Everyone in my family, extended family, and relatives in China is healthy. Thank God no one has got the virus. Thank God, our rental properties have been doing relatively well.
[2]. 2020 is the 9th year of investing for my wife and I. In 2011, my daghter's sickness prompted me to start to lay a financial foundation for the family.
As of 12/31/2020, our humble wealth grew to $6.97 million.
12/30/2019 was $5.5 million.
Wealth growth rate in 2020 = (6.97-5.5)/5.5 = 26%.
[3]. Mistake
In February 2020, I was negotiating to buy a townhouse as a rental property. We submitted the contract twice, and I was only $5000 away from grabbing that house, but I waked away. Then Covid hit, and I thought that I did the right thing to have walked away, thinking that prices for townhouses would drop. By May, I started looking again and the price had already jumped. I lost a good deal. It also shows how difficult it is to try to predict the market.
[4]. SP 500 Investing Using Lender’s Money
From March through October, I used a line of credit, a HELOC and two cash-out refinances to borrow money and invest in SP 500. About 30% increase in 2020, and the net profit (after deducting the interest payments) = $283,000.
[5]. Lost Opportunities
In March, I contacted several lenders to get loans. One local bank’s VP knows me and she approved my loan, and we signed all the paperwork. The VP submitted it to the board for approval. By then, Covid was surging, and the board got scared, and denied my loan application. Another lender considered my loan application for several months and did nothing. If I had gotten these loans, my SP 500 profit would have been higher.
[6]. My limitation
Some people invested in individual stocks and made huge returns in 2020. Some people did frequent trading and made a killing. My limitation is that I cannot do these things. My preference is to do passive investing and spend little time. This personality limited my rate of return in 2020.
Wishing you a happy, healthy and prosperous 2021!
David Meng, author of book “$5 Million in 8 Years: Real Estate Investing on the Side”
In 2020, the doctors, nurses and other medical professionals fighting in the front line to save Covid patients are heros. Some of them lost their lives saving patients. The society owe them a thank you. Let's thank them and bless them.
Investing in SP 500 is simple and no big deal. But using borrowe
Investing in SP 500 is simple and no big deal. But using borrowed money is different. Rich dad poor dad books describe how he got rate of return = infinity. If you think about it, if one borrows money from the banks, and makes $280k net profit, without using any of his own out-of-pocket money, then the rate of return = $280k/money out of pocket = $280k/0 = infinity. So that is consistent with what he described.
Yes, you are right. This is not for everyone. Most people
Yes, you are right. This is not for everyone. Most people will not do it, even if you show them the math. As people say: "In investing, the most important organ is the stomach, not the brain."
A Small Summary for 2020
[1]. Give Thanks
Everyone in my family, extended family, and relatives in China is healthy. Thank God no one has got the virus. Thank God, our rental properties have been doing relatively well.
[2]. 2020 is the 9th year of investing for my wife and I. In 2011, my daghter's sickness prompted me to start to lay a financial foundation for the family.
As of 12/31/2020, our humble wealth grew to $6.97 million.
12/30/2019 was $5.5 million.
Wealth growth rate in 2020 = (6.97-5.5)/5.5 = 26%.
[3]. Mistake
In February 2020, I was negotiating to buy a townhouse as a rental property. We submitted the contract twice, and I was only $5000 away from grabbing that house, but I waked away. Then Covid hit, and I thought that I did the right thing to have walked away, thinking that prices for townhouses would drop. By May, I started looking again and the price had already jumped. I lost a good deal. It also shows how difficult it is to try to predict the market.
[4]. SP 500 Investing Using Lender’s Money
From March through October, I used a line of credit, a HELOC and two cash-out refinances to borrow money and invest in SP 500. About 30% increase in 2020, and the net profit (after deducting the interest payments) = $283,000.
[5]. Lost Opportunities
In March, I contacted several lenders to get loans. One local bank’s VP knows me and she approved my loan, and we signed all the paperwork. The VP submitted it to the board for approval. By then, Covid was surging, and the board got scared, and denied my loan application. Another lender considered my loan application for several months and did nothing. If I had gotten these loans, my SP 500 profit would have been higher.
[6]. My limitation
Some people invested in individual stocks and made huge returns in 2020. Some people did frequent trading and made a killing. My limitation is that I cannot do these things. My preference is to do passive investing and spend little time. This personality limited my rate of return in 2020.
Wishing you a happy, healthy and prosperous 2021!
David Meng, author of book “$5 Million in 8 Years: Real Estate Investing on the Side”
In 2020, the doctors, nurses and other medical professionals fighting in the front line to save Covid patients are heros. Some of them lost their lives saving patients. The society owe them a thank you. Let's thank them and bless them.
Investing in SP 500 is simple and no big deal. But using borrowed money is different. Rich dad poor dad books describe how he got rate of return = infinity. If you think about it, if one borrows money from the banks, and makes $280k net profit, without using any of his own out-of-pocket money, then the rate of return = $280k/money out of pocket = $280k/0 = infinity. So that is consistent with what he described.
Yes, you are right. This is not for everyone. Most people will not do it, even if you show them the math. As people say: "In investing, the most important organ is the stomach, not the brain."
新年重温朽兄名言：
讀萬卷書不如行萬里路
行萬里路不如閱人無數
閱人無數不如有名師指路
有名師指路還得自己去悟
自己悟了還得勇敢邁出第一步
similar with yours, I got 7.4M by the end of 2020 (not including properties like house, cars, .....).