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E46 M3 (2001-2006)

View Poll Results: How high do you feel someone's salary should be before purchasing a new 05/06 M3?
0 - 50K 21 5.63%
50K - 65K 28 7.51%
65k - 80K 50 13.40%
80K - 100K 96 25.74%
100K - 120K 71 19.03%
120K and up 107 28.69%
Voters: 373. You may not vote on this poll

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  #101  
Old 04-13-2006, 02:18 PM
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JonathanIT JonathanIT is offline
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Quote:
Originally Posted by wheel-man
In all honesty, too safely afford a car and not live for it, unless you've saved extensively over the years, the new vehicle should not be more than 1/8 of your yearly income.
So if you make $100K a year, the most you can afford is a brand new Toyota Yaris?



--J.
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  #102  
Old 04-13-2006, 05:55 PM
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Originally Posted by kaweahnet
I'm glad I heard the word happiness. That's what it should all be about. Heck, we could all get runover by a Ford tomorrow ... so if owning a BMW today is what is going to make you happy ... why not? I just caution in trying to find happiness in material posessions. On the other hand, I'm smilin' pretty big when I'm behind the wheel of my machine.

My point is that it sure would be a shame to sacrifice and sacrifice to prepare for tomorrow, and then never get a chance to enjoy life.
I agree. Generally speaking, finding happiness in material possesions is an illusion. However if you really appreciate the BMW and that makes you happy then there's nothing wrong with that, and that in it of itself isn't materalistic, IMO.
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  #103  
Old 04-13-2006, 07:09 PM
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Originally Posted by Moderato
Did those type 44's work out for you?
They have yet to be used... but they have R-comps mounted on them and they're ready to go.

Autocross season is here, but I'm starting out the season on street tires. I'll probably use them the first time about one month from now. I keep looking at them in the garage saying, "damn, I have to try these so I can let Moderato know how it worked out." Thanks again BTW.
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  #104  
Old 04-13-2006, 07:42 PM
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Quote:
Originally Posted by JonathanIT
So if you make $100K a year, the most you can afford is a brand new Toyota Yaris?



--J.
technically yes. if you are paying for a mortgage, wanting to invest for retirement, etc then yes.
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  #105  
Old 04-13-2006, 11:39 PM
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1/8 rule

Quote:
Originally Posted by wheel-man
technically yes. if you are paying for a mortgage, wanting to invest for retirement, etc then yes.
It's been a sliding scale for me...3/4 when I was a young buck, 1/2 when I bought my first house, 1/4 as I got older.

I suppose I'll know that I've done good when I get to 1/8 and I'm driving an AMV8 Vantage.
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  #106  
Old 04-14-2006, 06:28 AM
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Originally Posted by rumratt
They have yet to be used... but they have R-comps mounted on them and they're ready to go.

Autocross season is here, but I'm starting out the season on street tires. I'll probably use them the first time about one month from now. I keep looking at them in the garage saying, "damn, I have to try these so I can let Moderato know how it worked out." Thanks again BTW.
Good luck at AutoX!
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  #107  
Old 04-18-2006, 07:42 PM
DMD DMD is offline
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Quote:
Originally Posted by 650iOzBoy
Exactly my point. People want different things and hence places different valuation on things (or "utility" as those economists call it). For Ventoux, having a solid retirement is important to him/her.

As for me, this is one case in life where I do not do what I preach. I can afford the 650i without undue compromising. I'm grateful for that.
I bought an M3 but I am doing a residency and making only $42K a year...but next year I will be making 100K+ So I don't think it be a horrible choice but i am also living in Iowa where housing is dirt cheap and I am singe and 25. I feel comfortable with the payments, even though it is a 1/3rd of my salary each month for this year....I feel if I got in over my head I can always sell the car...is this thinking flawed?
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  #108  
Old 04-18-2006, 08:06 PM
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Quote:
Originally Posted by DMD
I bought an M3 but I am doing a residency and making only $42K a year...but next year I will be making 100K+ So I don't think it be a horrible choice but i am also living in Iowa where housing is dirt cheap and I am singe and 25. I feel comfortable with the payments, even though it is a 1/3rd of my salary each month for this year....I feel if I got in over my head I can always sell the car...is this thinking flawed?
I don't think that is flawed thinking at all. And best of all, while you're busting your arse doing your residency you at least have satisfaction in getting behind the wheel of the hottest sport sedan in the world afterwards. Even if it may only be for a 5 minute commute home.
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  #109  
Old 04-18-2006, 08:12 PM
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lets see.
Congrats on your accomplishments btw.

