How Many Wealthy People Generate Their Wealth

• By Kent Clothier
• 12 years ago

Have you ever wondered what wealthy people do to actually generate wealth?

History shows us that real estate is a wealth-creation tool used by many of the world’s wealthy individuals. Think about how much your grandparents purchased their home for, or even how much your own parents paid for their first home. Past home appreciation allowed many to buy their home for much less than what it sold for later on.  You could rely on your own primary residence as your sole investment, but why stop there?  Think about the people who actually go out and take action to build a thriving portfolio of real estate investment properties.

According to a recent survey, three percent of American adults, or seven million people, consider themselves to be real estate investors and they will actively buy property within the next 12 months. An additional nine percent own investment property but have no current plans to buy more properties.¹ 

Today’s lower interest rates, among other incentives, continue to entice more would-be investors to break into the market and active investors to keep expanding their portfolios.

This leads us to our next question. How do real estate investors know what to do, where to invest, the types of properties to invest in, investing strategies, exit strategies, etc., etc.? Is it all a leap of faith? Chances are, these real estate investors either took a) the tough road – the one riddled with bumps and bruises, not to mention lots of wishing and hoping, or b) they chose to take the smart road – where you learn from someone else’s mistakes as well as their successes.

As property demand continues to climb and more people become intrigued by the potential that exists within real estate investing, some of the biggest difference makers are arguably education and formulation of a solid action plan. These two factors could ultimately determine whether a person takes the next step to actually invest or sits out on the sidelines as others get closer towards their goals of wealth-creation.

¹2012 Investment Company Fact Book. Investment Company Institute. 2012.