Update on my 9 year old daugthers first "real" investment

Update on my 9 year old daugthers first "real" investment Posted: 21 Jan 2009 09:15 AM CST Post written by Rob Minton Follow me on Twitter This post is a follow up post to: My 9 Year Old Daughters First "Real" Investment I received great news yesterday on my daughter's investment. Now, I realize you probably don't care very much about this investment. On the surface it might not seem like this update could benefit you. However, it would be a big mistake to think like this. I'm actually including this follow up post because I believe it offers many valuable lessons for you. First the update - then the lessons. Sound good? In late December 2008, we used my daughter's self-directed IRA to buy a used mobile home. Her IRA invested $5,000 to buy a 1979, 3 bedroom mobile home. This same mobile home sold on this past Monday for $13,190. The buyer paid $710 as a down payment and will make 72 monthly payments of $275.33. All combined, this one investment (with interest), will generate $19,824.03 of income. This investment has a total return on investment of 296%. Divide this total return on investment by 6 years and you'll see that the annual return on investment is 49.3%. I need to stop and give credit where credit is due. This investment was identified and sold by Brian Beck, our Income for Life mobile home guru. My dauther's IRA wouldn't have achieved these investment results without Brian's help and guidance. In fact, he really did everything for her IRA.We are very grateful for his help. During this same time frame, the stock market here in the States has dropped again and is testing out new lows. In fact, yesterday was very ugly in the stock market. Her little investment locked in 6 years of 49% returns. What can we learn from this? First off, think about how her self-directed IRA will grow over the next 6 years as payments are collected from the mobile home buyer. If she doesn't make any additional contributions between now and then, her IRA will be worth over $!9,000. She will be 15 years old at this time. Imagine what this could compound into when she hits 50 or 60. It's scary, but many adults don't even have this much saved for their retirement. Within 2 years from now, she might have enough accumulated inside her IRA to buy a second used mobile home investment. Her IRA would then collect two monthly checks. This process could continue on for years to come. Would she need to save a lot of money as an adult? Probably not. This is assuming that she continues to snowball this first investment within her IRA. My goal was to give her a head start to financial independence. I think the goal has been accomplished. Couldn't you do the same thing for yourself or for your kids? Most definitely. Contact your local Income for Life group for more information on these mobile home investments. You can apply online at: http://www.IFLApplication.com Here are a few other lessons for you to consider.... Anyone can invest with the right help and guidance. You can still make very attractive returns in the middle of a recession. You don't need a lot of money to get started. You can design your investments so that the economy doesn't have any impact on them. The power of investing through a self-directed IRA. Now it's your turn. Please do something with the information I just shared with you. Knowledge is useless unless it's acted upon. Give your kids head start on financial independence!