My thinking.. Before i max out my 401k for the year. Im bringing home approximately 45% of my Gross. thats it. After i max out my 401k for the year, i bring home closer to 60%, but I still try and make over 15% in investment during those months. Actually i try to invest more than 20%.

So lets just say you bring home 55% of 100k. Thats around $4600 month. I suppose thats do-able depending on your lifestyle. For me, i like to live in a decent place, go out with my girlfriend to nice places, go on vacations, and also, most importantly; be retired at 55. I would hate to be 70 and driving my e46 to my WalMart greeters job!!!

bottom line, no one can make the decision but you. But in the big scheme of things, its just a car. and, cars come last in my book. that being said, im just wating for the right time to get one for myself.
Quote:
Originally Posted by DMD
I bought an M3 but I am doing a residency and making only $42K a year...but next year I will be making 100K+ So I don't think it be a horrible choice but i am also living in Iowa where housing is dirt cheap and I am singe and 25. I feel comfortable with the payments, even though it is a 1/3rd of my salary each month for this year....I feel if I got in over my head I can always sell the car...is this thinking flawed?

Last edited by Ventoux; 04-18-2006 at 08:36 PM.
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  #110  
Old 04-18-2006, 08:31 PM
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Quote:
Originally Posted by Ventoux
Yes.
It might be, but I am young only once...what am I going to do when I am 60 and have a M3....Who cares if I have $100K less in my retirement since I blew my salary on a car when I was 25....what am I going to do when I am 70 with that extra 100K, I guess I could buy my 60 year old wife some new ****....No offense to older people...
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  #111  
Old 04-18-2006, 08:37 PM
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chuck92103 chuck92103 is offline
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Quote:
Originally Posted by DMD
It might be, but I am young only once...what am I going to do when I am 60 and have a M3....Who cares if I have $100K less in my retirement since I blew my salary on a car when I was 25....what am I going to do when I am 70 with that extra 100K, I guess I could buy my 60 year old wife some new ****....No offense to older people...
At your age, every $50k spent on a new car, is $500-$700k lost in retirement dollars. The fact that you think $43k only yields $100k in 40 years troubles me.

I would fully fund my retirement at 15% or more pretax 401k, IRA, etc. before buying expensive cars. IMHO
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  #112  
Old 04-18-2006, 08:38 PM
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Quote:
Originally Posted by chuck92103
At your age, every $50k spent on a new car, is $500-$700k lost in retirement dollars. The fact that you think $43k only yields $100k in 40 years troubles me.

I would fully fund my retirement at 15% or more pretax 401k, IRA, etc. before buying expensive cars. IMHO
thanks for pointing that out to the young doctor.

btw, im only 38, i dont consider myself old.
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  #113  
Old 04-18-2006, 08:40 PM
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sorry, i was editing my post when you replied. wanted to expound a bit after i gave it some thought.
Quote:
Originally Posted by DMD
It might be, but I am young only once...what am I going to do when I am 60 and have a M3....Who cares if I have $100K less in my retirement since I blew my salary on a car when I was 25....what am I going to do when I am 70 with that extra 100K, I guess I could buy my 60 year old wife some new ****....No offense to older people...
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  #114  
Old 04-18-2006, 08:41 PM
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Quote:
Originally Posted by chuck92103
At your age, every $50k spent on a new car, is $500-$700k lost in retirement dollars. The fact that you think $43k only yields $100k in 40 years troubles me.

