Now I love stocks, and I have a big chunk of my money in stocks, but I’ve been thinking about how I can use my stocks, which are not in my retirement account to help me buy real estate without eating up my capital.

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1. Let’s Take a Look at Stock Performance
– Let’s say you can make a solid 8% from stocks annually.
– My favorite and only investment is in the S&P 500
– So if I have 1M dollars invested into the S&P 500, I’ll be making about 80k annually

However, we don’t have to have that much money to make this game work
– But I’m using that number because it’s an easy number to follow
– But let’s lower it down to 100k
– And remember there are capital gains to worry about, that can be between 0-15 and 20%

2. How do I withdraw enough to continue to grow my stocks
– Well we use the 4% rule
– The idea is that if your stocks grow at 8% a year and you take out just 4%
– Your stocks continue to grow and you don’t run out of money
– Worst case scenario, it takes you about 33 years to run out of money ( which is a long time )

3. Using 4% to buy Property
– So if you have 100k and you take out 4%, that’s $4,000 dollars
– With stocks that can buy you $4,000 worth of stock
– But with real estate, you can put down 3.5% on a property and that 4,000 allow you the chance to control an asset worth 114k because of leverage.
So lets say you buy a duplex worth 100k
– With the money you make from the rent, you can cover your mortgage
– And live in one unit for free
– But imagine this

If you’re in the deal for $4,000
– And let’s say the property cash flows about $100 per month
– That’s $1,200 a year or a 40% return on your 4k invested.
– While in the market you would just be earning 8%

4. Will I be using this plan
– The answer is yes and no
– I will be taking money out to fund my real estate
– But I will not be taking money out to get into debt

For me personally:
– I would use the stock money to help me buy property and payoff property
– And I would only buy a property once the other one is paid off
– And the goal would be to buy in cash

Ps. Don’t do this with a retirement account, that has penalties, because you’ll be taking a big hit

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*Some of the links and other products that appear on this video are from companies in which Tommy Bryson will earn an affiliate commission or referral bonus. Tommy Bryson is part of an affiliate network and receives compensation for sending traffic to partner sites. The content in this video is accurate as of the posting date. Some of the offers mentioned may no longer be available. I’m an Accountant but I’m not your Accountant, always review information with your Accountant/CPA and your Financial Advisor.

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