Earlier this week I had a meeting with one of the local startups that I am mentoring. Over the last year his company’s bank account has been reaping the rewards of their hard work and so he has been considering his best option to invest the returns from his compounding successes.
Knowing that I am an active real estate investor he wanted to learn about how real estate makes money. He had performed a number of cashflow analyses, but, was failing to find lucrative returns. I could sense his frustration mounting in each additional word that he was saying. “The best cashflow I’ve been able to find is approximately 8% on a real estate investment and that’s just… well average”. He frowned. I smiled and excitedly said “That’s fantastic, you should put in an offer, do your due diligence and buy this property if everything checks out.”
Several times a month I’m asked by individuals for advice on buying a house in Ottawa, Ontario or Gatineau, Quebec. While I will refrain from commenting on the personal elements (e.g. politics, etc.) as they are subjective, I’ve put together a financial analysis for those who wish to consider.
In conclusion, unless an individual earns more than $150,000 / year, from a financial perspective, it’s still significantly financially beneficial to live in Gatineau, Quebec vs. Ottawa, Ontario.
Here’s the facts. For this assessment we’ll use the salary of $75,000… (reference for calculations: http://bit.ly/RLVw04)
Although people often confuse the two, financial freedom isn’t the same as being rich. One individual could be completely financially free earning just $20,000 annually, while another could be trapped even with millions of dollars of annual income.
So then, what is financial freedom? Financial freedom is a state of mind achieved within an individual by no longer needing to worry about money. Money is no longer the dominating force behind the personal or professional decisions within an individuals’ life.
Why is financial freedom more important than wealth?
While many individuals can consume a limited amount of food, once they’ve reached their limits, individuals will discontinue eating and their thoughts will no longer be occupied with eating.
Last night, my business partner Reid and I attended the Ontario Real Estate Investors Organization (OREIO) monthly event at the Travelodge Hotel on Carling in Ottawa. This month I was very excited, because this month the presenter was one of my mentors and educators and the catalyst which brought me out of the phase that many investors get into known as “analysis paralysis”. The presenter was none other than Don Campbell himself!
For those of you who don’t know Don Campbell, he is one of Canada’s most experienced real estate investors. He wasn’t born into riches, didn’t have a silver spoon, he started when he was working at a customer service desk at Sears and worked his way to where he is today, one accomplishment at a time. It wasn’t an easy ride, there’s no such thing as easy money, but he worked through the challenges as he faced them and any real estate investor can save themselves thousands or even millions in mistakes learning from his experience. He is a realist at heart, and isn’t afraid to share both the successes and challenges he’s been through.
Last night, my business partner Reid and I attended the Ontario Real Estate Investors Organization (OREIO) monthly event at the Travelodge Hotel on Carling in Ottawa. While we’ve been to events in the past, we hadn’t been to one recently. This evening’s presentation took on a slightly different format, leveraging a panel of experts in different fields and it made for both a very interesting and informative evening.