Does Your Net Worth Matter?

Permanent Wealth provides you time and choice

Your net worth is the sum of your assets minus your liabilities. It is your personal balance sheet. Net worth has been the de facto standard for understanding someone’s financial health for centuries.

But when it comes to understanding your true financial health, looking only at your net worth is a shortsighted approach.

Net worth does not take into account the nature of your assets, the income they produce (if any), or the quality of your liabilities – not all debt is bad.

Net worth can also provide a false sense of security when planning your financial future.

We have found, through thousands of hours working with real estate investors, that passive income and the time and choices it allows, is a far better measure of wealth than net worth.

When that passive income is from a stable and growing equity base, we call it Permanent Wealth.

Permanent Wealth is the cornerstone of the 37th Parallel Properties investment philosophy. It is a different concept than net worth and it is important to understand the difference.

It is not about the money. It’s about choice.

Money intrinsically has no value.

None.

It is simply the facilitator of two things that matter: Time and Choice.

Money, specifically passive income, is the greatest enabler of time and freedom.

When your passive income covers your monthly expenses, you have the freedom to do the things you want.

Volunteering at your church, starting a foundation, spending time with your children or grandchildren, traveling to wherever you want, whenever you want.

It is all much easier with passive income.

What investments give you Permanent Wealth?

Developing Permanent Wealth is about acquiring assets that increase your net worth steadily and consistently year after year. These assets should also provide stable and growing passive income every year.

Sounds good, right?

The only issue is that very few assets are able to offer the types of return – steadily increasing cash flow and consistent equity growth – that you need. The stock market is too volatile and offers very little in the way of cash benefit. As of January 2013, the stock market was pretty much where it was in March 2000. That’s nearly 13 years of no growth, with a tremendous amount of volatility.

Precious metals can provide appreciation and capital gain, but provide no current income. And they can be quite volatile.

In fact, there are several investment types that don’t work. CDs provide returns well below the rate of inflation. Oil and Gas are depleting assets, even though they sometimes provide good cash returns.

The best investment class is…

The only investment we have found that provides the best mix of safety, predictability, stable cash flow and equity growth is multifamily apartment projects.

Not all apartment investments are equal. You need the right market, the right sub-market, strong management and several other factors to be successful – a combination we have repeatedly provided for our investors and students.

A repeatable, scaleable investment business

Imagine having a business where you can acquire one to two 100+ unit multifamily projects to your portfolio every year. This scaleable, repeatable investment model would allow you to:

  • Increase your net worth by $250,000 or more every year.
  • Double your net worth and passive income every 4–5 years, even if you never purchase another project.
  • Live the life you want with the freedom made possible by passive income.
  • You will have achieved Permanent Wealth.
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