What Rich People think about Inflation

Maybe you believe inflation is bad but, if you’re me, inflation is a good thing. I make a lot of money from inflation. Hold on! Before you dismiss me as some kind of kook, take a minute and think about what I’m about to tell you.

It won’t take long. Trust me.

I’d like to remove that mistaken fear of inflation that’s been drilled into you since you were young. With my blog you’ll learn how to properly invest in real estate for maximum returns – you’ll take my crazy ideas about inflation and make money too. Lots of money.



Here’s how it works. Let’s use an example to illustrate the concept. This is good stuff.

Say you bought six single-family homes for a grand total of $1 million dollars at ten percent down. That means the balance on your loan is $900,000 the day you close the deal. Let’s further say inflation is 4% and over the next year you pay nothing on the principle, making interest payments only.

At the end of that year, in real terms, your loan just reduced to $864,000. Inflation just paid off $36,000 of your balance while you did nothing but keep breathing!

Do you see how that happens?

You locked in the number $900,000 the day you took out the loan. It will never get any bigger. BUT…inflation reduces the value of that balance at the rate of 4% (or whatever) annually, knocking a chunk off each and every year like clockwork. A dollar a year from now is worth 4% less than a dollar in your pocket right now. That future dollar is only worth ninety-six cents!

In real wealth terms, you just gained four cents on every dollar against the value of the loan your bank holds.

That’s what I call the Great Inflation Payoff.



Read the example passage again if you need to. Think about it. Understand it. That’s how rich people think.

Use inflation to start making great returns with income property investments, history’s best bet. The road to success is shorter than you think.

Why I Failed in making Investments?

On one of my Friend's recommended me to invest in my long term assets. So I decided to give it a try. But I guess I was not at all successful in making good investments. There were many factors that let to my failure. Let me discuss them one by one so that you don't fall in to the same trap.

Lack of Domain Knowledge

With utter excitement I went and just made the investment in my long term assets without even understanding the current market structures and prices. I never considered important to take advices from the professionals and took made all bad decisions which lead to my failure.

No goal in mind

My dad always says that there should always be a proper goal before taking any decision especially in the terms of relationships and finances. I never made any investment goal which lead me to the failure during the last moment. There should always be proper planning in whatever we do. Absence of the same caused me huge money loss.

No Risk Knowledge

My friend only told me about the profits that I would gain from investment, but he forgot to tell me about the risks and knowledge. Whenever you are investing in short term or long term assets make sure your risk taking capacity is high.

Lack of patience

Patience is one of the most required quality any investor should possess. Lack of the same will always lead to investment failure. Risk is directly associated with patience.

No Investment Identifications

I never identified which investment is best suitable for me. Long term or short term. I straight away went and invested in the long term investments. Factors like risk, patience, goals should be kept in mind before deciding the type of investments to be made.

No Right Adviser with me

My friend is very new in this profession. He joined this business 6 months back and as a result of this I never got proper and good guidance from anyone. If I had good adviser maybe I wouldn't have committed stupid mistakes.

I was Over Confident

My dad always used to tell me, "Confidence is good, Over confidence is worst". I din respected his words and as a result of this I lost huge amount of money. I was over confident of my success in investments.



I always had a Bad Luck

A good investor is one whose luck always favor him. And my bad luck just goes hand in hand with me. I invested huge sum of money in playing in casinos and lost all of them.

Aggressive Attitude

Since very beginning of my life I have been very aggressive in whatever I do. As a result of my this attitude I never thought about the losses and always concentrated on making only profits.

I know I have built my own graves, but life gives us a learning lesson. I have promised to myself that I will never make any investments until and unless I am confident about the domain.

Things I Learned From My 2009 Tax Refund

Most of the times it has happened that I have neglected my personal as well as business taxes. The month of April will always be remembered as a nightmare to me. I made a new year resolution that I will not repeat the same financial mistakes that I committed last year. And believe me I was able to square my finances quite well. The best part is we are expecting around $3,000 tax refund.


This time I have learned 3 vital things from my 2009 Tax Refund

This years Tax season has taught me things about being honest, handling relationships and last not the least spontaneity.

Let me explain them in details what I learned and how I managed :

1.) All relationships are equally important in financial partnership

Me and my sister Samantha, both are involved with family finances. We both decided last year that we will work and will keep half of the month's salary for household work and emergencies. When I came to know that we are getting around $3,000 tax refund, I became so excited that I forgot to ask Sam what she has planned with that money. Immediately I got hold of it and realized that for making any financial decisions it is better to discuss it with someone who is also responsible with me for earning. Lesson 1 learned and understood well.



2.) Always be an honest citizen when filing your Taxes

This is the best lesson I have learned till date in the terms of personal finances. My accountant wanted me and Sam to do a kind of fraud with the government in terms of salary income. But we both discussed that in case anyone of us is caught then what will happen to the family. At the end we decided not to listen to the accountant and be honest with the government officials. I know life is a risk, we should risk it. But for me my family is more important to me.

3.) Life is very short and not spontaneous

Sam wanted to take out $500 out of the tax refund money and spend that on shopping and other fun activities. But I made her understand that we have already spent enough on renovation of our house and all. She is the best sister in the world. She understood me and kept back those $ 500 immediately. Lesson 3 learned. We can be spontaneous sometimes with money. Its good though.

Life is full of lessons, Make sure you catch them all