I would fully fund my retirement at 15% or more pretax 401k, IRA, etc. before buying expensive cars. IMHO
No doubt what you are saying is correct. But honestly, what is the use if you don't live until retirement? I'm all about living for today, and investing in things that have an immediate return like real estate. Then your M3 can be a business deduction.
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  #115  
Old 04-18-2006, 08:46 PM
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Quote:
Originally Posted by kaweahnet
No doubt what you are saying is correct. But honestly, what is the use if you don't live until retirement? I'm all about living for today, and investing in things that have an immediate return like real estate. Then your M3 can be a business deduction.
Here is the difference. I was in my 30's before buying my first bimmer. I owned my home, and had my retirement fully funded along with other investments.

When I bought the new 1997 M3, I wrote a check. I have not had a car payment since I was in my 20's, and that was for a Toyota Corrolla. I am 43 now. If you plan right, smart investments can give you financial freedom, but you have to make the effort up front not later on in life.

An M3 for a business deduction is a stretch and no accountant worth their salt would let that slip by on a tax return.
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  #116  
Old 04-18-2006, 08:51 PM
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There is something said for living for today, but it should be done responsibly. What if you live till your 90? have you looked at that? i might have posted this earlier in the thread, but its really a neat tool. Fun to play with different scenarios.

http://moneycentral.msn.com/retire/planner.aspx

Quote:
Originally Posted by kaweahnet
No doubt what you are saying is correct. But honestly, what is the use if you don't live until retirement? I'm all about living for today, and investing in things that have an immediate return like real estate. Then your M3 can be a business deduction.
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  #117  
Old 04-18-2006, 08:56 PM
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Quote:
Originally Posted by chuck92103
At your age, every $50k spent on a new car, is $500-$700k lost in retirement dollars. The fact that you think $43k only yields $100k in 40 years troubles me.

I would fully fund my retirement at 15% or more pretax 401k, IRA, etc. before buying expensive cars. IMHO
I might not be a finance major but if you look at retirment figures they are all based on the last 20 year or 30 years % return in the stock market (which included the dot.com boom)....but an investment today of 50K is probably not going to see that kind of return...You can contribure 42K to a ROTH IRA in a year, a 401K is not really an option for me, real-estate is an option...I am not saying I am not going to invest, but I will simply start when I am 28 as opposed to 26....
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  #118  
Old 04-18-2006, 09:08 PM
Ventoux Ventoux is offline
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lats say you make 50k a year,and contribute 10% a year, 2 years of investing can mean $200,000 at retirement. just keep that in mind...compound interest is your friend
Quote:
Originally Posted by DMD
I might not be a finance major but if you look at retirment figures they are all based on the last 20 year or 30 years % return in the stock market (which included the dot.com boom)....but an investment today of 50K is probably not going to see that kind of return...You can contribure 42K to a ROTH IRA in a year, a 401K is not really an option for me, real-estate is an option...I am not saying I am not going to invest, but I will simply start when I am 28 as opposed to 26....

Last edited by Ventoux; 04-18-2006 at 09:11 PM.
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  #119  
Old 04-18-2006, 09:11 PM
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Quote:
Originally Posted by DMD
I might not be a finance major but if you look at retirment figures they are all based on the last 20 year or 30 years % return in the stock market (which included the dot.com boom)....but an investment today of 50K is probably not going to see that kind of return...You can contribure 42K to a ROTH IRA in a year, a 401K is not really an option for me, real-estate is an option...I am not saying I am not going to invest, but I will simply start when I am 28 as opposed to 26....
The money for the M3 isn't the problem, what the problem is you mentioned you're single and that means the financial bliss you're experiencing right now won't last forever. Just wait, you won't believe how expensive a wife & two kids can get. Sure your wife might have a career but that doesn't mean she's going to spend that money on things you want.
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  #120  
Old 04-18-2006, 09:24 PM
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Quote:
Originally Posted by Ventoux
lats say you make 50k a year,and contribute 10% a year, 2 years of investing can mean $200,000 at retirement. just keep that in mind...compound interest is your friend
The problem is inflation my friend. That $200k isn't really $200k at retirement. If you want to avoid inflation ... check out this:

Take that $50k and put it down on a $250k rental home that generates $1000/mo in rental income. Finance the $200k on an Interest only 5/1 ARM which will cost your about $800/mo. Take the $200/mo you're making in monthly income and put it away to pay property taxes and insurance. Best of all, at tax time you can write off paper losses of up to $25k against your regular income which will greatly reduce your taxable base and you'll get a huge return. Many real estate deals actually will show a loss, but after your tax benefit it turns out t be positive. YES, that means you will have an influx of cash (+ cash flow) and the best part is that the house is increasing in value faster than the rate of inflation.

