Mar

Why, why, why Delilah?

It is often said that New Zealanders are “obsessed” with property investment. This is kind of true in one sense but completely misses the point of WHY we are into property. Let’s look at the options.

1. Stick your money into managed funds. Managed funds are a great way to create fee based income fro fund managers but talk to any older solicitor, as I did yesterday and they will tell you they are a rort. My solicitor told me of 2 clients with significant funds in a managed fund. One of them achieved 14% cumulative increase over 10 years and another averaged 2.5% over the same decade. So managed funds lose you money as they don’t even keep pace with inflation

2. Finance Companies. It has been shown to most kiwi’s satisfaction that too many finance companies are operating ponzi schemes so it will take a long time before we ever go there again.

3. Shares. Well rightly or wrongly, average mum and dad think shares are legalised gambling and they just don’t understand it, so it will never get the traction it has in the USA for example

4. Property. So property is easily understood, has feel good factors and a long history of increasing values. Compared with 1,2 or 3 you would be stupid to not consider property.

This is not me talking as a property educator now. I got into property BECAUSE I reached this conclusion when I was looking for ways to create wealth.

It’s time the governments stopped complaining about us loving property and understanding that we love property because it is low risk. Business owners bang on about how unfair it is and how hard it is for them to get funding. Well that’s because 90% of them go under. The government doesn’t want to fund high risk lending but wants its constituents to??

That is simply irresponsible governance.

If we look at Australia where they forced people to save a significant percentage of their income for retirement and then allowed them to invest directly in property. End result is a wealthy nation with a robust economy. (Yes there are other factors but compulsory super is a huge foundation to their peoples wealth.)

So as an investor today be proud that you are investing in the safest and lowest risk asset class possible, which is responsible investing, and ignore the whiners and complainers who like to attack those who are taking control of their own futures.

Let’s celebrate our obsession with securing our financial futures, leaving a legacy for our children and not wanting to throw money down the drain on riskier ventures