The Future Of Some New Investment

A group of people in a dark room

Future of the economy is changing — so is investing! Investments that worked for your parents will NOT necessarily work for you.

Take for instance-

I will never forget a lesson my father gave me. He told me that investing in real estate is the best_investment. Additionally, in some areas of our city, it is a fool-proof investment. However, he advised about it thirty years ago.

I asked him why is it so? 

The Future Of Some New Investment Plans, Let Us See
The Future Of Some New Investment Plans, Let Us See

Future: Some Story To Learn From

He said that he struggled with some investments. Therefore the feeling regrets. Additionally, he overpaid for some properties.  

I asked him why is it a full proof plan?

He responded that he regrets after buying properties that come with high prices. Additionally, he also stated for a few moments while he was getting a calendar to explain his lesson.

He then continued, he went back home, feeling that he made a mistake. However, his time got recovered from my best friend. He stated this is showing the dates of the years on the calendar.

I asked him, is it “Time.” 

He replied, that yes. Besides, time helped him to erase his mistakes. 

He saw my face confused and continued that our city is growing so fast that there’s plenty of demand for land or property. Additionally, prices are going up, no matter how high you buy. Therefore, prices will always go up — however, one has got to make a very stupid mistake to lose money and learn. 

The Future Of Some New Investment Plans, Let Us See
The Future Of Some New Investment Plans, Let Us See

This Is NOT True Anymore!

Let me explain.

Capital gains were the investing that worked for my father. I also grew up with this understanding.

Capital gains?

Example: You buy a property for $100,000 and sell it for $140,000. The $40,000 profit is considered “capital gains.”

Before the 2008 financial meltdown, the expectation for many investors was that property prices would go up.

But after the real estate market crashed in the US, things changed. When prices fall (nobody can predict this), capital gains investors lose.

As our economy shifts, capital gains investing is now becoming a more unpredictable gamble.

Solution? People need to shift their investment strategy to cash flow.

Example: You purchase the same single-family house for $100,000, and instead of fixing it and selling, you rent it out for $1,500 per month.

Every month you collect rent and pay the expenses. If you bought the property at a reasonable price and manage the property well, you should have a monthly profit, a positive cash flow.

Cash flow investors are not as concerned as capital gains investors at market fluctuations.

So, to answer your question, what should everyone know about investing?

Things change. Trends change. Markets change. Investing strategies change! Do your homework before investing to be able to anticipate changes!

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