Alternative Investing
Investing is such an exciting buzz word today isn’t it! If that’s the case, why are people so hesitant to invest? Did you know that approximately 52% of Americans do not invest in the stock market today (according to Bankrate.com)? What does that tell us? Well, Americans see themselves as “savers” and worry about their capital preservation. They don’t take risks necessary to achieve the returns that they need to satisfy their retirement goals. A lot of money has been pulled out of the Stock Market since the crash of ’08 and has been put on the sidelines just anxiously waiting for the next opportunity. Why are they not putting it back into the Stock Market? According to Bankrate.com’s survey, the main reason they don’t invest in the stock market is that 53% of the people don’t have the money and 21% don’t know about stocks. Another 9% say they don’t trust stock brokers and 7% say stocks are too risky. So what happens to all their money when they don’t invest in something? Well if it sits in their savings account it is probably earning less than 1% yield. If they put it into a CD it might get 1.8% yield. So if the US inflation rates are 1.8% – 2% for 2016, they are actually losing money if it sits in any of these scenarios.
Here is where Alternative Investments like real estate debt (notes) can achieve high returns with minimal risk. How is this you ask? Simple, people pay on a mortgage for their home right. That is essentially what investing in real estate debt is. Insert yourself where the bank or mortgagor is in the previous statement. So you are receiving the monthly payments at that interest rate. I will give you a quick example so you can see the numbers…
Home Value: $105,000
Down Payment: $5,000
Mortgage Amount: $100,000
Interest Rate: 6%
Term: 15yrs
P&I Payment: $843.86
It doesn’t take you long to figure out that after 15yrs you will have received 180 payments of $843.86 which equals $151,894.23. An amazing way to earn 6% yields over a 15yr period and doing absolutely nothing but watching your account grow. The risk is minimized due to the fact that your security instrument is the actual real estate itself. If you have stock in a company and that company goes under, unfortunately you lose your entire investment. As you are not backed by anything.
Now that you can see the value in Alternative Investing, isn’t time you put that stagnate cash to work for you? Creating wealth through long-term positive cash flow is financial prosperity!
Justin Bogard, President
BrightPath Notes, LLC
www.brightpathnotes.com
