You need to invest your money for your wealth to grow. Otherwise, it will be difficult for you to become rich. I have not come across anybody who becomes rich just by saving money. The fact is, if you don’t invest your money for some decent returns, you will become poorer over time because of inflation. With inflation at work, the value of money decreases as things get more expensive. Hence, the purchasing power of your money decreases over time. With the low interest rate offered by banks that hardly covers inflation most of the time, can you afford not to invest your money? It is crucial to invest your money at some point in your life to be financially prudent.
Ready to invest your money? Let me highlight five important factors to consider before you start investing.
People are getting more health-conscious nowadays. Their growing expenditures on gym memberships, fitness equipment, health supplements, organic foods, etc. are testament to this fact. Surely, it’s not difficult for you to find health-conscious colleagues and friends around you. While people are concerned about their physical health, they don’t really pay much attention to their financial health. Most people don’t have the habit of conducting regular financial health checks for themselves. They simply don't care, or don’t really know how to and where to start.
Recently, I was going through my financial statements and realized that in 2011, I incurred expenses of more than $1 million dollars in cash within 11 months! Now, you must be wondering whether I had been jet-setting around the world, purchased a sparkling new Lamborghini, or bought an exotic holiday home. No, no, no, I did none of these! I spent the money on another 3 new investment properties to expand my property portfolio instead.
Am I crazy? Well, I didn’t regret my decision as all the 3 properties have appreciated in value since with a combined value in excess of $2.85 million. What’s more, the additional properties have been generating good rental yields for me since 2011. Would you call anyone crazy if he or she spends a million today for an asset that brings you cash flow and could increase significantly in value in the future? You probably would invest every cent that you have on that asset, wouldn’t you? However, no one has a crystal ball to tell if a property would rise in value or would fetch good rental returns in the future. The truth is that many people get burnt in buying investment properties. Really, most people don’t make it in real estate investing. They don’t succeed in making money out of their properties as they are not doing the things that should be done, and the reason is they don’t know what should be done in the first place!