Different Approach to Building Wealth

I recently read a post from an experienced property investor who’s using his strategy to flip properties and buy a Supercar.

This method can work for any luxury car, and it’s clear he knows his property business model and reward his success.

However let’s explore another way to use that same strategy and profit to build even more wealth.

This is what generational wealthy people do—they focus on growing their assets and money first, delaying gratification to achieve even greater rewards later.

What If You Invested Instead?

Instead of buying a supercar right now, imagine you reinvested the money instead. Let’s break down the costs and potential outcomes:

Supercar Costs:

• Deposit: ￡75,000
• Monthly Payments: ￡149,940 (60 payments of ￡2,499)
• Balloon Payment: ￡130,577.50
• Total Cost Over 5 Years: ￡355,517.50
• Car’s Value After 5 Years: ￡130,577
• Loss Against Purchase Price: ￡127,733

Now, instead of spending that ￡75,000 deposit and ￡2,499 per month on the car, let’s say you invested that money at an 8% interest rate. Here’s how it would work:

• Starting amount: ￡75,000
• Monthly investment: ￡2,499
• Growth rate: 8% per year
• Time period: 5 years

By the end of five years, your investment would have grown to about ￡293,750. You would have put in around ￡225,000, and the extra ￡68,750 would come from the interest earned because your money was growing over time.

Why This Matters

Instead of losing ￡127,733 on the car after five years, investing the same amount would give you nearly ￡293,750, (this also doesn't take into account any capital appreciation on the properties over 5 years, which would easily add 10's of thousands to this amount). This approach allows your money to work for you, growing over time so that in five years, not only would you have a larger amount of money, and you’d also have the option to do a lot more with it. You could even buy the Supercar outright if you wanted, or keep investing to grow your wealth further.

.Applying This Principle to Your Property Strategy

If you already know how to flip properties for profit, that’s fantastic. Here’s how you could tweak your approach to build even more wealth:

Flip Properties:

Start by making your ￡150,000 profit from flipping five short lease flats.

Reinvest Your Profits: Instead of spending ￡90,000 on a car deposit and payments, reinvest that money into more properties or other investments. This could turn your ￡150,000 into around ￡240,000 by doing a couple more flips.

Invest for Growth: Take half of that money (￡120,000) and invest it at an 8% interest rate. After five years, this investment could grow to about ￡176,000.

Keep Some Rentals:

Hold onto a couple of the flats and rent them out. If you focus on serviced accommodation, you could get higher rent, which could cover your car payments or be reinvested.

By following this approach, instead of just paying for a car, you’d be building a much larger pool of money. In five years, you wouldn’t just have a depreciating Supercar—you’d have a strong investment portfolio and properties bringing in regular income, giving you financial freedom and the ability to afford luxury without sacrificing your wealth.

The Big Idea

Wealth Individuals often delay buying luxury items because they know their money can grow more if they invest it first. By waiting a bit and letting your money grow, you can end up with much more in the long run, making it easier to buy whatever you want without losing your wealth.

So, while the initial plan to buy any other supercar is a viable option, think about how you could use your money to build even more wealth first. In a few years, you could have both the car and a lot more cash in the bank—plus the financial security to enjoy it all.