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Wednesday, October 10, 2012

The Road to Real Estate Riches Series.

I'm starting a series of postings that will act as a journal for our Real Estate investing journey.
Our government is deflating the dollar at a more accelerated rate now with an open ended license to "print".  They are printing 40 Billion/Month with no end in sight.  This is good for paying down our national debt as the lower value of the dollar pays down more debt effectively, but it immensely hurts the American people.  The devaluation of the dollar brings rising commodity prices and cost of living overall. 

We do not have to worry about inflation, our problem is the deflation of the dollar.  Think about it, an ounce of gold back in the Roman days bought you a very nice Toga, a cool sash and head cover, and some good leather sandals.  Now an ounce of gold does exactly the same, you take it to Saks Fifth Ave and you get a nice $1200 suit, a stylish $300 shirt and tie, and some awesome $300 Italian leather shoes.  The value of gold hasn't changed, it just takes more dollars for that ounce of gold.

Throughout history, real estate has kept its value.  The home your parents bought in the 50s and 60s for $40K is now worth $400K.  The value of real estate is inversely related to the value of the dollar and the dollar has been deflating since it came off the gold standard.  As the deflation of the dollar continues, real estate prices will rise in this post bubble era.  And if the government is printing dollars to devalue its debt, we can do the same by getting a mortgage that will be easier to pay down in the future.

We have been investing in Real Estate for many years and realize its potential for the future from a cash flow point of view and from building generational wealth in general.  Everything is on sale now, so it is time to buy.  Once you realize the truths above, you will know you have to act now to ensure a good future for yourself and your family.

The million that you thought is needed to retire with your basic needs met, will not be enough and you will need more like two or three millions in a few decades.  If you are calculating your retirement number based on today's income and dollars, you will need to reconsider as today's dollar will buy you 50c worth of goods by the time you retire.

As I've said in previous posts, keep an open mind, and look for alternatives.  We are programmed to work, save, retire.  This will not do.  Open your eyes and smell the print presses.

Peace and profits to all.
@stockaddict