Do it right in #realestate investment; #wealth creation at its best
Only invest in what you know and understand: A loss in an investment you understand is safer than a profit in one you don’t. Study the area you wish to invest in, understand community benefits and community challenges, layouts, build quality, traffic at peak, future prospects, future risks.
Those are all elements we will deal with in this series:
Dose 1. Real estate a component of every portfolio.
Dose 2. Step buying to crunch busts and booms (Afloat in a cyclical industry)
Dose 3. Opportunities within every part of every cycle
Dose 4. What does it really mean to have a market with short and fast cycles (Liquid markets and why they are the most interesting?)
Dose 5. Have your money work for you.
Sustaining wealth historically meant a 2 to 4% annual growth across one portfolio (except at periods of hyperinflation).
Taking into consideration you need to have a diversified portfolio; between all instruments and asset classes you are comfortable to invest in; depending on your risk tolerance and appetite:
Some of your wealth should be in cash – earning nothing.
Some in fixed income or very low risk instruments – earning approximately nothing.
Taking this into consideration you will need to have other investments that will earn around 8% annually just to sustain your wealth.
Real estate is one of those assets that can earn you enough to sustain or grow wealth depending on how you treat it. Real estate is one of the very few investments that pays you a yearly income in additional to the annual growth.
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