Why Young Professionals Should Invest in Real Estate? 10 Reasons
They say that it is better to invest when you are in your early or mid-twenties, right when you are earning a lot in your career without the responsibilities of adult life or having a family of your own. And the earlier you start, the more time you have in exploring the vast branches of investments.
Real estate is one of the possible investment choices a young professional can choose. It can be intimidating at first, but eventually it can be very rewarding. Here are ten reasons why you should invest in real estate:
1.) The financial concept of “Time Value of Money” applies quite well in real estate investment. As inflation soars, the value of savings are reduced and other expenses go up especially rent. And with the price of rent bumped up, you get to earn more over time.
2.) It is better to start younger since, when you get older, you’ll have more commitments and responsibilities on your plate. You might not be able to market a lot anymore.
3.) Real estate is a tangible asset. You can use it, rent it to others, and even renovate it to increase its value. There’s also the psychological comfort of seeing your portfolio or taking your friends through a stroll on your properties.
4.) Real estate is an excellent source of passive income. You can have a stable cash flow without much active participation or management on your properties.
5.) Compared to stock market investment, real estate is much easier. Stock market requires education, research into its complex systems, and has a huge risk involved. You may also need to be mentored by experts like Bo Sanchez in the Truly Rich Club. Real estate is much simpler with very little complicated research and it is possible to do it all on your own.
6.) You can use your properties as assets in applications such as bank loans. Condominiums are an acceptable proof when you are applying for tourist visas such as Canada’s temporary resident visa wherein they consider properties as proof of funds.
7.) Investing in real estate teaches you a lot of financial skills, improves monetary dexterity, and makes you a lot more capable in handling your finances. These are extremely useful should you choose to pursue other fields that require financial know-how.
8.) You can pass your properties to your children when the time comes. Not only it will provide them passive income or a house and lot to live in, real estate will also open the doors to the world of investing.
9.) Shelter is one of the important human needs, along with food and clothing. When you rent out your properties you’ll surely have a tenant or two eventually. Some people also seek properties to stay in at popular vacation spots such as Baguio City.
10.) When the property has appreciated its value after a long time, you can sell it if need be for a hefty sum. This can be considered as a last resort in response to any situation that may render the property unable to generate a considerable passive income. And it also helps knowing that you have a fallback in times of financial emergencies.
Looking for Passive Income Sources? What to Invest in Your 20s?
When it comes to investing, it is always best to start as early as you can. Why? It is simply because the earlier you begin, the more is your earnings. But of course, if it’s just now that you’ve known the wonders of investment or perhaps, have the courage to start while being a young professional, it is never too late. You always have the chance to become a successful investor. But, what are the best investment options? Are there any particular investment that is best for everyone who is in their 20s? Well, there are two. Based on a survey conducted among young Filipino professionals, investing in real estate and stock market works perfect for them. They have become their highly reliable passive income sources while having a full-time day time job. Here’s why.
Why Real Estate?
● Capital Appreciation
Capital appreciation simply means the increase of the property or asset’s value in comparison to capital depreciation, which is the decrease in value.
If we say cars, gadgets, and the like, they are not considered investments because their value decreases through time. You become the loser in the end. Say for instance, you buy a Smartphone now that costs 20,000 pesos. Later on, 3 to 5 years after, new versions were out in the market and it’s current value becomes 10,000 pesos. Just imagine how much you lose.
But if you invest your money in things that appreciate in value as time goes by, the satisfaction that you feel in terms of money is long-lasting. For instance, you buy a house and lot in one of Baguio City’s premier locations that’s worth around 1 million pesos today, which becomes 3 million pesos in worth 3 years after. That’s a big ROI there. It is possible that your capital will be tripled in value. But of course, the market value of your property depends on a lot of factors aside from its location.
So, would you go for capital appreciation or capital depreciation?
● Cash Flow
What is cash flow? It is the amount of money you get from a rental property per month after you deducted all the paid expenses. Expenses would pertain to electricity, telephone, water, maintenance, so on and so forth.
Now, talking about rental property. Another technique that you can use so you get the most out of your investment is to have it rented or leased. So for example, you purchase a house and lot to serve as your townhouse in Baguio City but since you only go there once in every 3 years, the best thing to do is to find a tenant with a 3-year -term. The same applies when you have a condominium in Baguio.
