standard Stocks and Bonds Won't Make You Wealthy – Real Estate Might

No one here is silly enough to tell you that comfortable wealth is a requirement to being swanky. Of course it’s not and there are some things in this world more important than money, but let’s face it, life goes down much easier when there’s enough return on profit to ease the way. In a nutshell, here’s what we suggest. Quit investing in Wall Street and start investing in Main Street. What exactly do we mean by this high-falutin’ and intentionally vague directive?

Let’s condense it. Stocks and bonds will never make you wealthy, but real estate, done the right way, just might. Pay attention, people, because we’re going to go fast. The next 300 words will do more for your personal bottom line than a four-year college degree.

Here’s the problem with Wall Street: This formerly stable investment avenue is now an unpredictable roller coaster ride driven by speculation and knee jerk reactions to the 24-hour news cycle. Our advice is to start extricating your investments in stocks, bonds, and mutual funds as soon as possible.

Here’s the benefit to real estate done the right way: Inflation is the real problem with investing these days. It tenaciously devalues any asset based in our currency, the American dollar. This is easy to remember. If your portfolio is constructed of currency based investments, you’re losing money all the time.

Turn to inflation friendly assets: It’s easy to remember which investments are able to profit in the face of inflation. There’s only one we know of – a fixed-rate, long-term mortgage tied to a piece of income producing property. Some people have difficulty wrapping their heads around this idea at first but here goes. Inflation causes the balance on your mortgage to be reduced in real terms over time, even if you don’t do anything but pay the interest.

By owning income producing properties, you are able to borrow money to buy an asset, rent out the asset to a tenant over the life of the mortgage, and own the asset outright at the end without ever having paid anything for it yourself. Keep in mind that the monthly income from rent should cover the mortgage payment and leave a little cash in your pocket to boot.

This is real estate done the swanky way.

The Jake Swank Team

Flickr / Bitterjug