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People invest in the stock market because they are taught from a young age that it is the easiest way to invest money and expect gains over the long term. I have already covered that the S&P was flat between 2000 and 2010, so when you add in fees, you are getting crushed. Speaking of, how are these current stock swings treating you?
It is absolutely insane that people expose themselves to this type of volatility. When it comes to money, excitement is the last thing I am looking for. I want steady reliable returns without being exposed to unquantifiable risks. It is possible to achieve freedom from the stock market’s dramatic shifts that occur when events entirely out of your control arise.
As many of you know, the S&P downgraded the US debt for the first time since 1917. (Including the Great Depression.) Since then, the Dow Jones Industrial Average has experienced multiple 400-point intraday swings, which could cause unrepairable damage to your portfolio’s value.
Do you have any control of what the S&P does? What about the other the rating agencies that will soon downgrade the US as well? When you wake up and find out that some kind of political or economic situation took place that you have no control over, what are your first thoughts?
Imagine the comfort that is possible if you were not exposed to the recent drop in the overall market.
Here is the truth: It is possible to find deals yielding reliable returns with limited, if any, exposure to political struggles or stock market volatility. This is outlined in a recent post on why cash flow investing is a much less volatile and more reliable way to earn steady returns.
One of the most straightforward ways to make money in real estate is through first trust deeds collateralized by real estate at a low loan to value.
Here is one of the ways that it works…
A first trust deed, or note, is a way of collateralizing a loan. Let’s say the investor wants to borrow some money to invest in other properties that might yield him greater returns. He comes to you for a loan and wants to use the $100,000 house he owns free and clear as collateral. He only wants to borrow $65,000, but if he defaults on the loan, you get the $100,000 house. This is a called a 65% loan to value, or LTV. The interest on the loan will be 8%. This is 2-3 times the rate that bank CDs return.
This is a very typical investment that many passive investors consider to be the most secure way to make money in real estate. The way you can lose money investing like this is if the initial appraisal of the property is done incorrectly or the value of the property rapidly depreciates. Therefore, it is crucial to use a team like Cash Flow Connected with proven track record that operates in a non-volatile market. Remember, getting the correct assessment of the property’s value is the most crucial part of this whole operation.
In this example, the annual return is 8%. If your portfolio is yielding a reliable 8% return, it will double in 9 years. Based on the way your portfolio is invested right now, do you feel confident that you could depend on comparable results?
If you are interested in saying goodbye to the stock market volatility you have been experiencing, click below to get started today.