Protect Your Money: Get It Out of Banks and Into Assets Like Land
Since money plays a key role in our lives, its security must be guaranteed. One promising option is investing in tangible assets like land.
Unlike traditional banking products, land investments may go up in value over time, can be used for more than one thing, and can be spread out.
This blog post reveals how you can protect your money by moving it away from banks and into a fixed asset like property. We’ll discuss the benefits of investing in intangible assets, how to invest in land and share tips for successful land investment.
Why You Should Protect Your Money From Inflation and Invest in Safe Assets
A bank account was formerly thought to be a trustworthy and secure place to save your money.
Yet, a number of circumstances in recent years have demonstrated that depending simply on banks to protect your money is no longer sufficient.
Here are three reasons why:
Risk of Inflation
An economy experiences inflation when prices of goods and services often rise over time. This suggests that your money gradually loses purchasing power. While some level of inflation is normal, if it outpaces the interest rates you earn on your savings account, your money is essentially losing value.
Negative Interest Rates
Banks have started penalizing clients in some circumstances to maintain their money in savings accounts, a practice known as negative interest rates. You will therefore still lose the money even though you aren’t spending it.
The Potential Risk of Bankruptcy of the Bank
While rare, banks can and do fail. The collapse of Silicon Valley Bank (SVB) is a stark reminder that banks cannot always be trusted. SVB was one of the most well-known banks in Silicon Valley. It was started in 1983 to help technology startups and venture capitalists with their banking needs. Yet on March 8th 2023, the bank abruptly failed, cutting off customers’ access to their money.
Understanding Real Assets
Let’s examine the three categories of assets with economic value:
- An intangible asset is a valuable item that is not physical in nature. Patents, copyrights, brand awareness, trademarks, and intellectual property are examples of such assets. A strong brand identity is also among the most significant intangible business assets.
- Financial assets are current assets whose value comes from a legal claim to ownership or a contractual right. Investment accounts or mutual funds are an example of intangible financial assets, whereas a dollar bill or a bond certificate are tangible financial assets.
- A real asset is a physical asset that has tangible value and can be touched, seen, or measured. Examples include real estate, land, infrastructure, goods, and natural resources. These items are fixed assets since it is anticipated that they will continue to generate value for at least a year or longer. On a balance sheet, a long term asset is listed at its original cost, which includes the purchase price and any other expenses.
Benefits of Investing in a Land Asset
You can diversify your investment portfolio and safeguard your wealth by making land investments. Here are three benefits of investing in land:
Land is a tangible asset, meaning it’s something that you can physically touch and see. Owning land allows you the freedom to develop it and build on it, which might eventually raise its value.
Potential for Appreciation
Land can gain value over time, especially in places where the economy or population is growing. A return on your investment that is greater than inflation and other economic factors is possible if you purchase land in the correct location.
Land is a flexible investment since it offers a wide range of potential uses.
You could decide to build on the land for homes or businesses, rent it to farmers or ranchers, or use it for outdoor pursuits like camping and hunting.
You might be able to increase your earnings and lower your overall risk by having more than one use.
Tips for Successful Land Investment
Have a Clear Strategy
Establish your investment objectives when buying land, including whether you intend to develop the land or keep it for a long time. Research the market and location, and make sure your strategy aligns with your overall investment portfolio.
Land investment can be a long-term game. It’s crucial to exercise patience and not lose heart over short-term value fluctuations.
Manage Risks Effectively
Like any investment, investing in land carries risks. It’s important to identify and manage these risks effectively. For example, conducting due diligence on the property and location, understanding zoning laws and regulations, and considering potential environmental factors like flooding or soil contamination.
Keep up-to-date with trends and news related to the location and property, and consider seeking the advice of professionals like real estate experts or financial advisors.
Investors can possibly make a higher return on their investment and protect their money against inflation, negative interest rates, and bankruptcies by adopting actions to reduce risk and boost prospective returns.
Like with any investment, it’s crucial to conduct due diligence, consult an expert, and thoroughly analyze your unique situation before deciding.
Following these suggestions could help you safeguard your financial future and achieve a high return on your land investment.
The good news is that Discount Lots can help make buying land easier and more affordable. We specialize in connecting buyers to vacant lots at discounted prices. We cut out intermediaries and overhead expenses so that we can transmit the savings straight to our consumers, enabling them to purchase the land they desire without going over budget.
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