Why Real Estate Investing Works – The Truth

TruthSomeone once told me that success is a function of the images in your rear view mirror – I agree!  The problem I am noticing more and more is that a lot of people never take the time to look back, and a lot of those who do, struggle to interpret what they see.  Life is full of dichotomies and few things are as they seem. Real Estate is no different! Due to what it is, Real Estate is the foundation of the American and international economy and not too many things are as they seem.

I am of the opinion that if we are going to involve ourselves with real estate investing, it pays to understand precisely why things work the way that they do. Frankly – most people do not… This article is for those of you who enjoy thinking, once in a while.

Not too often, naturally, as we all know that thinking too much is bad for our health. However, most realize that the act of thinking once in a while is good for our business, so here we go – let’s start at the beginning:

What is Money?

There are countless ways to describe the concept of money, but I think that we can all agree that in our society at its’ core money is just a medium of exchange.

In the early monetary systems, the value of money, which is to say value of “stuff” that one unit of money buys, was underpinned by tangible “things”. Most of you likely immediately assume those “tangible things” are precious metals.

However, many of the books that I read to my children tell stories of value delivered through heads of heard, Persian rugs, and even salt, which believe it or not was very rare and therefore valued in certain cultures at certain times.

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