So… which is better?
Investing in real estate, putting your money in a savings account at a bank… or keeping your money in a shoe box?
You might wonder why I ask, but alarmingly I’ve been coming across a lot of people who STILL keep their money locked tight… inside their homes… vs. putting the money in a bank or choosing the best option of investing it into income-producing properties, one of the safest investments around.
Let me back up…
Lots of elders who lived through hard economic times figure it’s better to keep their savings in boxes, pillow cases, in the pages of books in their libraries, coat pockets and other interesting places around their homes instead of putting the money in the bank.
Think I’m joking?
Talk to friends who are tasked to go through an elderly loved one’s possessions once he or she has passed. For the sake of argument, let’s say your elderly aunt or uncle has passed. You’re probably in for a few surprises.
For example, a friend told me that when she was helping someone go through the personal possessions of an aunt that she found all sorts of money stashed away in odd places around the aunt’s apartment.
This same friend told me that she found hundreds of dollars “locked away for safe keeping” in the pages of her deceased grandfather’s books… random books scattered throughout the house on shelves, in drawers and on tables. (The horrifying thing is that he had never mentioned his habit of hoarding hundreds in books to anyone… not even his wife… and she had donated hundreds of books by the time the first few hundred-dollar bills had been discovered.)
So what’s happening here?
Simply it is a distrust of the banking system.
You may think this is endemic of one culture over another. But it’s not. It is more widespread in elders than in the general population, but it happens across borders.
And it’s not just with elders.
In fact, there is a trend that I’ve been watching that involves the rise in home-safe installations.
There has been a 40% increase in sales of safes for the home over the past few years. The individuals requesting the safes are not elders… far from it.
Here’s an article that sheds more light on this trend.
While the article talks about the trend being in the U.S., I promise it’s not just happening there. It is happening everywhere, because more and more people do not trust banks.
I mean… look at what happened in Greece not too long ago. (And it had worldwide implications.)
To refresh your memory, take a look at this.
And if that didn’t get you a little closer to understanding why so many people don’t trust banks and would rather keep their money in the shoe box, take a look at this.
Long story short, some people would rather stuff their mattresses with large paper currency than to hand it to a bank for “safe keeping” because it may not be so safe in the end.
After reading the articles I just shared with you and watching that short video about Greece, well, maybe you’re thinking about keeping your money closer to home.
Hey, I understand completely.
Since the returns banks give these days are so pitiful, with interest rates under a single percentage point in many banks across the globe, it’s hard to fault people for keeping their money anywhere else but in a bank account.
When looking at the shoe box vs. the savings account, the money certainly earns about the same interest.
So what’s my point?
I’m on a quest to educate everyone who will listen that there is a better thing to do with one’s money than put it in a low-interest-bearing savings account, IRA, other retirement account or in a shoe box on the top shelf of bedroom closet.
It’s called real estate… rather, investing in income-producing (a.k.a., “cashflowing”) properties in the U.S.
According to the National Bureau of Economic Research, foreigners like to invest in U.S. properties for several reasons…
“Foreign investors might choose to continue investing in the United States and financing the large U.S. current account deficit for several reasons. Indeed, they may choose to purchase U.S. portfolio investments in order to benefit from the highly developed, liquid, and efficient U.S. financial markets, and from the strong corporate governance and institutions in the United States — although both of these perceived strengths of the United States have shown some vulnerabilities during the recent financial market turmoil. Foreigners also may invest in the United States in order to diversify risk, especially if returns in U.S. financial markets have little correlation with returns in their own country’s domestic financial markets. Or, investors outside the United States may put their money here because of their strong linkages with the United States, through trade flows or such measures of “closeness” as distance, inexpensive communications, or sharing a common language.”
Because the returns in the States can be attractive beyond just the financial returns, and I understand these reasons well, I’ve created a bridge for European investors to invest safely in U.S. properties.
Currently I work with a strong network of likeminded real estate entrepreneurs in the U.S., which opens a vast marketplace to investors in and around Barcelona where I live and work.
If someone here wants to invest in property in let’s say Florida… I have people there who can help facilitate the deals.
If someone here would rather invest in Texas, California, Arizona, Tennessee… or in any other state, I know people who are ready to assist. It’s just a matter of setting up the team for the investor. (I would be part of that scenario.)
It’s pretty exciting to see what can happen when I bring the two worlds together, too.
Plus, I practice what I preach. I have investment properties in the U.S., and they are doing well. They cashflow a few thousand U.S. dollars per month and my property management is doing its job well.
It is my plan to have more and more properties there.
Now that I’ve begun sharing my vision and goals more openly, people in the U.S. are bringing me investment properties to consider… and I am building my pool of investors here in Barcelona and abroad who have expressed an interest in investing in properties overseas.
That’s what I call a win-win!
Truth is that there are many ways to structure a deal, and I can sit with investors, buyers and sellers to make sure each deal is structured in a way that brings the most value and returns. But that is a topic for another blog article!
That said, today’s topic here is a bit too big to cover adequately in just one article.
I’d rather just have a conversation.
If you’re interested in learning more about how you can invest in the U.S., CONTACT ME here. I’ll get back to you within 24 hours.
If you’d like to get to know me a little before asking me questions, join me at my next Cashflow 101 game. Sign up as a member of one of my MeetUp groups. I have two… one for ex-pats that I conduct in English and one for everyone else that I conduct in Spanish.
Here are the links: