This is the last installment of a 7 part series exploring ideas of why real estate is such a good investment. The focus will be on single family and multifamily real estate, but a good idea is a good idea, enjoy.
Over the last two centuries, about 90 percent of the world’s millionaires have been created by investing in real estate. This has created incredible 'political cover' to be a part of that 'millionaire's club'. What I mean is that, so many people have come to rely on real estate for their past and present fortunes, that it is unlikely major legislation would change its tax-advantaged, and political-advantaged position.
Today will be a much more abstract topic, it relates to legacies, dynasties and how your blogger sees the world.
What defined the Middle Ages was land. What defined a noble was being a land-lord (as they still are). It is my, possibly unpopular, belief that our country may be on the tail end, or just past the Pax Americana, and just like Rome did 1,500 years ago, is heading for a more stationary population who works on the land without owning it (peasants). There are obvious difference between then and now, our homes are much less self sufficient than centuries ago (excluding trends such as solar).
However, the crumbling of interconnectedness, in infrastructure (collapsing roads and bridges), in culture (echo chambers), of the climate itself (the average elevation of Florida is 6 feet), can well lead to 'rump states' or 'successor states'. I would not be too surprised to see a 'New California Republic" or "Lone State Republic" or the "Pacific Alliance" or the "Rocky Mountain Confederation" sometime in our lifetimes. Perhaps we will even have our own Justinian.
So what does this have to do with yourself or myself? Land ownership has been crucial since mankind started farming about 8,000 years ago, to create a legacy to pass on to create something larger than ourselves. Anything big has to be beyond oneself, any institution that is lasting must take place across multiple lifetimes. In 1898 the Segerstrom family bought 40 acres, and eventually accumulated 2,500 acres. They are currently transitioning from the 3rd to 4th generation of their dynasty, which includes much or South Coast Metro and South Coast Plaza itself (the 2nd largest private holding of a mall in the country).
This is not to say we should all become like the Segerstroms, only that land (real estate) has been a core part of generational wealth, and a nexus to centralize activity. It is there to create community and tradition; we just choose what we do, then what we do defines us. When families are spatially distant (as many are now), this fractures the house, and diminishes what can be accomplished. I believe it is important to set up shop in a diverse metro, focus on education, about 62.9% of those who graduate college in the LA area stay there after graduation, higher than the national average, focus on generational opportunities, through vertical or horizontal integration of labor. It has been said that we are the average of the 5 people we spend the most time with, and we should watch who we let in.
I ask only that you own your life, and not simply rent it.
Feel free to #askGene about real estate. Thank you for your attention and your support.
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