Comparing Job Income with Investing
By David S. J. Meng
(A) In 1993, my wife and I graduated and started working. We are ordinary employees, started from 0, and have had no inheritance. In 2011, we started to buy rental houses. We have full-time jobs and three kids, and we spent a few hours per week on real estate. Investing in real estate has made a big difference in our net worth. In addition, our net positive cash-flow from rental properties has approached $150,000 per year.
(B) Returns for Berkshire Hathaway (led by Mr. Warren Buffett, one of the best investors of all time) and SP 500 are obtained from https://www.berkshirehathaway.com/letters/2019ltr.pdf, which is gratefully acknowledged. The returns are averaged from 2011-2019, to be comparable to our time period of 2011-2019. The returns are compounded with dividends and profits reinvested. Small real estate investors can beat the market, and compound wealth at a fast rate.
Hope our small humble example will motivate you to invest and make your money work for you, to reach the dream of financial freedom. (by David S. J. Meng)
My previous postings were deleted. I asked someone with experience and was told that my articles contained link to my book and it is advertisement and not allowed. Sorry.
I have deleted all links to my book, to avoid any appearance of advertisement. Hope my article will be useful and beneficial to some people. I have a colleague, a genius from Australia, whose name is Brian. Years ago, he spent a lot of time and wrote and published a book. I asked him: "How much do you get paid from your book?" He laughed and said: "It's about $0.05/hour for the time I spent in writing the book, much lower than the minimum wage." I said: "That's not worth it. Why did you do it?" He smiled: "Three reasons. First, humans have a need to express themselves. Second, it's a hobby. Your purpose for the hobby is not to make money. Third, if my book can inspire, encourage and lift up some people, it makes me feel that my life has more meaning."