Reply to Is "the system" designed to keep us poors in our place"

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[quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Our HHI is between 225-230k from our day jobs.  I made $200k last year on the house flip - that was a really good one.  The time before it was about 70k.  I made about 25 k in the consulting business this past year.

(I thought we were "the poors" here on DCUM bc we don't have millions of dollars...)[/quote]

No, it just sounds like you are not investing properly.  How much do you have in securities?   You are making income, but not growing your assets.  [/quote]

I have 145 in retirement accounts.  After we sell this flip (God willing) maybe 500k in cash.  3 rental properties but all mortgaged with maybe 20 percent equity and 20 more years to go before the notes are paid. [/quote]

If you are flipping a house, then using the profit to buy another house to flip, you are doing this wrong because in the end all you are doing is moving money around.  Hat you want to do is invest that profit and then use those securities as collateral to for a loan that you use to buy he next house to flip.  You will never become wealthy if you are leveraging all your assets to the max to make your next deal.

If you want to become wealthy, you need to build up your assets. What you are doing is making money not making wealth.  Our HHI is th same as yours, and we don't have the second jobs or house flipping income you do, but we have 95% equity in our home and considerably more money in equities than you do. We also carry so little debt that we could pay everything off, including the house, in a month if needed.

We reinvest almost all dividends and gains from sales to get our portfolio to grow.  We also pay someone to manage our investments, the value they add is much greater than the cost.  Keep in mind that capital gains is taxed at a lower rate than income.  That is on reason why Mitt Romney pays so little in taxes compared to his wealth.

Thank you- I know how to make profit from RE flipping but very ignorant about how to keep the profit in my pocket.  I do hold the property for over a year so it is taxed as long term capital gains but that tax rate just increased in the last year or two, which has contributed to my "the system is stacked" conspiracy theory.  Would you suggest I take the profit and pay off one of the rental properties and borrow againt it for the next flip?  If not, would you mind providing an example of a security I could purchase and borrow against?

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