The good thing about rental properties is with their cash flow as it increases over time without taking away any from your capital or principal investment. It goes up through time because rental fees increases with inflation while your mortgage due remains the same. Sooner or later, you will be able to pay off your housing loan and your property’s cash flow will go up outstandingly.
● Highest Growth Potential
Over the years, Philippine stocks have been consistent in earning more compared to bonds. This is considering the regular highs and lows of the market. Say for instance, you invested in stocks during the 1920s. You bought a 100 peso worth of stocks from one of the most established companies. Now, during this time, the average interest rate per year was 10 percent compared to bonds with 5 percent. Given that you have been consistent with your investment up to this day, you will surely earn big time in stocks than bonds. That is how amazing it is. Most of them time, bonds offer a lower interest rate compares to shares and stocks. So, I’d say you go for stocks investment.
● Ride with Ups and Downs
So you may realize that it sounds good to possess more stocks, however advertise downturns may in any case make you anxious. The features can be frightening. Keep in mind this: It might be excruciating for some time, yet in the event that the share trading system carries on as it has over long stretches, you ought to in the end be in an ideal situation. Considering it along these lines may help as well: Losses are just on paper unless you offer your speculations. In the event that you are enticed to offer investments for sale when they are down, advise yourself that you are putting for a period far later on. Attempt not to let fleeting unpredictability cause you to move far from stocks. Likewise, in the event that you spare consistently and keep on contributing amid down business sectors (and the business exhibits the sort of long haul development that it has verifiably), you will be adding to your reserve funds amid those business plunges, or "purchasing low." When the business recuperates, you may be stunningly better situated for development.
● No Need to Invest Everything
I’d say that a proper blend of investments ought to be in light of your time horizon, budgetary circumstance, and resilience for danger. However, those people who have longer investment horizons ought to have a huge, comprehensively broadened stock investment exposure.
Chances are you need stocks to sufficiently spare to carry on with the life you need in retirement. In this way, be careful with contributing too conservatively. Get used to riding the high points and low points of the market. In the event that you are contributing for the long haul and sparing consistently, a downturn can even help support your investment funds on the grounds that you may be purchasing shares of a stock at lower costs. That is the influence of having quite a while to develop your cash. Also, on the off chance that you are uncertain of what to do, consider a managed account like mutual funds.
Would you like to know your investment options now? For real estate, feel free to contact us for more details, while for stocks, I highly recommend that you join Bo Sanchez’ Truly Rich Club for expert guidance and excellent techniques.
Success Stories of Two Filipino Real Estate and Stock Market Investors
For some people, they require hard evidence before they actually believe your or perhaps, try something, especially when it comes to financial investments, which is understandable because these involve a big amount of money. It is not enough that you tell them how they can earn and how much they can get. They ask for real, genuine testimonies from someone popular in the business. And so, for this purpose, we are featuring the success story of two Filipinos whose lives changed drastically because of investing in real estate and stock market, respectively.
From Being a Call Center Agent to Becoming a Big Time Real Estate Broker
The Success Story of Benjamin Palaroan
Benj and his wife were formerly call customer service representatives for a BPO company and in their pursuit for a greener pasture, they also joined a network marketing business, but unfortunately, they had to give it up because it brought them too much debts and unhappiness. Despite all these, however, they didn’t give up on their dreams. They were still eager to find better opportunities that can give them the time and financial freedom they always wanted.
One day, they learned about real estate selling. A friend told them that this business does not require any money for capital and indeed, he was right. All it requires was their time, effort and commitment to create a sale. So they emptied their cup and did what they had to do. They applied all of the ideas they learned from the training and seminars they attended and thank God, by His power and might, coupled with their persistence and consistency, they we’re surprised to close 10 condo units in just 6 months and continuously sell more. It really blew their mind! They were so happy when they received all their commissions. They earned their first ever MILLION peso savings through real estate. They are now also offering house and lot investments.
