Why Now

How Inflation is Killing Your Wealth

A major enemy to wealth creation is inflation. Some have called it a “silent tax” because often we don’t even notice its effects. Since we came off the gold standard in 1971, our dollars have steadily lost purchasing power. In fact, one US dollar today buys what 20 cents bought in 1971.

Take a peek at the graphic. You will note that the value of the currency (the torn dollar on the left) drops in relation to the number of dollars in circulation (the red line on the right.)

Will inflation continue to rise? It has to. Based on the commitments Washington has made to social programs, the presses at the Federal Reserve continue to run to keep up. This influx of more and more dollars into the economy just weakens the purchasing power of your dollars. It seems there is no end in sight.

If you are holding your assets in cash or accounts that are considered cash equivalents like money markets or CD’s, you are losing.

Its’ time to transfer your cash assets into something that will hold it’s value. Traditionally, real estate and precious metals have stayed ahead of inflation. Both of these asset classes reflect ownership. You posses your assets, and they aren’t being devalued by the printing presses at the Federal Reserve. These assets secure your principle. Done correctly, they are safe and secure. We will show you how to do it correctly.

Market Timing Is Now

“Timing is everything” and this continues to be true in the real estate market. Today we have a special window of time for great returns. Prices are so very low, financing is at historically low rates, and rents are still high. This combination creates big return potential, both in monthly returns on your investment, and in appreciation potential.

The net returns on our cash, called “cash on cash” returns are very high based on a concept called “price to income ratio.” This measures what we would pay for a piece of property that is going to pay me $900 per month in rent. In some markets, it is $150,000. Other markets it is $70,000. Your “price to income ratio” is much better in the city where you only paid $70,000 to get the $900 in rent.

As the prices go up, the returns on our cash drop. We commonly see properties that pay “cash on cash” in the 14% range, but as the prices increase $5,000 or $10,000, those “cash on cash” returns drop down to 11 or 12%.

Right now we see properties priced so low that there is instant equity built in because the cost per square foot is so far below the replacement cost that the properties have a high probability to appreciate back to the historical standard of value-replacement cost.

Don’t wait just for the sake of not deciding. Preserve your purchasing power. There is a high cost of waiting. Let us show you the difference, it is significant.

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