First of all, before diving into any type of investment whatsoever, the very first advice is to educate yourself. Why? Because there are a lot of people out there who are calling themselves to be experts, and they will gladly take your money away with the excuse to grow your portfolio or grow your money.
You have to know how to identify them. You have to know how to pick them, how to select them. Otherwise, you’re just practically giving your money away for free, and helping them pay their rent and helping them pay their bills. Why should you? You’ve worked very hard to put that money away, to save that money away.
Let’s assume that you, in fact, do have $30,000 in your bank account. You have your bank account and you are debating: “Should I leave my money there? Should I take it out?” Well, you shouldn’t leave it there. Why? Because interest rates are nearly down to zero. If you leave your money there the bank is going to lend it to someone else.
What to do with your money during a crisis: Real Estate
What’s the next option for you to do? The tricky part about real estate and investing in real estate in times of crisis is the fact that you will need a lot of cash. Why? Because at this point in time, banks are actually tightening up their lending process. They are being very meticulous. They’re being very difficult to deal with in terms of lending money.
If you’re looking to invest in real estate, you better hope that this $30,000 in cash that you have will be enough to invest. If not, you’re going to have to explore some other alternative options.
Some of them can be working with a hard money lender. For those who don’t know, they’re basically private investors who are willing to lend you money at a rate of 10% to 12% interest, so that you can use that money and invest. They’re typically short-term loans. If you want to work with a hard money lender, you have to know for a fact that within a year you have to repay that money back.
Invest your money in the stock market
Remember what Warren Buffett said. Investing in the stock market, it’s all about buying low and selling high. This, if anything, is the perfect timing, you want to wait until that goes to the lowest point as possible, the lowest point that you can take, and then immediately go in and buy low so you can start selling high once the economy recuperates.
The beauty about these two investment strategies is that you get losses. You’re probably wondering, “What? Get losses? How is that wonderful?” It is, in fact, very wonderful. Why? Because the US tax code rewards losses. It rewards them. How? Through deductions. That’s basically what it is.
Stocks can pay you big dividends and are a very good way to invest your money
For example, you invested your money, and then at the end of the year, you ended up making $50,000. At the same time, during that investment, you also lost $10,000. Let’s say you made a very bad move in the stock market. You’re going to get a deduction of $10,000, and that means that your taxable income will only be $40,000. What do you prefer? Do you prefer to pay taxes on this $50,000 amount? Or do you prefer to pay taxes on this amount?
What if you know someone who has $50,000 safe in their account, and he doesn’t know what to do with it? What is the alternative option? What are his options during a time of crisis?
The four components to have in your investment portfolio
In the book, Why The Rich Keeps Getting Richer. Robert Kiyosaki talks about four components that are very important to have in your investment portfolio.
- One is to have a cash loan business.
- To have investments in real estate.
- To have investment in the stock market.
- Invest in gold or silver.
You might wonder, why those two metals in particular? These two metals have managed to survive hundreds and hundreds of civilizations. There is not a single history book that you open up where you don’t see gold as a form of currency.
It has been the only form of currency that has survived. It has surpassed the dollar. It has survived any other paper currency that you have ever heard about in history.
When you invest in gold and silver, you’re basically protecting your assets. You’re protecting the value of that money. You are preserving that wealth that you worked so hard for to maintain.
Now, you might wonder, “Okay, so how do I know exactly what type of gold to invest?” You can’t just go up and buy a random metal. The goal that you’re going to focus on is the one that is 99.9% pure, and that’s also popularly known as the 24-karat gold. Those are the ones that are going to be the right investment for you.
Why do you want the 99.9%? Because that’s the level of purity. It is 99.9% pure, which means you’re purely buying gold. The remaining 0.1% that you see right here, it’s because that gold needed to be mixed with some kind of metal in order to keep its consistency because gold is very malleable.
Malleable It’s a metal that can be shaped into pretty much anything. It’s easily shaped with just your own strength in your hand. In order to keep that form, you have to mix it with something else.
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