New Survey Reports Real Estate is the Best Investments to Grow Your Finances
Investing your money wisely can provide you with a strong source of income. It can also help fund your retirement. Investing can grow your wealth; while helping you meet your financial goals and increase your purchasing power. Keeping the bulk of your savings in a standard checking or savings account is always a mistake because the interest rates are very, very low. Let your money work for you while keeping the risk to your investment very low.
And that’s the key: look for strong returns at low risk. But always have a manageable debt level. Also, always keep some cash on hand for that unexpected rainy day.
Safe ways to invest at higher returns include CDs, corporate bonds, treasuries, and stock index funds.
In terms of stocks, rather than picking individual stocks to invest in which can suffer through bad earnings reports, etc., choose exchange traded funds (ETFs) or stock mutual funds. These are financial vehicles which buy large groups of stocks instead of individual ones. So, if one stock suffers bad news and drops in value, you are well protected by the other stocks in the fund. I short, the value of the fund won’t suffer much – safety in numbers.
One final piece of sound advice is to focus on investing in quality funds, and for the long term. Don’t make the mistake of panicking if a fund during a given period dips in value. History tells us that quality stocks (in this case funds) will rise again and far surpass your initial investment, over time.
Another option for the more cautious, conservative investor is treasury, bills, notes, and bonds. These are issued by the US government and are guaranteed in the same way that your bank accounts are. The difference being that they pay considerably higher interest and are exempt from state tax. Bank accounts, stocks, stock funds, and CDs are not exempt from state tax.
Along with the stock market (remember, if you want to be careful, stick to funds), real estate ownership is the best way to accumulate wealth. This is proven through history. While there are ups and downs in all markets (investments), during the long term, these investments have proven to be the safest and most profitable.
Real Estate Investing to Grow Your Finances
A survey by Bankrate shows 29% of Americans said real estate was their top pick for investing money they won't need for at least 10 years. This figure was the plurality when compared to other investments.
There are a few ways to invest in real estate. These include buying a home to live in, buying an investment property and thereby becoming a landlord, and investing in REITs.
REITs investments allow investors to invest in real estate without actually owning the property. They are very similar to the stock funds discussed above. In essence, you invest money to buy shares in a financial vehicle which pools money together from many investors and buys parts of real estate entities. These can be investments in rental properties or more commercial entities like health facilities, hotels, malls, etc. These vehicles can pay high dividends, but like all investments, they are dependent on the condition of the overall economy, and, more specifically, on the strength of the sector they are investing in.
Real estate investing with the intention of renting units is an age-old way to build wealth – while very often realizing an increase in the value of your property when you choose to sell. But becoming a landlord is not that easy. It can be labor intensive. You’ll be fielding calls from tenants and need to fix issues that will inevitably arise with any property. Renters must be properly vetted. Credit and criminal records must be checked, etc.
If you are not interested in handling this yourself, you can hire a management firm. But a management firm comes with expenses which will eat into your profit. There are landlords who are lucky enough to have a handy-man tenant who can work for you while living in one of your units. Perhaps a below-market rent arrangement can work.
Also, real estate investing comes with tax breaks that the other investment options don’t.
Improving the property, for example, can be a tax write-off. There are also other tax advantages.
The bottom line: Do your homework. If you feel you are not adept enough, seek assistance from a licensed financial advisor. If real estate investing seems attractive to you, seek out an experienced real estate broker with impeccable credentials, who is intimately familiar with the area you are considering buying a home or an investment property.
Those who are interested in investing in real estate in southwest Florida, or those who are not yet ready, and just have a few questions, should not hesitate to phone me. The answers or advice comes with no charge, of course.