A recent article in Barron's by Randall S. Forsyth, "Big Brother Meets Big Data," reported on the quarterly Flow of Funds Accounts from the Federal Reserve that detailed how American household's "...had recouped their bear market losses, helping their net worth eclipse the previous peak, attained in 2007, before the Great Recession."  While that is certainly very positive news, there was a negative aspect to it in that this benefited the most affluent, as much of the recovery had been in the stock market. For all Americans, investing in real estate is the great equalizer.

There is no better way to accumulate wealth than through passive investing in real estate with a long term approach.  History proves this fundamental lesson of investing.  Over the last two centuries, about 90% of the world's millionaires have come from gains in real estate.

To be a real estate investors entails the first step of buying real estate.  Just the act of being an owner rather than a renter immediately improves your financial position for the long term.  Rather than cutting a monthly rent check for which the money is gone forever, the mortgage payment paid instead builds up equity.  When the mortgage is paid off, the property is owned free and clear.  It can be sold or rented, with all of the money going to the owner, not the landlord.  

That will never happen for those who remain a renter for life.

Real estate is a classic case of those gaining the most who, "Get in early and stay late."  That is why passive investing for the long term is the best way to prosper in real estate.  Buying turnkey properties and other through opportunities, the novice benefits from the experience of more seasoned professionals in real estate.  As an example here, Jerry Cohen, President and Founder of EquityBuild, a real estate investment firm, has been a principal in more than two thousand real estate transactions since 1984.

Passive investing in real estate for the long term also puts time on your side.  This is particularly true for those who own rental properties.  In the United States, rental income increases about 5% annually.  That means it doubles in less than 15 years.  If a rental property was going for $1000 a month in year one, it would be renting for over $2000 a month by year 15.  If there was a 30-year mortgage on the property, over $50,000 a year in rental income would be flowing from the property after the mortgage is gone.

That is more than $50,000 a year going straight to the real estate investor, as there is no mortgage to be paid.

Low mortgage rates now favor real estate investing.  No matter what the mortgage rate, investors should always be buying real estate assets.  As my father, who worked in the securities industry for over five decades, likes to say, "There are always good buys in the stock market."  That same is true for passive, long term investing in real estate.