Creating Capital

How Investors Keep Investing

Have you ever wondered how investors are always Creating Capital whenever they are ready to make their next purchase? Well I'm revealing a secret that most people don't even realize is right under their nose.

When you are in the beginning stages of your investment career, let's face it, investment capital can be spent very quickly or hard to come by at all. So what should you do to keep Creating Capital and not run out of money and be able to keep investing?

Whenever you make any "pure profit" from your investments, you should immediately put that money into your Wealth Fund Account (see Savings Plan section) and then don't touch it for ANY reason!

This is critical to your success! Creating capital is dependent upon you reinvesting your proceeds. It is the quickest way to make your next purchase. This concept is easily illustrated. Let's say your initial start up capital allows you to purchase two homes that generate $300 a month in positive cash flow. Let's also say that in order to buy another home of this type, you will need $6000 for the purchase. Your reinvesting program looks like this:

Month 1: $600 cash flow deposited into your Wealth Account (WA)

Month 2: $600 cash flow deposited + $ 600 in savings = $1200 in WA

Month 3: $600 cash flow deposited + $1200 in savings = $1800 in WA

Month 4: $600 cash flow deposited + $1800 in savings = $2400 in WA

Month 5: $600 cash flow deposited + $2400 in savings = $3000 in WA

Month 6: $600 cash flow deposited + $3000 in savings = $3600 in WA

Month 7: $600 cash flow deposited + $3600 in savings = $4200 in WA

Month 8: $600 cash flow deposited + $4200 in savings = $4800 in WA

Month 9: $600 cash flow deposited + $4800 in savings = $5200 in WA

Month 10: $600 cash flow deposited + $5200 in savings = $5800 in WA

Month 11: $600 cash flow deposited + $5800 in savings = $6200 in WA

In 11 months you have managed to save enough money to make your next investment all by using the profit from your existing investments! And it gets more exciting as time goes on. With your next purchase, now you're depositing $900 monthly into your Wealth Fund. It will only take you seven months to save for your next purchase. And so on, and so on.

The point of this demonstration is to illustrate the importance of not using your cash flow for day to day living expenses, for frivolous lifestyle purchases, or to pay off debt (yes, you heard me correctly - see Debt Tips Section). Instead, by constantly reinvesting it, you will be able to buy more property in a shorter time without having to cut into your lifestyle.

Another way to create capital is by flipping property. What you do with this strategy is buy a house for 20-40% under market that needs improvements, close on the house and quickly make the improvements, and then relist the property to sell for a profit. What profit will be determined by the price originally paid for the house, market conditions, what you sell the house for, and the amount of money spent on improvements, but most investors can make a minimum of $10,000 a flip, some a whole lot more!

Flipping can tie your money up for a while, and also has inherent risk because there are no guarantees you will sell your property for what you need to make a profit, but with the proper research, team, and timing, this is a great way of creating capital.

So now you have it - the secrets of successful investors. This one tactic will make you wealthy in a very short period of time!