“I will teach you to be rich” application real estate

[Richard Escajeda]

I just finished reading Ramit Sethi book called “I will Teach You To Be Rich” I loved the book currently applying steps in the book. My only issue is its not really real estate investor friendly.

He mentions his ladder of personal finance

Rung 1: invest in 401k for work to get at minimum a match

-done no brainer

Rung 2: pay off all debt

- done school loans finally gone :)

Rung 3: Open roth Ira and contribute as much as possible to max out

- I was considering rolling my old job 401k into this and add like $50 a month to keep it growing

-I know roths have the potential to be used in real estate, don’t know specifics I’m still a newbie.

Rung 4: If you have money left over increase contribution to 401k max if you can.

-I would prefer to save this extra money on an online savings account to save up for my next house.

...Theres a few more rungs if you have more money to invest but their not really applicable to me

What I’m asking is how can I tweak this personal finance system in favor of real estate intelligently. Open to any ideas and discussion.

[Mike Dymski]

Sethi believes the following:

• After inflation, the average return on owning a US residence is zero (Robert Shiller stats)
• Most people don't factor in the true cost of owning a home (interest, taxes, insurance, maintenance, cap ex, sales commissions)
• There is a lot of work involved in sourcing and managing rentals (vs alternatives)
• The masses will not have the perseverance to properly purchase RE investments
• Index fund investing is easy and proven

He is right on many fronts and is speaking to the masses.  We are not the target audience.  Successful RE investors are a very small fraction of the population.