Let's be Financially Educated

You get a job
You buy a brand new GTI

Your paying R10044. 00 excluding insurance.
Then you get a bond proper house R10000. 00 pm.

Your net salary is R40k

I get a job my net salary is R25k
I qualify for a R600k bond.
I take the bond and buy 10 rental apartments in the Township

My bond will be R6000 monthly in twenty years.
I then decide to add extra R6000 to my bond every month.
My payment is now R12000 monthly for 5 years. Five years I'll be done with the bond because I'm putting R6000 axtra every month.
I then use my rental income for the first year to purchase a R70k second hand car cash.

After 5 years I will own a paid up rental apartment worth R700k and a car worth R35k
My total ROI if rental units are R1500 a room would be R15k monthly.
So in five years I would of made R900k from rental income.
So I then decide to sell all my assets.
Let's calculate the ROI:
Rental income R900k
Proceeds from Sales R700k +R35k
Bond - R720000, 00
Other expenses maintaince etc - R80000
Net income in five years R835000.00 in my pocket from using the banks money

You in five years your GTI is paid up.
The value is R290k
Your house that you bought for R1 million
The value is R1.5 million but the amount your still owing the bank is R1. 58million

Your ROI.
Proceeds from Sales R290k from the car only
Minus car installments R723000
Minus bond repayments R600k

Your net loss for five years will be an estimated R1 million plus.

See the difference I made R823 in five years you lost R1 million plus.

Yet society still believes someone with one income stream and a luxurious car is financially stable.

This is just an example the calculation may not be accurate.

But notice one thing a house that is not paid up and doesn't generate an income will always be a liability. It's not something you'd want to live your children behind with because the bank will rip them off.

2. The car is always a depreciating liability it's a symbol of success to only the poor.

Never the less let's be financially educated.

bluerichesmining #Breakingfree #Sakhile