It’s not. There are plenty of non-wealthy people who make money from things other than their labor.
Small-time landlords are an example, as would be anyone who owns a small business and draws cash from profits rather than taking a salary.
It’s not. There are plenty of non-wealthy people who make money from things other than their labor.
Small-time landlords are an example, as would be anyone who owns a small business and draws cash from profits rather than taking a salary.
im going to be controversial and say no one should have anything other than labor as their main income until they retire.
anything you can do thats useful to society counts as labor (but not vice versa, you can work as a robber or corporate lobbyist). from line cooks to wall street ceos to open source volunteers and stay at home moms who dont get paid but still work. landlords and executives count because management is labor too.
if your income comes from a trust fund or owning properties that you dont manage thats a passive reward for doing nothing. you are not productive. you are a parasite living on the back of everyone else and expecting indefinite rewards for a fixed amount of work you or your parents did years ago.
What if you volunteer 30-40 hours a week but pay your bills with rental income? What's your position on that?
> non-wealthy
> landlord
If you think these two things are compatible you need to talk to more people outside of your bubble.
Not American here. I know a couple of people who took out a second mortgage to buy a small appartement to rent out when mortgages rates were at 1%. They probably have €300k in equity in both the primary and secondary home. And around €600 in income from the rental. I do not consider that wealthy.
I would describe that as having invested in an appreciating asset (like stocks), and their main income comes from the gains of the property prices as they go up in value. Moreover, they leveraged themselves via loans to acquire income even faster.
These gains might be realized at any point if they're willing to pay taxes for them.
Having lots of money but choosing not to spend it doesn't make you any less wealthy.
Most landlords are leveraged up to the hilt. They may look wealthy from the outside but a close look at the figures says otherwise.
You don't have to be especially wealthy to own a second house and rent it out. That isn't poor, certainly, but I wouldn't call it wealthy either.
The original comment said "ultra wealthy".
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So “landlord” and “commercial landlord living entirely off of passive income” are worlds apart.
Buying a fixer-upper outside of town with high-school and early 20s grinding, renting out 3+ rooms to cover the mortgage for painful years, working 80 hour weeks, refinancing against that first house into another under-maintained property where you live in half while upgrading the other, ending up with a rental duplex and drastically reduced living cost, is viable by 30. Maximizing youth savings, first house programs, and primary residence rules create less punitive economics.
It sucks and will let one learn why landlord is a pain in the ass job, and relies on sweat equity and modest lifestyle, wanting to commit to real estate, and non-ideal properties. Trade school or skipping college for early income and low debt make the numbers crunch easier.
Investing consistently into the market in your 20s probably out performs it by 65, and a young bankers lifestyle is a joy of its own, but: owning property young is achievable for electricians, security guards, and janitors.
Live in a poor place. There are plenty of cheap houses, but you do have to leave expensive areas (shocking, I know).
So, are the landlords wealthy or not wealthy? I don't get it.