Inheritance money, how to invest it in Red Deer?

 𝐈𝐭'𝐬 𝐧𝐨𝐭 𝐮𝐧𝐡𝐞𝐚𝐫𝐝 𝐨𝐟 for people in this generation to inherit money. If that happens, how should you spend it?

In many of the cases, young people are ill-prepared for the inheritance they come into, so they end up losing it.

Sometime ago, we interacted with a couple different young people who had just inherited $40,000. In one scenario, someone persuaded them to lend all their money for an unproven investment with no guarantee of any return, they made a grave mistake and sadly lost all.

In another scenario, Bryce had a financial discussion with the other party whose interest at that time was buying a new car. Bryce explained that instead of buying a car that will just depreciate, they could buy a house with a basement suite and a garage and rent them out and the house would pay for the car but they replied, "it just doesn't work like that, Bryce"!

But you see, it does actually work like that!

About that same period, Cole and Bryce bought a house for $245,000 and put down $12,500 as down payment. Then they rented it out for $1200 up and $800 down and that's not even including the garage. Their rental income less payment worked out that they would have cash flow of $363 a month (net profit).

Over the seven years since then, they’ve paid down their mortgage from $232,500 to $155,200. They would have had some improvements here or there but they have also paid down an average of $1100 a month over those seven years.

So, Instead of buying a $10,000-$15,000 car that would be worth close to nothing in 7 years, they bought a house that has appreciated by $80,000 and they have paid $77,300 off their mortgage PLUS they get cash flow of $30,492 over those 7 years, which is more than enough to buy a car.

In summary...

By investing $12,500 in a house, they would've had a total gain of $187,792 in seven years, while investing $10,000 in a car they would have close to zero to show for it in seven years and would probably be needing another new car.

This just goes to show the value of financial education for our kids and that you don’t need a lot of money to get started.

Thanks so much for reading, feel free to leave a comment or like the post below.

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