Invest in property or save?
Whether you're flipping houses or holding and renting; property is still one of the best ways to ensure wealth creation and long term growth.
Saving actual cash, does serve a purpose though, and that is to build a decent deposit or initial investment to acquire assets.
But why is it so important to get our hands on assets?
The answer is simple.
Cash depreciates over time; while well considered asset investment can yield a monthly income, as well as give you large capital gains when you deem the investment has matured to a desired level.
That's not to say there's no risk in investing. There is risk.
But there is also risk when we drive our cars.
That is why we must get a licence to operate a vehicle.
Just like driving, investing is as risky as our competence to do it.
For example, if a hazard comes at us rapidly as we drive, we hit the brakes and continue when the road clears.
Taking educated action when investing has the same principle.
Let's just say you purchased your property and rented it out, just as the housing market crashes. You may consider that a disaster right?
In that particular situation you must remember that yes, the market has crashed, and the value of the property has gone down,perhaps lower than you paid for it.
But if it is being rented out, and your tenant is paying you an agreed fixed rate, regardless of a crash, then even in a downturn, your investment is still making money.
The shrewd investor does not panic, selling up at a loss. Instead, they wait and take their monthly rental profits, while the market inevitably rises once again.
The trends are easy to interpret. Property dips, but will always rise.
When the prices do go down, a skilled investor will also see opportunity, and buy as many properties as they can at huge discounts.
So yes, most people would agree that investing is risky.
But is saving hard cash any less risky?
Currencies can become worthless if governments experience a crisis, and with inflation nobody wins as a lifelong saver.
So save money in the short term, educate yourself and increase your financial intelligence.
You can then invest with confidence, and watch your assets grow.