Wow, have you seen the stock market lately?
Mr. Money Mustache
FEBRUARY 25, 2025
For example, if the house brings in $2000 per month ($24,000 each year) and the sale price is $240,000, the next investor is buying a business with a price-to-earnings ratio of 10, because 240k/24k=10. Its just basic math. But if you manage to convince someone to hand over $480,000 for that same house, youve sold at a P/E of 20.
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