Do Millionaires Invest in Real Estate? The Wealth-Building Secret (2024)

FAQs

Why do 90% of millionaires invest in real estate? ›

Federal tax benefits

Because of the many tax benefits, real estate investors often end up paying less taxes overall even as they are bringing in more income. This is why many millionaires invest in real estate. Not only does it make you money, but it allows you to keep a lot more of the money you make.

Some of the most successful entrepreneurs in the world have built their wealth through real estate. In fact, it's estimated that 90% of all millionaires invest in some form of real estate. There are several reasons for this, but in today's article, we'll share seven reasons why millionaires invest in real estate.

90% Of Millionaires Are Made In Real Estate - 100% Of Billionaires Are Made HERE. Investment Banking Vs Private Equity.

Long-term, rental income can contribute significantly to an investor's overall wealth, especially when rental rates increase with demand and inflation. Adding real estate to your investment portfolio can also help diversify your investments and manage risk.

The Ultra Wealthy Own Nearly 4 Homes on Average: How This Impacts the US Housing Market. Homes have become more expensive than ever since the onset of the COVID-19 pandemic. In fact, home prices are expected to increase in 2024, according to CNBC.

Key Takeaways

The first step is to earn enough money to cover your basic needs, with some left over for saving. To create a financial plan, consider your personal goals, which may include buying a home, saving for retirement, or putting your kids through college.

Relying on multiple sources of income can significantly accelerate wealth accumulation. Pursuing side businesses, freelance work, or passive income streams such as rental properties and dividend-paying stocks can supplement primary income.

To create future wealth, prioritize saving over spending by making it a habit. Savings bridge the gap between current financial well-being and future security, catering to emergencies and luxuries.

Higher returns: Commercial real estate is known to yield higher returns than residential real estate. If you can afford to manage a commercial space, it can prove lucrative over time, depending on your area.

Can you still get rich from real estate? ›

Real estate is one of the best investments you can make because you can earn double-digit returns with the right deal. Once you find the right deal, you'll have a superior asset compared to stocks and other alternative investments.

LA's rich scramble to sell homes to avoid new 'mansion tax'

Known as the “mansion tax,” Measure ULA was implemented in order to help fund affordable housing for LA's homeless populations. It's a measure Los Angelenos voted for in November 2022; its goal is to bring in $1 billion annually to fight LA's homeless problem.

The average IQ of self-made* millionaires is 118. The average IQ of self-made deca-millionaires (over $10M net worth) is 118. The average IQ of self-made* billionaires is 133. The average IQ of self-made deca-billionaires (over $10B net worth) is 151.

90% of millionaires made their money in Real Estate. I became a millionaire without owning a single property. But I own 6 small businesses that make me $725k/year.

Build Equity and Wealth

As you pay down a property mortgage, you build equity—an asset that's part of your net worth. And as you build equity, you have the leverage to buy more properties and increase cash flow and wealth even more.

Ninety-three percent of millionaires said they got their wealth because they worked hard, not because they had big salaries. Only 31% averaged $100,000 a year over the course of their career, and one-third never made six figures in any single working year of their career.

Why Real Estate Creates 90% of Millionaires. If you're looking to build wealth, real estate is a great way to do it. Real estate tends to increase in value over time, and while it's not a liquid investment (you can't just sell it at any time you like), it offers tax benefits and protection from inflation.