Effectively, in 5 years, your home is probably going to be worth about $350k (concervative by today's standards). You just made $100k off of a $50k investment in a period of 5 years (assuming you sell it). AND there are tax shelters to allow you to move these into other investments. On top of that if you get licensed as a real estate agent and sell a few home each year you can darn sure write off every single penny of that M3, and every accountant worth his salt BETTER support you on that deduction.

It's all about being creative. But, for God's sake, stay away from small gain investments ... because they don't keep up with inflation.
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  #121  
Old 04-18-2006, 09:43 PM
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Quote:
Originally Posted by kaweahnet
The problem is inflation my friend. That $200k isn't really $200k at retirement. If you want to avoid inflation ... check out this:

Take that $50k and put it down on a $250k rental home that generates $1000/mo in rental income. Finance the $200k on an Interest only 5/1 ARM which will cost your about $800/mo. Take the $200/mo you're making in monthly income and put it away to pay property taxes and insurance. Best of all, at tax time you can write off paper losses of up to $25k against your regular income which will greatly reduce your taxable base and you'll get a huge return. Many real estate deals actually will show a loss, but after your tax benefit it turns out t be positive. YES, that means you will have an influx of cash (+ cash flow) and the best part is that the house is increasing in value faster than the rate of inflation.

Effectively, in 5 years, your home is probably going to be worth about $350k (concervative by today's standards). You just made $100k off of a $50k investment in a period of 5 years (assuming you sell it). AND there are tax shelters to allow you to move these into other investments. On top of that if you get licensed as a real estate agent and sell a few home each year you can darn sure write off every single penny of that M3, and every accountant worth his salt BETTER support you on that deduction.

It's all about being creative. But, for God's sake, stay away from small gain investments ... because they don't keep up with inflation.
What about the cost of maintaining the home and fixing problems & damages? What about the months were you don't have the house rented and need to pay that bill out of pocket? What about when your tennants don't come up with the rent money? Laws make it hard to kick people out. It's not as easy as you make it sound, IMO.
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  #122  
Old 04-18-2006, 09:51 PM
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Quote:
Originally Posted by Moderato
What about the cost of maintaining the home and fixing problems & damages? What about the months were you don't have the house rented and need to pay that bill out of pocket? What about when your tennants don't come up with the rent money? Laws make it hard to kick people out. It's not as easy as you make it sound, IMO.
That is why you have to keep your day job....this is an investment...I like the real-estate idea...Is their earning limits on the ROTH IRA...also what company do you guys use to invest with? Is Fidelity Investment any good? You guys seem well versed in the retirement arena..
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  #123  
Old 04-18-2006, 10:24 PM
Laszlo Laszlo is offline
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I can't stand 401k conversations. Reality check
people. Sure, it is nice to know that when you are
sixty, or even sixty-five, that your 401k nest egg is
going to be worth a whopping $1.5 or less for
others.

Well when you take that fat egg out in 2036, you get
taxed accordingly on that $1.5 million. I wonder if
taxes will be more or less in the year 2036? I will bet
that they will be higher. So, it is 2036 and you have just
got taxed on your $1.5 million, so not let us assume
you have around 700k. Not bad! Or is this a delusion
of grander?

Did you ever consider future inflation adjustments
into the entire 401k scheme? No, because you were too
busy looking at those happy elders on the cover of the
401k brochure who are millionaires. And you are going
to do the same. But you forget about the tax on that
$1.5 millions, so you really have 700k. Not such a
millionaire after all.

Now, 700k still sounds like a lot of money, because
today, you can buy a 1000 square foot salt-box house
in shoddy Sacramento (on the other side of the tracks)
with leaky pipes and broken toilet. And a loaf of
bread is only $2.99 and a gallon of gas is $3.10 a
gallon.

Okay, back into the time machine and it is now 2036. And
you have that 700K. And that 700k home in shoddy
Sacramento on the other side of the tracks (still has
that damn broken toilet and leaky pipes), is now worth
a huge and outrageous amount of 1.8 million! Wow!

