Robert Kiyosaki author of Rich Dad Poor Dad; statement is true in today's economic environment and Extremely low interest rates.
Why Savers Are Losers
My poor Dad believed in saving money. "A dollar saved is a dollar earned," he often said. The problem was he didn't pay attention to changes in monetary policy. All his life he saved, not realizing that after 1971 his dollar was no longer money. Which is relevant in Australia today!
Feeling poorer than what we used to? Our weekly households spends are costing more, and yet "the finance experts claim that the cost of living is lower (referring to our Low CPI for many years). Even though you are buying the same products?
The answer lies in inflation. As time passes, consumables/shopping get more expensive, which is a result that money/currency is losing its buying power.
This is not the naturally occurring phenomenon! Inflation is inevitable and it is something that the RBA aims to keep "low and steady." Approach to our financial position and low interest rates.
So if higher inflation and sustained low interest rates will make money and debt worthless. In fact, debt (used to purchase an appreciating asset such as property) will be the new and best way to build wealth.
Ask yourself this: How long would it take you to saving for to save $50,000 from your current income?
8 years, 10 years?
To save $50,000 over 5 years it would require you to put away $186 per week every week for the next 260 weeks.
There is a far quicker and cost less way to save: Leverage against inflation and use finance to purchase your own appreciating asset:
Properties are going up on average at 8-10% capital growth per annum IN MAJOR CITIES.
Let's explore the alternative to savings, if you purchased an investment property at say $500,000 today within the next 18 months your capital growth based on the average growth rate increase $60,000 to $75,000. Equity increase is as good as savings you can redraw up to 80% of your equity, subject to lender's term and conditions, so $60,000 at 80% = $48,000 in what 18 months.
We have not allowed for you tax savings and financial position in acquiring investment properties within this example.
At Beyond Wealth Group we look at dual income-single asset purchases where the rental income excesse the loan interest costs, making this income for you whilst your capital growth is growing.
Why not enquire today on how you can get started, click on this link.
My Personal believe is that interest rates will remain low for a long time, rates may even be heading further down - this changing times does require us all to rethink the way to use money and how we should embrace good debt big time!
So when back to Robert Kiyosaki when he stated: "savers are losers many years ago" can now appreciate with us in Australia!
Our savings account. Are... You guessed it - savers will be wasting their time and getting poorer!
Remember when investing:
Achieve, Succeed and Celebrate your wins!
Charles Samways is enthusiastic about property and wealth creation would bean understatement. He has over 30 years of experience in the finance and residential property investment industries. With this experience, he can extend his knowledge and experience to improve your financial position. He wants to become your trusted adviser and will approach every transaction from your point of view, not the lenders.