Cash is known as by many to be the safest asset since there is no way so that you can lose your investment if that cash is in the safety deposit box down at your neighborhood bank or stuffed under your 10-year old mattress. However, your money actually loses money every year if you don’t spend it. It’s the consequence of this nagging issue called inflation. The common inflation during the last a decade (from 2002-2011) is 2.54%. In 2011, it was 3.16%. And it doesn’t even take into account all the stored inflation yet to be unleashed. The Fed has doubled the amount of money supply by printing over $1 trillion dollars in new greenbacks since 2007. If you’re sitting in cash, you are simply just throwing that money away. That is one reason people spend money on the first place – rather than doing work for your cash, you want to make your cash do the job. Visit: Success.org
Property is a particular asset class that will help make your cash do the job in regards to inflation. Even though many people dislike inflation since it makes things such as the price tag on gas rise, and causes us to invest more income on things such as food, rent and entertainment, real estate investors LOVE inflation. Not merely does inflation have a tendency to cause property values to increase, but investors can also charge more rent for the buildings they own – making inflation the double whammy for real estate investors!
Most individuals allocate their funds across a variety of asset classes like cash, money market accounts, stocks, bonds or even startup investments. Some of these monies could be very liquid, like cash and stocks, while other monies are less liquid, committed to CDs, 401ks, and Roth or Traditional IRA accounts.
Adding real estate to any portfolio further diversifies what you are buying. The good thing about diversification is the fact if one asset class is not performing well, you don’t have your entire eggs in a single basket.
Our motto for our investors at Realty Mogul is “no trash, no toilets, no tenants”, and therefore you as an investor won’t have to cope with the hassles of property ownership while still collecting your pro rata share of the web income every month. By buying real estate, you can literally generate profits when you sleep. This process to income is a lot unique of “active” income, such as turning up for work every day, where your time and effort and income are linked.