Conclusion for How to Acquire a Multi-Million Dollar Investment Portfolio While Earning Just $5,000 Per Month

That was an exciting journey together, wasn't it? We started off talking about paychecks and personal expenses and how we modeled saving $160 per month. We talked about putting your savings in a checking account that earned nothing and investing in the stock market if you can get a steady 8% return per year. I think we determined that investing in the stock market is likely better. We looked at renting versus buying a house and what impact that has on your expenses and net worth. I think we determined that buying a house is better than renting. We examined a couple different little or nothing down loan options and saw the impact of that over time. I think, in terms of long-term results, they're close, but probably paying a little down payment is slightly better than nothing down, with the assumptions we made. Depending on the loan program though, I could see a nothing down loan holding its own against a little down loan. Then, I introduced a rental property into the mix. And, God saw that it was good. Well, maybe not exactly rental property but the Parable of the Talents appears twice which might mean it is somewhat important for you to step up and invest what you're given. At least I think we both saw that introducing rental property was good for net worth and cash flow. You met the Nomad investing strategy and the Nomad investing strategy liked you (a lot); it told me so. Maybe you liked it. I'm not sure. But, the Nomad strategy—even doing it just once to acquire a single rental property—was good for your wallet. We then got passionate about 20% down payment rentals. Wasn't that fun? Cash flow improved dramatically and we converted our cash that was invested in the stock market into equity in property. Since the Nomad strategy liked you so much, we revisited it and decided to make a deeper commitment to it. We did 10 properties with it instead of just 2 like we did before. Turns out that was super interesting and very profitable. And finally, we looked at breeding the Nomad model with your passion for 20% down payment rentals. That was even better for cash flow, but took a lot of cash out of the stock market and into real estate equity. In conclusion, I'll share with you some of the more common charts we've looked at for your reference.

Number of Houses Owned for Each Scenario

Account Balances for Each Scenario

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1% Down Full Nomad Saves $160/mo in Stocks Then Buys 20% Down Rentals

In the last two scenarios, we covered the full 10 property Nomad strategy. One with a nothing down loan to start, and one with a 1% down payment loan to start.

In this scenario, we will build on the 1% down payment scenario we just covered.

Everything is exactly the same as what we just covered in the previous scenario, except now, after we've purchased our last Nomad property with 5% down payment and moved into that property to live there, we will continue to save money and invest in the stock market. As soon as we have $5,000 in today's dollars in reserves plus enough for a 20% down payment rental property, we will buy another 20% down payment rental property.

We will buy as many 20% down payment rental properties as we can.

If you recall from the previous scenarios where we purchased as many 20% down payment rental properties as possible, we end up with more houses, but much lower cash account balances. That's because we're spending the cash on down payments and buying more properties with it.

Number of Houses

By purchasing as many 20% down payment rental properties as we can save a down payment for, we go from buying 10 total properties (9 rentals as an owner occupant property) in the previous Nomad scenarios to being able to buy 20 properties (19 rentals and 1 owner occupant property) in this scenario. You can see the difference in the chart below.

Account Balances

If we are spending the cash in our accounts on additional down payments, you'd expect the previous 1% down payment Nomad scenario to have a lot more cash invested in the stock market account. You can see in the comparison of the account balances in the chart below that you'd be right. Read More

1% Down Full Nomad Saves $160/mo in Stocks

In the last scenario we did a full Nomad strategy starting with buying the first house with nothing down. In this scenario, we will do a full Nomad strategy except the first property we buy will be with the special 1% down payment loan program we've discussed in previous scenarios.

Number of Houses Purchased

By using a 1% down payment loan, we are able to buy our next houses a little bit sooner than we could in the previous scenario. We still require at least a year between purchases even if we have enough down payment because that is a requirement of getting an owner occupant loan. The following is a chart that shows the number of houses we buy comparing this scenario to last scenario with nothing down on the first house and when we buy each.

In both scenarios, our first house purchase is in month 1. For this scenario with 1% down payment and in the last scenario with nothing down. But the second house purchase in this scenario moves from month 30 in the last scenario to month 34 in this scenario. The biggest gain is buying the next house; the third house moves up to month 85 from month 96. Subsequent purchases are still a few months faster as well.

Account Balances

The difference in our accumulation of money in our stock market account between the two scenarios is slight, but even small hinges swing big doors and, in our model, have significant consequences. Here's a chart comparing the account balances between the two scenarios for the first 10 years.

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