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Credit Cards (in the US)
javeryh:
--- Quote from: ChadTower on March 23, 2011, 11:29:01 am ---Any excess cash I get goes into a capital fund that will eventually be the down payment on investment real estate. My goal is enough passive rental income each month to make two sets of student loan payments - my two elementary school age kids.
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I've thought about doing this but I'm afraid of deadbeat tenants or having to constantly fix stuff (I don't have the time). If I could maybe a buy a 4 unit apartment building somewhere and make the combined rents enough to pay down the mortgage and then some that would be sweet.
JMB:
--- Quote from: ChadTower on March 23, 2011, 11:29:01 am --- My goal is enough passive rental income each month to make two sets of student loan payments - my two elementary school age kids.
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Be sure to talk to a lot of rental property owners in MA beforehand. Lots of headaches. Of the property owners I know personally all have had tenants quit paying rent. In our state it takes forever to get them out.
Samstag:
--- Quote from: ChadTower on March 23, 2011, 11:29:01 am ---FWIW, I'm closer to Fordman's strategy than the credit card folks. I haven't had a credit card in years. My only debt is my truck and my house. Wife's car has no lien. I pay cash for everything and if I can't it doesn't get bought. I have a Mastercard ATM card for online transactions. Sometimes I consider opening up a $750 limit credit card to make it easier to rent cars and make online reservations. I own a token amount of stock from a former employer and contribute the % of salary to 401k that gets me the maximum employer match (immediate 100% return).
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It'd be a good idea to get a real credit card for online purchases for your own safety. If there's fraud on a debit card you lose the money up front and have to file a fraud complaint to get it back. If you use a credit card as long as you file a complaint before the interest is due it's pretty painless and there's no risk of bounced check fees.
ChadTower:
--- Quote from: Samstag on March 23, 2011, 01:00:34 pm ---It'd be a good idea to get a real credit card for online purchases for your own safety. If there's fraud on a debit card you lose the money up front and have to file a fraud complaint to get it back.
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Last year someone stole my wife's Mastercard number (same account). I found 3 charges that were not ours. Our bank had them reversed within 24 hours of my phone call. They handled the rest of the process without my involvement. It was just as painless as a credit card chargeback.
--- Quote from: javeryh on March 23, 2011, 11:59:49 am ---I've thought about doing this but I'm afraid of deadbeat tenants or having to constantly fix stuff (I don't have the time). If I could maybe a buy a 4 unit apartment building somewhere and make the combined rents enough to pay down the mortgage and then some that would be sweet.
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Agreed. I'm still trying to decide if I should buy a townhouse and rent that out to build property management experience. If I ever get to a place where I have something like a 4 unit building I'll end up hiring a property management company. It does lower profit but it takes a lot of that time sinking work out of your hands and into the hands of people who get paid on a percentage basis. It gives them incentive to not only be efficient but help maximize revenue if you choose a quality company to do it.
I'm not saying this approach is any better than any other approach. It is the approach I am most comfortable with and with which I think I have the greatest chance of success.
Fordman:
Im 41 years old, I have a $60,000 (US) a year job. My cars (2004 F150, 2005 Escape and 1994 Escort) paid for, my home is 5 months from being paid for (built in 2002), no credit cards, I have a true 30 and out pension plan that I can retire at age 54, a 401 k with NO company match (because we have a pension plan) that now I put 20% of my pay into. I also contribute to United Way and March of Dimes.
Wife, 5 kids, 6 fish and 1 dog. No health problems (a little over weight), works little to no overtime.
Its all about watching what we spend and what we need vs. what we want. I have found out that if we save our pennies a few weeks, we buy what we want. We dont watch movies in theaters, have very basic cable, we use store brands, shop at yard sales and Im not afraid to ask for a discount.
Now for the hypocritical part of my life, I work for a manufacturer that requires 99% of their sales to John Q. Public be financed.
When my home is paid for, I am going to help my mom get her home paid for. She has been paying on the same home for 49 years now because of all the refinancing over the years. Everytime she re-fi's, it starts her over again. She likes the lower payment, but now she's been paying on the same home for 49 years! 19 years longer than the original pay-off date!
Fordman
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