From Being a Regular Employee to Becoming a Successful Stock Market Investor
The Success Story of Catherine Mapili
When the popular Filipino financial guru, best-seller author, and motivational speaker, Bo Sanchez, introduced CitisecOnline (which is now, COL Financial), she never thought she’d be able to start trading stocks and become a stockholder with such a small amount. And so, she gave it a try.
With no expert knowledge about the world of stock market, she went to the company’s office and submitted all the requirements including the 5,000 pesos starting deposit for the Easy Investment Program. When she finally got an online stock trading account, she bought stocks from RFM Corporation and SM Prime Holdings.
Time came when she thought it would be best to join the Truly Rich Club founded by Bo Sanchez so she can get expert tips. She was very thankful she joined the club because it helped her increase the value of her portfolio to twice of her monthly pay.
Awesome, right? And you know what, the earlier you begin investing, the more you can earn big. As they say, the earlier, the better. So, what are you waiting for? Learn more about how you can begin investing in stock market and real estate now.
The Most Applied Strategies in Real Estate and Stock Market Investing
When I think about the importance of strategies or techniques, whatever you want to call them, it makes me recall an important lesson in my life. It was when I finally decided and took it to heart that I want to become a real estate agent and investor.
When I was starting, I was curious about how others are able to get clients and convince them to buy a property without really having to do so much sales talk. I’d say, it was a highly analytical move because I was researching about it and talking to some of my colleagues who are performing well – closing deals here and there, hitting their quota, getting big commissions, and of course, earning more.
I worked hard and maintained a positive outlook. I learned to be very patient and articulate. Overall, I was a responsible and trustworthy real estate broker. But, I knew something was missing. No matter how hard I try, I wasn’t able to achieve the kind of success that others were enjoying. One day, I reflected deeply, pondered, and I realized, what was lacking was what they call, strategy. I was missing the system, the concrete plan.
I want to bring awareness and help others succeed in real estate and stock market investing too, and so, I am producing this blog post. Use this to your advantage and work hard.
Real Estate Investment Strategies
An Action Plan
Consider the “what if’s”. What if you buy a house and lot in Baguio City, a condominium unit, or an apartment, and sell it, but then it takes so much time before you find the right buyer. What if you intend to make that house or condo unit in Baguio your residence but something happened and you need to sell it. What if you like to make that house and lot a family vacation property but it will take you years to go back and enjoy yourselves there. Your action plan should include all the possibilities in your life in relation to your investment. But this ultimately depends on your purpose of real estate investment, whether for business, personal use, and others.
If you want to catch big fishes, it is very important that you connect and build relationships in many established and sought after investors’ clubs or organisations. Once you get in and meet the members, you will not only be provided with expert investment guidance but also a lot of sure leads, sure buyers, and sure investors. You’ll be glad you did.
Protect Your Portfolio
What will affect your portfolio or your property? Protect them from potential losses. How? This is where the famous saying applies – “Plan for the best and prepare for the worst.” You must have money set aside for whatever that might affect your real estate investment so you can recover fast when it happens.
Stock Market Investment Strategies
Do not just rely in one type of investment. Say, you have an online stock trading account now with established and highly reputable companies like COL Financial. You must also invest in mutual funds, real estate, and others. Spread your money in at least 3 forms of investment. This is the most effective way to grow your money.
Alert at All Times
Remember that the stock market is a volatile investment so it requires attention and careful study. Let’s say you’ve chosen to apply the Strategic Averaging Method or SAM. Since this method does not really require so much time and effort, it doesn’t mean that you neglect caring about the current market trend. It’s not just about investing regularly; it’s also about being aware and alert.
As they say, consistency is the key. You have to be very consistent with the method you’ve chosen. Be responsible with your action. If you use Strategic Averaging Method by the Truly Rich Club, founded by Bo Sanchez (the author of the best-seller book “My Maid Invests in the Stock Market”), take time to read and understand the stocks update, the SAM table, and more. Just be consistent with everything. Do what you’re required to do.
Congratulations! You are on your way to becoming a successful real estate and stock market investor now! Here are some more helpful articles:
· How to Earn More When Investing in Stocks and Real Estate? · How to Start Investing in Stock Market and Real Estate? · How Can You Earn from Investing in Real Estate and Stock Market? Why Invest in Stock Market and Real Estate?