Willie owns and manages a number of real-estate rental properties in town and en

Question

Willie owns and manages a number of real-estate rental properties in town and enjoys being his own boss. At 46 years old, Willie figures he would like to retire after working for 10 more years, so he is starting to think about investing for the future. His latest investments have been successful – after selling a four-unit apartment building and a town house, Willie has $400,000 in the bank and is debt-free. With only 10 years before retirement, Willie wants to make solid financial decisions that will limit his risk exposure.

An attractive property has come on the market this week – a pair of townhouses with a great view. The rental units are in good condition and would need only some minor repairs in order to get them into shape for rental. They are in a good location for vacationers and summer rentals. The price tag for the two townhouses totals $275,000 – well within his range. He figures he can invest the remaining $125,000, and between the two hopes to have $1 million on which to retire by age 56.

Willie’s local bank offers a 2-year certificate of deposit (CD) that pays 6% compounded quarterly. A competing bank in town also offers a 2 year CD that pays 6%, but the interest is componded daily. If Willie invests the $125,000, how much more money will he get from the second bank after two years due to the daily compounding (assume exact time is used)?

Thank you financial math expert!

Explanation / Answer

With 400k; I would find a good biz consultant [like me] and find weak companies--retail, near my home. I would prepare to buy 6-8 weak companies that could increase in book value from 12 to 125% in 90 days after "repairs." I would create one LLC and put all of these into it and then, buy a public shell. I would then "have the books updated as an asset of a public firm" and shortly thereafter, find a [larger than yours] WEAK public firm........prepare a team to fix it, and back into it. Within 120 days, your new net worth would be about 25x what it was 6 mo earlier. then-- buy all the real estate you want fund other's small biz's have a net worth over $5m. the risks; less than 5% if done correctly and no tenants to think about [the cash flow from the real estate you would buy would be pure profits and you would have a management firm to supervise them anyway.] I can guide on the slow way to growth or this superior way [what all the rich people do.]

Related Questions

Navigate

• Browse (All)
• Browse W
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.