Michael Emilio

Did you know there’s 25 rules to grow rich by?

Don’t worry if you don’t know them, I didn’t know them either.

But after reading them at CNN Money, thanks to an article from Simple Dollar, I’m not so sure they’re all true.

Now, not all of these rules relate to real estate, so we’ll be tackling the rules that deal with real estate only, since hey that’s what this website is all about. We’ll go through each rule one-by-one and see how valid and applicable they really are. Is it just a bunch of filler that the author of the article on CNN Money wrote or do they have merit?

When I read them, I started thinking, “Hmm.. is this really a rule? Or is it just an opinion?” Too many sites on the internet have tons of “rules” that we should supposedly follow in order to “lose 50 pounds in 8 days” or “achieve financial independence in one month by investing in timeshares” or some other nonsense. Here we’re all about separating the wheat from the chafe and finding out what works in real estate. What’s going to make us money. What’s going to give us the biggest bang for our buck in remodeling our homes. How to save money on your rental payments. Where to find the hottest real estate deals in the country.

There’s a little challenge with our goal of analyzing these 25 rules to grow rich by and modifying them.

There are only 6 rules that really apply to real estate. So we’re going to focus on them and really dissect them!

Here are the 6 rules in their original form (click on the Rule hyperlink for each one to read the revised version):

Rule 1: For return on investment, the best home renovation is to upgrade an old bathroom. Kitchens come in second.

Rule 2: It’s worth refinancing your mortgage when you can cut your interest rate by at least one point.

Rule 3: Spend no more than two times your income on a home. For a down payment, it’s best to come up with at least 20%.

Rule 4: Your total housing payments should not exceed 28% of your gross income. Total debt payments should come in under 36%.

Rule 5: Never hire a roofer, driveway paver or chimney sweep who is going door to door.

Rule 11: If you don’t understand how an investment works, don’t buy it.