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What is the best type of investment?
By Debra Lohrere | In
Investing
When people look at investing, there are three main
areas to choose from; shares, property or cash
deposited in interest bearing accounts.
Why has property proved to be the most effective
choice?
In
Australia
and many other places around the world, over the
past 50 years property has averaged 10% p.a.
compound growth. (Carefully selected properties have
averaged even greater returns). Not forgetting that
investment properties also generate an income from
rent.
Median priced property in Australia have averaged
growing at 2 – 4% p.a. higher than inflation, making
it a very solid investment.
One of the most effective way to build riches is to
accumulate a portfolio of investment properties
(over the space of 7 to10 years) and then let the
power of Compound Interest work to your benefit.
The main reason that property can be utilised more
effectively than shares as an investment, is due to
the added benefit of being able to highly leverage
an investment property.
Leveraging is where you use a small portion of your
own money along with a large portion of someone
else’s money (a bank loan) to secure an investment
of a far greater value than you could have, using
only you own money.
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Debra Lohrere is the author of Creating Financial
Security through Property Investment http://www.lulu.com/content/162236
and How to Research Investment Properties http://www.equilibriumbooks.com/investment.htm.
Please visit her website at http://debra.lohrere.com/home.shtml
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