Chris's Classroom
Money = Awesome, Money = Worst Investment. Money is like Bread.
Being wealthy isn’t created by having heaps of money, in fact, having heaps of money would mean you are probably only going to be wealthy for a short period of time.
Being wealthy means having a way of creating money, or a continuous cash flow that will be ongoing and increasing for the rest of your life.
You only need to track most lotto winners results after a year or two to work that out.
Money is like bread! Why?
Because bread goes old and mouldy and becomes worthless over time, and so does money. Let me explain.
If you were to work out you needed to buy 2 loaves of bread each week to survive a year comfortably, you would know that on the 1st of January you wouldn’t go out and buy 104 loaves of bread and stack it in the pantry and say - Yes! Job done!
We know the bread would only be fresh for a day or two and then start to deteriorate.
Money is just like that. Stacking money in the bank, in a term deposit or a high interest saver, even a managed fund is just like putting bread in the pantry and waiting. It is going to devalue over time.
That is because the cost of living goes up.
Anyone retiring on money, shares and managed funds is going to run out of money long before they will run out of life, simply because they will be living off the income or return on the money, the value of money will decrease because the cost of living goes up and you will draw more of the money out to continue to live. A recipe for going broke – quick.
Just like you need fresh bread each week, you need to have your investments giving you fresh money each week, ongoing and increasing for the rest of your life.
Sounds like a magic refilling jar from a children’s book, right?
Property does this. The reason I have chosen property investing to retire on is that it is the only investment option I have found that will give me an ongoing increasing income for the rest of my life.
While the value of money goes down over time, because the cost of living goes up, the value of property goes up over time and rent goes up with the cost of living. Therefore, property, and the rent from property will give you an ongoing increasing income in retirement. Sounds simple doesn’t it.
The next issue is ‘which property’… and there begins a whole new story.
Have a great week!
Chris Childs
