Friday, April 30, 2010

Expand Your Income and Boost Your Bottomline with Digital Assets and Virtual Real Estate Part 1

Many of us have heard the insights of Robert Kiyosaki on the value of assets and real estate. I've heard Mr. Kiyosaki talk about real estate and assets on TV. Plus I've read some of his books.

I like Robert's take on assets and real estate. Kiyosaki contrasts a job and an asset.

A job he claims is a place you go to - to work to make money. While on the flip side an asset is something that works for you to make you money.

Kiyosaki, has said something controversial on television I'm sure many of you have heard. He claims that if you own a home which isn't making income your home really isn't your asset. You home is an asset of the Bank!!!

He of course then makes the case for owning commercial real estate. Robert feels this is how you really gain assets in real estate. Owning commercial real estate is an asset according to Kiyosaki if it is being run profitably with tenants.

We all know how Donald Trump became a Billionaire with commercial real estate. Commercial real estate even on a smaller scale can be lucrative. For instance if you buy a $400,000 two family house (not likely in LA or NYC but possible in some places) and your mortgage is $1,500 a month you could get a tenant and pay you rent of maybe $1,500. In this scenario the tenant's rent is to covering the basic overhead of the mortgage.

Plus in 20 years the value of the home may go up to $650,000 - $800,000. So you made quite a windfall business decision to buy the commercial property. The tenant/tenants pay most of your mortgage and you get a windfall sale down the line. This is why real estate is one of the first and foremost investments a person should make. I would like to make the case that for smart and visionary people in the future virtual real estate will be almost as lucrative.

Why you may ask? How can websites, CDs, online applications and ebooks have any value close to what real estate can offer most of us? Well think about how intangible digital assets can be worth as much or more than real estate. Look at the site we're using now Facebook. It's worth 11 Billion dollars and is essentially a web application. Google is worth 30 Billion. Some people argue that Google's brand alone is worth 100 Billion dollars!

Now on the other end of the spectrum lets look at the owner of the 2 family home I alluded to earlier in our illustration. They have a tenant paying them 1,500 dollars a month which is covering their mortgage. Now let me tell you I'm not even any where near the most successful person in virtual real estate and my websites bring me $1,500 or more in passive advertising and ebook sales.

And guess what? I don't have to deal with tenants or their drama, high property taxes, or mow the freakin lawn (I already do that at home).

In fact, when I was too ill to work my passive income from my virtual real estate keep food on the table, paid my living expenses, and paid my medical costs. In short virtual real estate and digital assets have been a very good investment.

In part 2 of this note I'll go into what exactly is virtual real estate and digital assets in their various forms and how they can help smart savvy professional like you put cash in your pocket.

Until next time be happy and stay blessed,

Kamau Austin K@...

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