I read an article and within the article there that a sub article inside it. It was labeled the seven pillars to wealth building. They labeled the following as pillars. I would like to hear your thoughts on these items:

1) Capital Preservation

2) Cash Flow

3) Equity Growth

4) Tax Benefits

5) Inflation Hedge

6) Strategic leverage

7) Collaboration with experienced operators

What order would Ray put these in?

I am guessing here:

7 should be 1 Collaboration with experienced operators

6 should be 2 Strategic leverage

5 should be 3 Inflation Hedge

4 remains 4 Tax Benefits

2 should be 5 Cash Flow

3 should be 6 Equity Growth

Sounds like the main reasons to invest in rental real estate to me!

Assuming that the 7 features we are naming are the names of the main things a wealth-builder type person would be thinking about when making investment decisions at 7 various stages of an investing career, then I would agree with 6X6 except for the following:

Interesting list. I can definitely agree with some/all of those being good things, but they're more micro level vs. macro.

Here's another list by author John T. Reed.

1. Free Markets (minimal or no restrictions or taxes on transactions)

2. Sound Money (neither inflates nor deflates)

3. Rule of Law

4. Property Rights

5. Minimal Taxation

6. Minimal Regulation

7. Minimal creation of artificial uncertainty by the government

While all important, that last one is a big one right now. It seems that every time an administration switches, the first thing the new President does is topple the pillars / executive orders made from the last one. All well and good when you're on a positive trajectory, but what business is going to implement a 5-10 years investment plan in new growth and markets not knowing if the whole situation will change in a few years?

I remember a time when both major political parties agreed that strong American businesses were the way we all prosper. It seems now that the D party and their hard-core followers want to tear down all business via ever-higher corporate taxation and wealth redistribution.

I don't know about anyone else here, but the day I get a serious vibe that the Govt is going to start a wealth tax, I'm selling all my stuff and finding a place to hide the money. If they ask where it all went... "Viva Las Vegas, baby!"

Interesting, but this list looks like it came from one of those books or seminars.

In my experience I've learned a few things that would reorder the list and maybe a couple others that are not on the list.

One is that making a real pile of money is not that easy. In the course of your life most of us have the time and ability to get really good at MAYBE 3 things.

Another is that unless you are really good at something or really lucky your odds of making that pile of money are very small.

It doesn't really matter what you're really good at. I've found that there are multi millionaires at pretty much any occupation I could name. Now some occupations have a higher percentage of wealthy people and we likely know what these are: doctors, lawyers, bankers and so on but even in these occupations, only a few rise to the top. Hence the term the 1 percent.

Also, the very successful tend to be located more in certain areas like Silicon Valley for tech, New York for bankers, Washington for lawyers and so on. It's just the odds are more in your favor in some areas than in others.

So, on that list, I'd put cash flow as number one. Without it you're just working to pay for the house, the food and your health.

Then I'd put collaboration with experienced people because as you get bigger you need help, weather that help is employees or partners. You can only do so much alone.

After that it's a toss up with tax benefits at the bottom because you aren't paying a lot of tax if you're not making a lot of money.

So, to me, it's do what you're best at, then get some help for the rest and let your help do what they are best at and make something off of them.

1. Spend less than you make

2. Save money and invest

3. Buy only what you need

4. Buy things that make you money

5. Use other people’s money to magnify your investments

6. Be patient

I would think it would be foolish to invest all your money in the same way in the same niches. I had two houses side by side located just off the interstate. These properties although SFHs were my capital appreciation play. I needed to do the foot work to get the zoning changed, but once they were rezoned, their value went up 300%.

So niche doesn't always mean the same thing all the time.

Each of these pillars have their own merits.

You have a silent partner who is actively digging into your wallet.......the IRS. That small tax payment adds up when you consider the compounding effect.

People focus so much on buying at the right time in the market cycle so they leave cash non-invested so they lose 1% this year and another 2% next year and after 20 years, they are missing half their spending power.

Collaboration has its merits as you will not specialize in everything.

Cash flow is what landlords focus on, but getting rich on $200 month per property sure doesn't sound all that sexy to me. When I started out, $200 would have been a pipedream for cash flow. I would have been happy at $25 back in 1989.

No one likes losing money, but that typically means reducing risk. So how do you balance capital appreciation and risk? Richard may say nail the market with that special industry in it. I was in SoCal when the aerospace industry pulled out. When 40,000 homeowners get laid off in a matter of 18 months, that nailed market can and will crash. So it works both ways. Stability goes a long way with me know a days.

Where some folks will tell you to avoid debt, I would say that is incomplete advice. I would tell you avoid bad debt and to look at your spending habits. Spending to make money is acceptable. Spending to keep up with Jones doesn't make much sense unless they are also landlords buying cash flowing properties.

There is no number one. I own Oil and gas wells because I like avoiding taxes and I like monthly checks coming in. But with each and every investment there are some downsides to it.

Bonanza sounds like he knows what he is doing.

Page 419 in my book Build Real Estate Wealth (which is now available on the Mr. Landlord website:

• Figure out what your dreams really are.

• Get educated, and make a good plan.

• Don’t take advice from anyone you wouldn’t want to trade places with.

• Never give up

In addition, I hope you will accept this final advice:

Watch your environment—it produces your thoughts.

Watch your thoughts—they lead to your words.

Watch your words—they lead to your actions.

Watch your actions—they set your reputation.

Watch your reputation—it influences your limits.

Know your limits—they determine your destiny.

Envision your destiny—you will avoid negative environments

I don't know if I'd go as far as knowing what I am doing but I have learned a few things.

One of my biggest educational tips is - don't have a partner. If you have a partner, make sure you are the one with control of the checkbook. If you can't control the checkbook make sure you know what the heck they are doing ever single day.

The corollary to this is "No one is going to care more about your money than you are." Giving up control of your money via money managers, investment managers, venture capitalists, or whatever means they are making money off your laziness.

Piggybacking on what Joel said-- I would expect "goals" to be important, whether they can be considered a pillar or not. If you don't have the goals to fuel your drive, there's no reason to focus and get through the grind that it takes to succeed in a specific way. Likewise, if you don't have "goals", you won't know when to stop, take a step back, and enjoy what you have.

All of those pillars are fine and good and make sense, but it also depends on where you are in your life. None of us get out of here alive - and goals change depending on where you are in the life cycle.

Cash flow is our main goal so we can live without worry, even if we get sick, which has happened. Preservation of capital because we do want to pass it on. Reducing taxation because it's not always what you make, it's what you get to keep (And in general I'd rather write a check to Home Depot than the IRS.)

There are a hundred different lists of 7-10 items that different guru's claim as the key. I don't think any of them completely fill the bill.

Your list isn't bad, particularly the first 4 are common but there are others that are missing such as wisdom and knowledge, diligence, and integrity.

7-

Learning to keep your mouth shut,

staying focused on your goals,

all the while, keeping your ego and attitude at the curb,

knowing that wealth building never rests,

be prepared to pull the trigger on anything that makes ya

money, whether its buying or selling.

On collaboration: For me 1 + 1 has to be at least 4. Most proposals I get result in far less than that which is a no go, so I work alone. It's far easier to fire a bad contractor than get untangled from a bad partner. Most of my collaboration is information exchange which works fine.