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Book Review: Generational Wealth

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generational wealth

Generational Wealth: Business & Investing Guide to Building an Empire

This is a great investor guide by LaFoy Orlando Thomas III, Esq. The book goes over LaFoy’s investment philosophy which is very similar to my own and I think it was a great read.

Real Estate Investing

Real estate investing is one of the keys to generating wealth and the author went over how an investor can start down this path. He gives an example of Michelle, an investor, who purchased a home, then rented it out after a few years and kept acquiring more properties. Eventually, Michelle was able to leverage her education (MBA) and rental properties into a hotel and more. This section also covers other real estate investing benefits such as 1031 exchange, depreciation, and the various types of mortgages. It was a great overview on how to start investing in real estate.

Stocks and Bond

LaFoy believes stocks and bonds should be a part of any investor’s portfolio, but not the main course. In this section he explains the various stocks basics such as the different classifications, mutual funds, and stock options. This section is good for beginner stock investors who need to learn about the stock market in general. Many investors including myself started investing with stocks and bonds first. This was a great way to begin investing, but I generally agree with the book and think real estate investing should be a large part of your portfolio.

Business

The last sections of the book cover various business entities, business plan, and how to run a successful business. This part was very useful to me because I want to incorporate very soon. He compared LLC, C and S corp, and the various types of partnerships. It seems LLC is the way to go for me and most other entrepreneurs. I’ll keep the parts about writing a business plan and running a successful business in mind and refer to them when the time is right for me to grow my businesses.

Last word

This book would have been extremely useful to me about 10 years ago. I took me much longer to come to a similar conclusion. I think real estate investment should be about 50% of an investment portfolio while also investing in stock for liquidity and growth. Even if you don’t think real estate investment is for you, it is still a good read to see another point of view from a top investor. You can go to Amazon and preview the book with the “click to look inside” feature if you’d like.

Update

The latest edition of Generational Wealth is available May 3rd 2011 at Amazon.
Generational Wealth: Business & Investing Guide to Building an Empire

 

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{ 19 comments… add one }
  • Nik April 6, 2011, 9:31 am

    Sounds great.. Gonna go check out this book..

  • krantcents April 6, 2011, 11:19 am

    Since you are becoming a real estate (income property) entrepreneur, you should learn more about 1031 exchanges. As you may have learned it is a tax deferred exchange of like properties. Great way to build a real estate portfolio.

    • retirebyforty April 6, 2011, 12:19 pm

      Do you still have your income properties? I was wondering how you get out of real estate investment. I know you can keep exchanging with 1031, but what did you do when you wanted to cash out?

      • krantcents April 7, 2011, 11:54 am

        I sold and paid capital gains taxes. It is almost painless!

  • Money Reasons April 6, 2011, 7:27 pm

    Sounds like a pretty good book! I just need to finish the 8 or so that I have in queue…

    I’ll keep this book in mind though if I ever do catch up.

  • youngandthrifty April 6, 2011, 11:18 pm

    lol, agree with Money reasons! I still have to read the Millionaire Next Door… and finish Hunger Games 😉

    That book does look really good though- covers the basics, and I like how it focuses on real estate investment too, which is something I’m interested in as well, and I believe that it should be the backbone of many investors (much to the chagrin of the real estate naysayers!)

    • retirebyforty April 7, 2011, 12:11 pm

      You have to read Millionaire Next Door. 🙂
      I had to return 4 hours work week to the library without reading it. It has been so busy. The Mrs. read it though so that’s good.

  • LifeAndMyFinances April 7, 2011, 3:43 am

    Sounds like a pretty good book for anyone that plans to invest. I agree wholeheartedly with their points. First, I would like quite a large part of my investments to be real estate. There are just so many advantages to owning real estate, it would be silly not to!

    I also think that my 401(k) and other stock picks will balance out my portfolio nicely. 🙂

    • retirebyforty April 7, 2011, 12:12 pm

      Yes! So many people have made great real estate investments, we shouldn’t let the last few years deter us.

  • MoneyCone April 7, 2011, 12:42 pm

    Now I see where you get your real estate ideas! 🙂

    That is one area I’m planning to learning more about. You think this book may be a good start?

    • retirebyforty April 8, 2011, 6:26 am

      This book has a pretty good real estate section. I think it’s a good over view to real estate investing. He made it sound pretty easy though, but I know it’s actually quite difficult to turn positive cash flow.

  • Eric October 25, 2013, 5:40 am

    In 1972, my parents borrowed money from family, got a loan from the bank, and built an eight unit apartment building. Always managed it themselves. They never did any exchanging or leveraging up to more property. They just kept the one building until my Dad passed away in 2006, got the big step up in basis, then sold it in early 2008. It was far and away the very best financial move they ever made, with the wealth from that being the biggest part of their estate and more than all other savings combined. Other than that building, they were just regular middle class working folks.

    I never was terribly interested, perhaps because I saw how much work it was, but it could still happen. I would need to use a good management company though, and just be totally passive.

    • retirebyforty October 25, 2013, 8:39 am

      That’s great! It seems housing used to be so much more affordable back then. Now it’d cost a ton to build an 8 unit. How long would it take to get your investment back now? Probably 10+ years in the West….

  • Eric October 25, 2013, 1:17 pm

    I just checked their old tax returns. Original cost in 1972 was about $91,000. The last full year they owned it, gross rents were about $53,000. Amazing.

    • retirebyforty October 26, 2013, 9:56 am

      Oh wow, that is amazing. Time will do wonder for rental properties.

  • Eric October 26, 2013, 8:48 pm

    Seems like all you hear people talk about is buying, selling, exchanging, leveraging up, etc. It’s not that often you really see the numbers that result from just holding one property for 36 years like that. It’s really eye-popping. I suppose you’d get the same sort of thing if you held a dividend paying stock for 36 years, and then compared your current dividend to your original cost.

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