Which is more valuable? This is a tough question on the surface I always say that time is more valuable than money. The answer is simple I can make more money tomorrow, but I can not make another day. This goes for deals, charity work, basically anything.
For many of the begining investors this is a critical lesson to learn. Time is one of the most important factors in a deal. The longer you are in a deal the lower your ROI is on that deal. Lets look at a couple of examples
1) I buy a house for 100K I use 80K of the banks money and 20K of my own. I invest an additional 10K in the house and sell it for 130K in 6 months. This gives us a 20K profit. The ROI on this deal is about 133% on an annual percentage basis not bad.
2) I buy a house for 100K I use 80K of the banks money and 20K of my own. I invest no additional money in the house and flip it to another investor for 105K just a 5K profit and turn the house in 30 days. The ROI on this deal is 300% on an annual percentage basis
Which ROI would you rather have???? Always remember how important time is!!!
For many of the begining investors this is a critical lesson to learn. Time is one of the most important factors in a deal. The longer you are in a deal the lower your ROI is on that deal. Lets look at a couple of examples
1) I buy a house for 100K I use 80K of the banks money and 20K of my own. I invest an additional 10K in the house and sell it for 130K in 6 months. This gives us a 20K profit. The ROI on this deal is about 133% on an annual percentage basis not bad.
2) I buy a house for 100K I use 80K of the banks money and 20K of my own. I invest no additional money in the house and flip it to another investor for 105K just a 5K profit and turn the house in 30 days. The ROI on this deal is 300% on an annual percentage basis
Which ROI would you rather have???? Always remember how important time is!!!
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