This week I have been mixing business with pleasure while sunbathing on Coppacobana beach in Rio de Janeiro. As I traveled this week dancing to the samba rhythm of Latin America, I realized the huge divide between the rich Brazilians, with their elegant houses, and the really poor locals who live on the squalor in the overcrowded “Favella” communities of Rio. . I began to understand how the rich get richer and the poor stay poor. In this world, money really makes money, the more you have, the more it makes for you. I remember once a wise old man told me “never sell property” and always “use other people’s money” to buy property.

I have read many books on real estate development and investing and the power it has to make you rich. One of the best sources of information I found was reading the Rich Dad Poor Dad series of books. These books teach you how to use other people’s money, i.e. banks’ money, to buy properties and then increase leverage to buy more properties using the capital obtained from the previous ones, through capital appreciation.

Historically, property has always gone up in value, with only a few blips in the market due to economic conditions. It has always outperformed the stock market and therefore investing in bricks and mortar represents a very safe and prudent way to increase your wealth. Naturally, you have to get it right, but by investing wisely, in the right place for the right price, and in the right location, you can make a lot of money on those bricks.

One way is to “flip” the property, that is, buy it low, fix it up, and then quickly resell it for a profit. The other alternative is to “buy to let” to earn passive income through rentals and hold them for the long term to gain capital appreciation. Another good way to invest in property is to buy “off plan”, whereby you put a deposit on a property and then wait for it to be built and then either sell it before completion or hold it for rent. Either way, you can make a nice profit due to increased property value upon completion.

You can build a pretty sizable portfolio of properties by releasing equity on each of your properties and then taking out a buy-to-let mortgage to purchase an additional property. Eventually, you will be able to sell some properties and with the money from the sale you will be able to pay off the mortgages and still be able to keep part of your portfolio for rental income and capital appreciation. So the goal is to eventually be mortgage free while still earning a passive income from your remaining properties.

People are often scared to death by the word mortgage, they consider it a death sentence, a noose around the neck. In fact, a mortgage is good debt, while a car loan or credit card is bad debt. Banks love property and mortgages because they see property as a good investment that will grow in value all the time. They love to lend you money to buy that property, so don’t be put off by the word mortgage, it’s good debt. So be bold, take the plunge and invest in the next property and if invested wisely it will go up in value and make you a lot of money, it could even make you super rich.