What kind of asset?
The simplest asset class classification is stock, fixed interest, property, or cash. Those classifications can be divided into numerous sub-classes such as houses, units, offices, factories (property), or even houses in the United States, Queensland, Perth, etc.
What may surprise many investors is that the real property you choose is not the most important decision! It is much less important than the decision to be exposed to an asset sector. In other words, whether a fund manager selects an industrial investment in, say, Poland or a retail investment in, say, Sydney or a house in Perth is a far more important decision than individual properties within that asset class. Why? Because if the demand for industrial space in Poland falls, none of the properties within that asset sector will increase; if Perth’s residential market goes up, they all go up.
The Australian Financial Review reported the opinion of the head of Macquarie Investment Management, who said that “asset allocation, rather than stock selection, is the key to creating sustainable wealth.” It is essential, for property, to invest only where there is positive population growth.
Because, according to Dr. James Skinner of the University of Queensland’s Applied Population Research Unit, population growth of 50,000 creates a need for approximately…
* 18,000 new homes,
* 600 new retail stores
* 450 hospital beds,
* 125 new doctors,
* 25,000 additional cars.
Have you ever wondered why the minority gets rich while the majority struggles? It’s because the rich understand these principles and invest their (usually borrowed) money in assets that rise in value, while the poor invest their (usually borrowed) money in things that make them feel rich but decline in value (like boats). , automobiles and various fashion products).
This is the essence of wealth creation. Invest in assets in growth areas as soon as you can and don’t borrow for products that lose value. If you want to become a millionaire overnight, then property is not for you. However, if you’re prepared to take 10-20 years, then ownership is the answer.
The property works even though it will never be perfect. You’ll never find the perfect home or the perfect financing, but you’ll find a vehicle that gives you financial security. Don’t get carried away by panic reactions to short-term fluctuations, ignore exaggerated media headlines and hang in there. You will find that long-term investment in properly financed residential property is a “loss-proof” investment.