But a loaf of bread is $9.50, a gallon of gas (if you
can still get some) is $15.90 a gallon, and a
round-trip plane ticket from San Francisco to New York
is $2,100.00 (and that is on JetBlue) and a pack of
smokes is $13.99 -- you started smoking because you
thought you were going to be a millionaire living the
high-life at ripe old 60 or 65, but in fact, you are
basically forced into a 30 foot trailer in New
Orleans, on the other side of the tracks, and you are
eating hotdogs for dinner until you teeth fall out.

I am 35. And I remember 25 years ago, when I was 10, a
candybar was 25 cents. It is now over $1.00.

Last edited by Laszlo; 04-19-2006 at 12:26 PM.
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  #124  
Old 04-19-2006, 07:49 AM
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Quote:
Originally Posted by Laszlo
I can't stand 401k conversations. Reality check people. Sure, it's nice to know that when you're sixty, or even sixty-five, that your 401k nest egg is going to be worth a whopping $1.5 million…. or less for others.

Well…. when you take that fat egg out in 2036, you get taxed accordingly on that $1.5 million. I wonder if taxes will be more or less in the year 2036? I'll bet that they'll be higher. So, it's 2036 and you've just got taxed on your $1.5 million, so let's assume now you have around 700k. Not bad! Or is this a delusion of grander?

Did you ever consider future inflation adjustments into the entire 401k scheme? No, because you were too busy looking at those happy elders on the cover of the 401k brochure who are millionaires. And you're going to do the same. But you forget about the tax on that $1.5 millions, so you really have 700k. Not such a millionaire after all.

Now, 700k still sounds like a lot of money, because today, you can buy a 1000 square foot salt-box house in shoddy Sacramento (on the other side of the tracks) with leaky pipes and broken toilet. And a loaf of bread is only $2.99 and a gallon of gas is $3.10 a gallon.

Okay, back into the time machine – it's now 2036. And you've got that 700K. And that 700k home in shoddy Sacramento on the other side of the tracks (still has that damn broken toilet and leaky pipes), is now worth a huge and outrageous amount of 1.8 million! Wow!

But a loaf of bread is $9.50, a gallon of gas (if you can still get some) is $15.90 a gallon, and a round-trip plane ticket from San Francisco to New York is $2,100.00 (and that's on JetBlue) and a pack of smokes is $13.99 -- you started smoking because you thought you were going to be a millionaire living the high-life at ripe old 60 or 65, but in fact, you're basically forced into a 30 foot trailer in New Orleans, on the other side of the tracks, and you're eating hotdogs for dinner until you teeth fall out.

I'm 35. And I remember 25 years ago, when I was 10, a candybar was 25 cents. It is now over $1.00.

What is your retirement plan?
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  #125  
Old 04-19-2006, 08:56 AM
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Quote:
Originally Posted by Moderato
What about the cost of maintaining the home and fixing problems & damages? What about the months were you don't have the house rented and need to pay that bill out of pocket? What about when your tennants don't come up with the rent money? Laws make it hard to kick people out. It's not as easy as you make it sound, IMO.
Nothing is perfect, and at times my rental properties and their tenants can be frustrating. However, as stated earlier, if you keep your day job then the occasional $1k-$2k per year will be tolerable. But even then ... you usually make up for it at tax time. Keep in mind ... this is ONLY cashflow we're talking here. If you shop well, research markets and buy at the right time I can almost guarantee over a 5 year period you will show a positive cash flow (all things considered such as poor renters, repairs and taxes). It may not be much, but cashflow is something you don't even talk about with 401k or IRA's.

Even, if you really screw up your buying decision and renters are in and out ... you still have the appreciation of the property. Don't get me wrong, I've seen people screw up real estate by not researching markets. But that is because they didn't do their due dilligence. It's not free money by any means, and it takes more work than throwing it in your 401k ... but it is much more lucrative. The best part is, if you start real estate investing today, in about 5-10 years you will be receiving good cash flow off of your properties and have a nice nest egg for the future. But, as I stated earlier, it does take work.

IMHO ...
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