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Where do you invest?

I ask do to the fact that most people don’t know how to invest. The large brokers make you think that trading paper assets is investing. It can be, but there are more then just paper assets. Can you name the different asset classes?

 1. Paper assets: What is a paper asset? Stocks, Bonds, Mutual Funds,  ETF’s, REIT’s. So when the media says it time to buy real estate they don’t mean BUYING Real Estate they mean buy REIT stock. Why is that, because they don’t make a commission selling you real estate, commodities or a business.

Some would say that they like buying stock cause it is easy to get out of. It is, that is what make it more risky. How did you 401k fair in the last 5 years? Google the lost decade.

No tax benifit in this asset class.

 

2. Real Estate: Tangible properties. Many people are scared to do
this. They have heard all the horror stories of family members investing in real estate and a tenent trashed the place.
I will admit it, it has happened to me. Who’s fault was it? MINE, did not screen well enough and let some things slide, totally my fault. With that said I still invest in real estate. With more knowledge comes better investing.
You can also invest passively meaning you can invest in a syndication or partner with someone else and get a cash flow and all other other benefits of investing in Real Estate.

 

This is one of the asset classes that lowers your tax bases.

 

3. Business: Owning a company. Be your own boss. Do you want to be the boss? We all think we are smarter then the one in charge. Then why don’t you do it? Don’t have the capital, lame excuse find it. Don’t have an idea. Idea’s are everywhere.

This asset class means being in charge. Being the leader taking on responsibility most don’t want it. But they sure love talking about it. It might mean taking on debt, making sure income in coming in to pay employees.

At one point I had a argument with a women that a business owner and an employee take on the same risk. The employee does not take on the chance of bankruptcy. If the owner can’t pay you leave. If there is no income coming in you leave. Unless the owner has the capital to last no income.

This asset class is another that has tax advantages.

4. Commodities: Gold, Silver, other precious metals, oil, coal. Do you know what the gold or silver price was ten

years ago? Hell of a lot less then it is now. Precious metals is a good way to hedge inflation.

Holding precious metals is better then holding cash. Cash is inflated away while cash stays with inflation.
Some commodities have tax advantages and some don’t. If would like to purchase some educate yourself prior to purchasing.

 

 

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