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Ownership Level II: Real Estate

One of the great benefits of most Western economies is the long-held right to own property. Contrast this mostly-Western right with Egypt’s current situation: 92 percent of all Egyptian buildings and land are owned outside the legal property system (without recognized title deeds) and that 88 percent of businesses were in the same situation. Egyptians, then, are not benefiting financially from ownership of most of their land and businesses – a fact which has played havoc with their economy for decades.

Property title is the key to wealth creation. Look at the African continent as a whole. Very few African countries grant citizens property titles – instead, property remains in the hands of the state or corrupt leaders. The absence of legal property titles in African countries has stunted development and economic growth.

Legal ownership of property spearheads development and is the "staircase to social growth". Property ownership is the genesis of the market economy as it provides legal identity, basis for credit, and a real asset base.

That's been proven time and time again here in the U.S. I met a woman last week at a real estate seminar in Orlando named Dianne who got a sudden reality check when the corporate division where she worked as a computer programmer was sold to another company. "I knew then that I couldn't rely on large corporations for job security and financial stability and that I needed other ways to produce income and create wealth," recalled Dianne. She decided to "build my assets with real estate." She had already bought a town house in Tampa to live in, using $8,000 from her savings for the down payment. Next, through a program for first-time investors, she got 100-percent financing on the purchase of a two-bedroom condominium to rent out. Just recently she bought another rental condo near the Walt Disney Resort in Orlando, using $7,000 from her savings for the down payment. Like other investment-savvy property owners, Dianne knows that wealth comes from the accumulation of assets that increase in value. So many people don't understand the difference between income and wealth - they think a large salary means they're wealthy. But, of course, it doesn’t.

But with real estate, your home is your salary -- and it grows in value much faster and farther than your annual paycheck. As they say, land is so valuable because God ain't making any more of it.

Words to live -- and invest -- by.

Published Aug 25 2006, 07:17 PM by moneycoach
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