Throwing in my couple of cents...
Based on my experience, and various literatures that has helped build a simple mindset (the millionaire next door, rich dad/poor dad and blue ocean strategies come to mind...) I've been very happy financially taking some of the steps I’ve taken in the last few years. My philosophy is very simple - hard work, live below your means, maintain excellent credit (740+), think long term, always look for people smarter then you to be mentors (this is hard..) and maximize the 'value' and return on your money...
As such, I've done the following:
1.) Focused on my personal education to provide me the ability to have a job with reasonable pay, and live below my means so I can have the ‘most’ (eg very little..) capital to work with.
2.) Maximize 401K & Roth IRA - and forget looking at it, just let it grow modestly and if you make it to 6x you can have some pocket change
3.) Purchased at least 1 property / year for the last 3/4 years, renting out the properties, actively managing them and leveraging additional purchases through the home. This has been the most active part of the last few years and I've been very happy. It also provides great tax advantages as well....
4.) Purchased stock here and there for x amount of time speculating for 10%+ return during that time (eg buy MSFT @ 22 and sell at... 30+
)... but nothing fancy or big in this area.. this is very cut and run and I do not claim any expertise in it...
5.) Actively pursuing a business venture that can provide income better then working in corporate America (have lots of ideas.. but have not taken the plunge yet…open to ideas though ...)
I particularly like Real Estate though. A 5% or 10% down-payment always provides excellent returns when you look at the last *30* years when holding a property for *at least* 5+ years. For example: Take 25K on a 500K house with a *very* conservative 5% return year would be worth $640K after 5 years and even with 6% closing costs, return is still about 100K. This is 300 - 400% on the original 25k. This is not to say that RE doesn't go down - yes it does, but with some sound principles, good management and holding period of "at least 5 years" the return will still be very reasonable...
Sure beats average stock returns of 12% a year as far as I'm concerned….
I know that this is very general, and it does not specify all the little details and costs that come up in between. Particularly with RE though, the costs are tax-deductable, and 'smart' remodeling investment have returns of at least 1-1 (however, everyone that says "spend 10K on remodeling and get 50K back is, generally speaking, wrong and doesn't know what he/she is talking about.....)
As a result of this philosophy, we (my wife & I) own 2 residential homes in good solid neighborhoods with considerable equity, and 4 apartments with good equity that provides excellent rental income (in comparison to residential homes - at a cost in appreciation, but I'm very happy with the other 2 so I see it as diversity..) This has blessed us with acquiring a net worth with stocks, RE and other assets that we're very comfortable given our age (24 & 19..) and that should grow ok over the next few decades…
We were looking at purchasing another property this fall but we decided to get an NSX instead and forgo that adventure till next year
(Actually I found an excellent home that I felt was 20% undervalue and probably the best home I saw in the last 3/4 years.. however I lost it b/c of stupid reasons and I got bummed, real bummed .. so I bought the NSX to cheer me up
)
In short, the most important lesson I've learned in life and from everyone that I've seen be successful is - work hard and stay on top of your game, keep your eyes open and take calculated risks, be good at what you're doing, maximize the return on your dollar, and most importantly work hard...
Good luck to everyone that is looking for ways to get rich (myself included
)! And, if anyone is looking for a partner in commercial RE – let me know, I’m looking for some new adventures…. :biggrin:
. I wasn't trying to start an argument here, so don't take offense. I didn't take offense to anything you wrote, nor did I think you were stepping on any toes :wink: . I don't know much about the stock market, so maybe I should not have commented, and I apologize :redface: . But many people think that the California market is bad and it's just simply not. It's not where it was 4-5 years ago, and we probably won't see that again for a long time, if ever. But let people think what they will, it works better for my interests because it makes it easier for me to buy.
It's a fool that puts all his investment eggs in one basket, especially in Real Estate. I have MANY avenues of income, one of which is my Investment company, but it is NOT my main source of income. Real estate is virtually NEVER a bad investment. You only lose money if you sell when the market is bad, otherwise you will always have appreciation, because the market will come back up. 
