April 25, 2007

Flip Houses | Dining Rooms

Building Wealth - House Flipping - Dining Room Improvements

To build wealth and retire early, I'm flipping houses. The next room that we worked on making over was the dining room. As you will see by the pictures, we don't use it as a dining room, but more of a sitting, or cigar, room, but I think it was designed to be a dining room.

Room Pre-Flip

The "before" condition of this room was pretty sad, to say the least. As you can see from the picture, it had a lot of promise, but was painted terribly. First, the bottom was kind of a poop brown that played very poorly with the color of the wood floors. Second, the painting in general was terrible. Whoever did the job was in a big hurry. They put only one coat of paint on and were not particularly careful with making sure there was complete coverage. As a result, looking down the wall you could clearly see two different colors on the wall. Finally, there was no shade over the window. With something that big facing the street, window coverings are a must.

There were some good aspects to the room that we wanted to make sure were promoted. First, obviously, was the wood floor. It was a soft wood, reddish brown in color, and in great shape. It was one of the things that originally drew us to the house. Second, the wood border put in around the middle was a nice touch. It cut the walls in half, creating the opportunity for two toned success. Third, the ceiling details made for an interesting look. We may not be able to do much with it, but it provides something interesting.

Room Post Flip

In the after you can see that we completely redid the room. We chose two tones of gray, and painted the trim white. We also ordered some custom window shades that are faux wood. Just a note on the faux wood - if you are going to go with white, don't pay the extra for real wood, because you can't tell the difference, and the faux wood won't fade. You can also see that the white makes the room just pop with energy. The wood stands out more, the trim stands out more, the room is brighter, and just looks better. We thought about doing an epoxy floor covering, but ruled it out.

If you haven't figured out the trick to flipping houses yet, it is obvious from these pictures. Just take something that is ugly and make it pretty. Realized that some people would rather pay for a great looking house than put one together. Do that, and building wealth by flipping houses is easy.

Stay tuned for more updates, as I take you through the updates to the rest of the house and continue to build wealth!

Building Wealth Personal Finance

April 9, 2007

Compound Interest.

Building Wealth - The Magic Math of Compound Interest

Ever wonder why some people are so adamant about saving money (including me)? Ever wonder why some people seem to always have money, particularly those in traditionally wealthy families, but you never do? Although not completely the answer, compound interest has a lot to do with building wealth and retiring early.

Compound interest is the concept of adding accumulated interest back to the principal, so that interest earned on interest from that moment on. Confused yet? Another way of explaining it is with an example. Say you put $1,000 dollars in a high-yield savings account (the only place it should be if it’s in a savings account) at 4% interest. Under traditional interest guidelines, you could expect to earn $40 in one year from the $1000 you invested in the savings account.

Using compound interest principles, however, that $40 becomes $1040.81 (assuming the interest is compounded daily – this number will be different depending on when the interest is added back into the principal). Wow, 81 cents isn’t much, you might be saying, but take that out ten years, and what would be $1400.00 is now $1491.79. You’ve now made $91.79 where you would have had only $400. $91 may still not be a lot to you, but you had to absolutely nothing to earn it. You were paid for your money!

Again, this may not seem like much, but as you add to your principal and it grows, the money can start to add up fast. Imagine the scenario where you have $10,000 or $100,000 in the bank. The interest can be substantial. As this grows, your wealth grows too. At some point, if you become wealthy enough, you can live just on the interest earned by your wealth (Imagine earning 4% interest on a billion dollars – that’s $40,000,000 or forty million dollars!).

So, it is important to, as you accumulate wealth, to get that wealth working for you, even while you are sleeping. Compound interest can do that for you.

Remember to get your money working for you so you don’t have to. Take advantage of the magic of compound interest, and you’ll be wealthy before you know it!

Building Our Empire