of marketing around homes and castles. For “ME” and Sipho, shelter it is a basis need that must be dealt with so “WE” are not distracted on survival issues.
I have for many years played with the idea of…”your home is not an asset”. It is a popular thought that I have never agreed with. It has not been my reality. It is a simple thought based on:
“ASSETS PUT MONEY IN YOUR POCKET”
The Struggledork Reality is that we spend our life accumulating Wealth… In our minds:
1. ENVIRONMENT is the greatest of all Wealth Creators
2. The Family Home is the start of a FAMILY’S ENVIRONMENT
3. Government and Banks build economies on Housing
4. Economies thrive or fail on the Countries ability to shelter their citizens
5. Banks set-up wealth creation against our ability to manage the repayments of housing loans
Your house may not be an asset but it is definitely a Wealth Creator!
Assets are always cyclical and are at the cause of supply and demand. Housing is always caught in economic cycles, available jobs, proximity to the jobs, and dare I say it, marketing to a Human’s desires. Understanding all the above allows each of us to train MONEY to suit our individual circumstances.
In today’s world, the physical proximity of your Home may not be as important as the speed and width of the broadband of where you live. Coupled with the availability of connecting devices, you are now at the centre of the world, no matter where you live.
Now!! Make it important to understand WEALTH ACCUMULATION and ASSET CYCLES that are available to each of us.
Understanding the MONEY SYSTEM could be the most important study for each of “US” over the next decade.
The Struggledork thinking around when buying or renting our Shelter:
1. Proximity/Closeness: “WE” do not waste ENERGY/TIME traveling to and from our business!
2. Is the shelter safe?
3. Is it the best “WE” can buy today, knowing tomorrow will be different. (“WE study our options and never stop!….Opportunities are everywhere and change all the time)
4. “WE” will only allow a set amount of MONEY for our shelter! (We allocate up to 25% of the Struggledorks MONEY FLOW)
5. “WE” do not intend to pay off our home by Loan repayments. “WE” understand that markets will revalue over time. Remember the market is a cycle. Banks and Insurance companies know that over long periods of time, housing has increased. Over 100 years, their thought is that housing will increase by 3% a year compounding. With housing cycles there seems to be a pattern of prices jumping and then settling back into a routine over period of time. Careful study will reveal the patterns, making decisions easy to make. At the same time, the % of Money Flow spent on shelters remains the same.
6. Sipho and I watch the cycles and buy and sell between cycles, thus creating large sums of Money that are then reapplied to another shelter.
In its most simplistic terms, we buy low, sell high and then rent before we again buy low, sell high.
7. Compounding is very important to the way “WE” create WEALTH and ASSETS. (That’s for another lesson)
8. The Quality of a deal is always about the:
Standards set from the start
Rules made and enforced
Agreements made and kept
9. Rules when applying for a housing Loan:
Borrow over the longest timeframe
20 % minimum down payment ( “WE” do not like paying mortgage insurance on a loan)
Lowest interest rate available (“WE” are always looking at how to reduce the interest rate)
What other MONEY can “WE” borrow against the housing loan? This is very important to understand…. the cheapest MONEY “WE” borrow is against our housing loan. Caution! “WE” do not borrow money on a housing loan unless it increases our Wealth or ASSET base.
Sipho and I understand that this may not make sense to anyone else….it’s the way we think and suits our circumstance.
As a business guy for over 30 years, now I can say that the biggest issue of business Success or Failure always starts with the
FAMILY ENVIRONMENT!!
Real WEALTH is the ability CARE for you and your family Today and Tomorrow whilst creating safe and abundant futures for
ALL TOMORROW
SABEF STRUGGLEDORK
