$372 BILLION.

Andrew Carnegie was perhaps one of the richest people in American history. He was an industrialist known for starting and building a company called U.S. Steel, which he sold to the financier J.P. Morgan for $480 million in 1901.

Based on this sales figure, Carnegie’s net worth calculated in today’s dollars is approximately $372 billion, which is nearly double today’s richest person - Jeff Bezos, the founder of Amazon. 

Carnegie famously said “Ninety percent of all millionaires become so through owning real estate.”

It just makes sense. Take a look at most millionaires today and they will likely tell you that they own some form of property, and it is likely that his or her property produces cash - lots of it. 

Not only does investment property produce cash, but it also appreciates in value, assuming that you purchase at the right price and in the right market.

For example, say you buy a $1 million property. If you take a conservative gross rent figure of 10%, that means you will make $100,000 per year on income property. After mortgage, taxes, maintenance, and other costs, let’s just say you make $50,000 in profit.

Over time, as you continue to hold that property, your net worth certainly increases. 

Over the course of ten years of holding that property, as long as you run the property very well, you will likely see rents and property value increase. Your cash position will also increase, which allows you to buy even more properties and replicate the same success throughout the course of your life.

That $50,000 per year in rental income will certainly grow as you continue to buy more property and invest in more wealth-building assets. Just imagine the endless possibilities that will come from that income. 

I certainly believe this quote by Carnegie is still relevant today. Real estate seems to be the best way to create wealth. America’s richest man who built a REAL company would certainly agree today.

Comments

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