Evaluating Investment Opportunities

Evaluating Investment Opportunities

There are plenty of investment options out there, but are they good investments? Thanks to the sheer volume

of selection, and a little bit of  false advertising, choosing an investment can sometimes be a daunting decision. Here's some insight on potential investment opportunities.

The Stock Market, a Casino?

One of

the top investment options which comes to mind for most people are stocks and bonds. However, stocks and bonds are risky. They take you out of control. What you end up with is an unpredictable investment with little leverage. The investment provides little or no tax benefits whatsoever. It's a lot like a casino. Stock is only worth something because the company says it is. It's also worth money because the market backs the company or the stock up, but the market is manipulated constantly.

The stock market is essentially a casino. This is because the vast majority of people who invest in stocks actually lose money. People who are invested in the stock market often get lousy returns, while big institutional investors get rich with stock market investor's money. Not a good deal.

Businesses, a High Risk Proposition

What about starting a business as an investment opportunity? It's possible to make decent money from a business. However, businesses are extremely complex. In Jason Hartman's words, “they have too many moving parts.” He's no novice in the business world; he's had one of his own for 12 years and believes starting a business is a high risk proposition. They're

tough to succeed in.

Many income property investors don't enjoy dealing with tenants, but employees can be even harder to deal with. Tenants you have to see maybe once a month, less if you hire a property manager, but employees generally have to be seen and interacted with each day.

Not to say businesses can't work. They can. Many people have become wealthy by building their own businesses. If you're lucky, talented, well-capitalized, and have an efficient strategy in place, your chances are not bad. However, statistics aren't in favor of business investments.

Advantage of Income Property

Jason Hartman continues to believe that income property, specifically residential property, is a universal need. It's a real asset, essentially a set of packaged commodities which are in demand around the world. It has multiple benefits, such as:

  • Great financing.
  • Exceptional tax benefits.
  • Leverage.
  • Protection from inflation.

It protects against inflation in two ways. The first gives real estate investors an advantage. When inflation goes up, so does property value. Next, the debt you owe actually declines in value with inflation. The tenant pays your loans, and you're in direct control of your asset. (Top image: Flickr | Triin Q)

The Young Wealth Team