Many are drawn to real estate investing and flipping houses for fast money, great returns and big paychecks, but there is a huge difference between making a great income and building real wealth and having wealth that can last for generations.
Some people dream all their lives of winning $1 million dollars. They envision that will set them up for the rest of their lives and they’ll never have to work again. For a few it might.
Most will need millions just to be able to retire reasonably comfortably at 65 or 70. Those in real estate investing soon realize that $1 million is pocket change for the truly wealthy. Then consider what a lavish lifestyle really costs; between having to drop at least $20 million for a respectable home, a few more for a private jet, over $1 million for a highly envied sports car and well over $2 billion (yes with a B) to boast having the biggest private yacht among your new friends.
Of course there is little need for this extravagance but it does highlight the difference between making good money and being truly wealthy.
Real estate investing is obviously one of the strongholds of the world’s richest individuals and if not their primary way to get there, at least one of their best performing and favorite wealth management tools.
Carlos Slim is in, Warren Buffett is in, Bill Gates certainly owns his share of real estate as do most of the others on the Forbes 400.
So what can we learn from them about creating the type of wealth that can last generations? How can you create so much money through real estate investing that you’ll never be able to spend it all in your lifetime, it will last your family for generations and you can still afford to give billions through philanthropic efforts?
Robert Kuok, the world’s 32nd richest person according to Bloomberg and a real estate titan in the hotel industry recently gave his first interview with Western media in 16 years. He says his wealth can last for generations. So what tips and real estate education lessons in building lasting wealth can be picked up from him?
Firstly he has a strong personal brand, and at 89 he’s still in charge. He also weathered the recent downturn just fine. So be in a position where you can ride fluctuations out for bigger gains. When you have that kind of money you can live through an $8 billion drop in the value of your real estate holdings without having to sell and wait for it to bounce back higher.
Kuok has also diversified into many other channels, including launching some of the world’s top hotels around the globe.
Family is important to him, and instead of focusing on materialism he alludes to the fact that with the right entrepreneurial spirit and character it doesn’t matter what you start with, while all the wealth in the world can be quickly wasted by those that don’t appreciate it or manage it well.
So invest in real estate, diversify, build your personal brand, recognize that you don’t have to start with a lot to make it big, and while enjoying your wealth is great there are more important things in life too.