Many people are under the impression that owning their own home is a good investment. In reality, owning your own home isn't really an investment at all. It's possible to make money through your home, but only if you're lucky. Also, it doesn't produce income, and anything which doesn't produce income is speculative. What this means is owning your own home isn't an investment, but
a liability. To create real wealth, it's important to make sustainable investments.
Jason Hartman believes inflation is going to go up at some point, and when it goes up, the federal reserve plans to use tools to control the inflation. However, inflation involves money production, and once the money is out there it's not going to be so easy to retract. The money will be difficult to bring back with certain presidents and congressman in office, because they're going to want the Roaring 20's all over again. It's good for elections. The way they'll try to control inflation
- Contracting the money supply
- Close the discount window
- Tightening credit
- Raise the reserve rate, making it difficult for banks to loan money
They'll try to do this, but with the amount of money being created now, and the amount
of money which will need to be
created to fulfill their $60 trillion obligations, they don't have control over long-term rates. It's possible to raise rates on credit cards, car loans, etc., but they aren't going to receive any support.
The Changing Real Estate Market
Nothing is bulletproof because everything changes. This includes the real estate market. One way to help create sustaining investments in a changing environment is by diversifying investments. You can do this by investing in different states and different markets.
We say to diversify investments throughout different states, but why not invest in foreign markets? Jason Hartman doesn't believe in investing in foreign markets because he's done extensive traveling throughout foreign markets, and come to the conclusion that America is just the best place to invest.
Macro Market VS. Micro Market
There are both macro markets and micro markets in the world of income property. Put simply, a macro market is a city, and a micro market is a neighborhood.
By diversifying your portfolio of income properties into a variety of markets, you'll be able to create a sustainable investment. Just remember to stay updated with inflation, and the changing world around us. (Top Image: Flickr | 401(K) 2012)
The Young Wealth Team