Decades ago we bought a very small rental house. Later we sold it and were able to use the money we made from that sale (along with some savings) to buy a new house for our family. The old house we had been living in became a rental house. Years later that rental house was paid for. Meanwhile it had doubled in price. We sold that house and together with some additional funds we had saved we had the money for a down payment that allowed us to build a 40-unit apartment. Out of little acorns (just one house) a mighty real estate empire grows (40-units).
Eventually we sold that 40 units, paid our taxes on the gain, and bought some 4-plexes. Now with the money that we can borrow against a single 4-plex we are buying another 40-units as part of a recently formed partnership. Although we have a modest real estate portfolio by some standards we are pleased to see it grow as we buy, then take profits, then leverage up with another purchase, then consolidate through a sale, then leverage up somewhere else. We have followed a slow and careful process along the way as we believe the number one rule in investing is: “Don’t lose your capital.”
Some very good friends bought a small piece of ground, about 24 acres. That land lay between two growing cities. It was farmland, still in the “greenbelt”. The cost for the land was about $82,000. They patiently waited for eleven years while the cities grew towards the land and while a national real estate bubble formed. When the bubble was ripe they sold the land for $2.8 million. Out of a little acorn a giant empire grew. Of course once they planted the $82,000 seed they had to form a company, rezone the land, pay the property taxes, watch the economy, evaluate the real estate market, and, finally, they had to develop a portfolio of buyers so they could play them off against each other and maximize their price. That’s just tending the tree that is growing up from the seed. Eventually, if you are patient and willing to learn and work, you can enjoy the harvest from an intelligent investment.
From small things great things can grow if you will take some calculated risk and be patient. Of course I’ve watched others take more risk and grow faster or take more risk and implode when the market went bad. You must manage the risk and not get ahead of yourself. As Clint Eastwood once said, “A man’s got to know his limitations.”
This is the law of the harvest in operation. We plant something small and tend it while it grows. Eventually it will have fruit well beyond the seed that was originally planted. If we work it, tend it, and nurture it, it will likely grow up to something good. Plant an apple seed, grow an apple tree. Eventually you can start to pick the apples. That may be retirement time, or it might be time to plant an orchard.
Investing in stocks, real estate, and precious metals is risky and could result in losing money. I am offering ideas for your consideration and education. I am not offering financial advice. Please do your own due diligence. I am not an investment adviser. Precious metals is not for everyone. I promote precious metals through American Gold Reserve. You should do your own due diligence when making investment decisions of any kind. You should consult your own financial advisers before making any investment decision. I make no guarantees that by following any advice or suggestion I might make that you will realize any return. Beware, all commodity markets and other markets carry risk of loss.