I have been investing in the real estate for the last 35 years and have lived the life of a rich person. I have lived in the best homes and they have appreciated in value when I sold these houses. Whatever I have paid in the shape of mortgage, interest, and insurance, I got it back as it appreciated so much in value.

My house, which I had bought for $89,000 and after staying there for 16 years sold for $339,000. Basically, my mortgage payment was like my rent, which I was paying to the bank. I took a mortgage balloon of 15 years. My house had become free and clear after 15 years, so when I sold it, I had $339,000 in savings! Basically I was paying rent to myself. I also have a small business of retail— running a small floor covering store. Most of the people who were working for me made money in the range of $8 to $20 an hour. I noticed that some of them who were making $8 an hour did not complain that they could not live on what they made. They had old but reliable transportation. If they were married, their wives were working full time or part time depending on how many children they had or how old they were. Their habits were simple. I noticed most of the time that they brought their own lunches and sodas and snacks to eat and warm up their food in the back kitchen and eat it. Most of them did not own their homes. Sometimes they were sharing their homes with their families or friends. I always insisted that they saved their money and bought their own homes. Some of the houses were available for $10,000 to $90,000. These houses were not as good as some of the apartments they were leasing which had swimming pools, cable TV and were cleaner and they were paying close to $600 to $900 in rent per month. But as their spouses were also working, they were happy and never complained that they could not pay their bills. These people, if they had saved a little bit of money could have bought one of those $50,000 to $90,000 homes. In the last 5 years, we had a double digit increase in the prices of houses. Those houses have now more than doubled in prices. For example, if they had bought a $90,000 house, it would be worth $100,000 now. They had an equity or savings of $90,000 in that house. How can you save $90,000 after paying Uncle Sam 30% in taxes and social security? Interest rates had gone down by 5.5%. So on a $90,000 house, total mortgage payments were close to $450 and taxes and insurance and maintenance were $250 a month. A lot of the time, some of their houses were available for no down payment or with only 5% down payment if you were a first time home buyer.

My own personal home, I bought it in 1974 for $20,000 and after 5 years when I sold it, it sold for $52,000. My family had grown as well as my income had grown 4 times so I had a necessity as well as I could economically afford a bigger home. I bought a new house which was 30 years old but right on the river with a nice lot for $95,000. The home was pretty old. It needed LTC (loving tender care). We changed our kitchen cabinets and some flooring after a few years and because it had a nice view, it looked like an expensive house. My family income in 1979 had grown to $150,000 a year which was pretty high in those times. At least is seemed to us that it was pretty high, as we were able to save a lot of it. I had two old cars; both were 2 years old— a Ford Mustang for $2000 and a Chevrolet Malibu for $3500. I bought the Malibu from an old lady who had become a widow and had only 3000 miles on it. It still smelled fresh like new car inside. My sweet lady Malibu always started even when it was 15 degrees below zero outside. It had to be plugged in sometimes when it was cold. With the exception of changing oil and brake pads, I do not remember putting any money on it. God had made that car for me to serve me. Sometimes cars can be a pickle if you happen to get one of those pickles, you are spending money on repairs and losing time when you should be working. I had at least 30 old cars, which my family and my company bought over 30 years, with the exception of 2 on which I had problems, otherwise every car worked out great and was a good means of transportation.

My company and I have made millions by the year 2007, but I still drove my old 1994 Lexus, for ten years as it never gave me any trouble. It ran like brand new then why to spend etc money on new model cars. I have no lease payment on it and it brings me back and for the to work which is only 12 miles. If I lease a new Lexus L5450 for 3 years, it will cost me $1,000 a month. I would rather give my savings to charity and help feed the poor and educate the poor who need a college education. In my family, between me and my wife and my son, we need 3 cars. So we decided to lease one expensive car which we can share and we still keep our old cars running if they are in good shape. Why spend if we can save for our old times when we won’t be able to work or will like to do charitable work to improve ourselves and the community?

By Ashok of http://becomerichinfiveyears.blogspot.com

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