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19 Jan

6 Ways to Create Wealth

General

Posted by: Kim Banting

Did you know that most of the wealthiest people in the world got to where they are by investing in real estate? It’s actually been referred to as the #1 Millionaire-Maker.

By having an understanding of how money works and making smart, responsible choices, you can build a secure financial future for your family.

So let’s talk about the 6 ways that you can create wealth by investing in Real Estate.

1. Benefit from inflation – Inflation is only bad if you don’t own an asset that’s gaining value. If property values rise and rents rise, so do your profits.
2. Generate cash flow – Have you ever heard the phrase “make your money work for you”? Smart investing will make your mortgage payments for you. Once your mortgage is reduced or paid off, all this extra cash can be invested for retirement.
3. Reduce your taxes – The expenses of operating a revenue property are tax deductible. Bonus!
4. Asymmetric risk and reward – This is a fancy way of saying that you put down a small sum of your own money, borrow the rest, then, as the property increases in value, your equity position rises substantially. The bank takes most of the risk, while you enjoy most of the reward.
5. Asset appreciation – You may initially take on a lot of debt when you buy a revenue property, and that can feel a bit intimidating – but this is what is considered “good debt” that will generate investment-grade returns over time. It’s not like a car that begins to depreciate as soon as you buy it, real estate almost always increases in value.
6. Inexpensive source of funds – Once you’ve built some equity, you can access it at inexpensive mortgage rates to fund new investments and keep the ball rolling.

Of course, it goes without saying that you must be prepared and responsible, because if you aren’t you could get in over your head. However, the stability of investing in Real Estate has been proven to be the safest way to build your wealth.

Sincerely,
Kim