With today’s ever increasing cost of living, it has never been more important to find sound and safe ways to both protect and invest one’s money. We are all familiar with the concept of saving, and long ago, just putting away money for tomorrow was considered a wise decision. But times have changed. The economic climate of the future has become less and less predictable, however it is still manageable, so long as you allow your money to work for you.
In my opinion, the most important reason to invest is to secure your retirement. When your working days are over, you will want money not just to get by, but to maintain an acceptable lifestyle beyond your working years. Will you have saved enough to travel as you wish? Will you be able to assist in purchasing a first home for your children, or contributing to their ongoing education? There is no reason to sit back and watch as inflation erodes the true value of your savings. Investing is the answer, and this is no longer an endeavour reserved solely for the wealthy.
With that in mind, I offer the following insight with no element of bias or hesitation – there are few investments more reliable than well managed and well located real estate. This holds even truer in Southwestern Ontario, which is among the most stable and desirable real estate markets in the world. During the last economic collapse, whilst countless individuals invested in the stock market were watching their portfolio values erode or disappear, property values in our area did something it hadn’t done in decades – it stopped rising and plateaued. Those invested in property saw their investments hold nearly all of their value through the most uncertain economic period in recent history, and it wasn’t long before values began to increase again.
There are a few reasons why today’s sophisticated and savvy investors have become increasingly more comfortable with owning property as opposed to playing the stock market.
For starters, there’s an inherent risk associated with investing in the stock market. Ultimately the stock market is a fickle entity, subject to emotional swings and to the information accessible to the investor generally. The entire process is based on this information being used to understand things that the average investor can’t understand, and even the so-called “experts” are unable to foresee the impending collapses in time to preserve their client’s capital.
Conversely, real estate is far less volatile, has superior tax benefits, can create significant cash flow and a reasonable degree of leverage.
This is particularly true with rental properties, as you can generate a monthly cash flow in the form of rent, providing you the opportunity to draw another income stream, while still holding it’s long-term viability, something few other investment vehicles can offer. Rent generally increases with inflation, while your mortgage payments remain stable, making property the ideal hedge against the constantly rising cost of living.
Speak to any financial advisor, and ask them if he/she can name offhand an investment that consistently allows you these benefits along with the ability to truly self-manage your money, and to physically visit where you invest to ensure things are as they should be.
For families in particular, investing shouldn’t be a high-stress, high-risk endeavour that requires a perfect storm of events to yield reasonable rewards. On the contrary, it should be easy to manage and understand. If you are at all serious about securing your family’s future, I urge you to look to real estate as a wise place to help secure your future financial needs.