While you have a variety of investment options, very few of them allow you to always remain in control. Stocks and bonds are fickly, unpredictable, and have bad leverage. They offer either low tax benefits or no tax benefits at all.
They’re a paper asset, a fiat by authority or by decree. Stocks are worth something only because the company and then an investment banker declare it so. Then, they’re (sometimes) backed up by the market, which is often and easily manipulated.
The stock market, when we look at it closely, is little more than a casino. In most casinos, the vast majority of the people are losing money. Large, institutional investors (think brokerage houses, insiders, and fund managers) are able to get rich by using the money we provide, but we end up with little to nothing.
A business is another way you might choose to invest your money. The problem is, a business is very complex. There are a lot of moving parts, which makes it an extremely high risk proposition. Jason Hartman, who purchased his first real estate property at only 20 years old, has often asked people what they think of tenants and dealing with tenants. More often than not, people agree that it is rarely pleasant and even more infrequently rewarding. If you think tenants are difficult—well, just imagine dealing with employees.
While tenants need something about every month, employees are around every single business day. Maybe even on weekends. So yes, businesses are a great way to produce income, but they’re anything but passive.
Income property, specifically residential property, is universally in need. It is a tangible, real, hard asset, a set of packaged commodities that is in demand no matter where you go in the world. Income property provides fantastic tax benefits, leverage, excellent financing. It is a wonderful hedge against inflation for two reasons. First, as inflation occurs, properties undergo an increase in value. Next, you debt declines in value through inflation. Your tenants are paying of your loans and you’ve got direct control.
Certainly, there are a number of investments, both large and small, that a person could make. But the best are those that offer sustainable, tangible income. Property investment is the lowest risk, highest money making investment that there is—and a great way to build real, lasting wealth.
(photo credit: Gold Beach Real Estate via photopin cc)
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The Jason Hartman Team
