I find it fascinating that no one is talking about how many governments around the world are now bilking savers.
Negative rates create much larger windfalls for governments issuing debt because they actually get paid interest instead of having to pay interest on bonds they sell to investors.
When governments pay interest on debt, they get a portion of it back through the tax lenders pay on interest they earn. Conversely, with negative rates they get to keep all the interest their lenders pay them. Welcome to the “Bizarro Economics” era!
What a marvelous way to stick it to your citizens, especially those who can least afford it. Negative rates kills savers and any dream they have of any adequate retirement income.
With now pathetic corporate pension plans – that is if your company even offers a pension plan these days – constant cut backs to healthcare, social assistance and other government services and even further austerity measures in some countries that continue teetering on the precipice of defaulting on their debt, or worse, this should be yet another wake up call to those who feel that they can depend on their governments to take care of them post retirement.
Very few seem to be talking about the fast approaching retirement crisis. With the exception of the very lucky few who may have sufficient savings to get them through retirement, that is the top 5% richest of the population, the vast majority of the remaining 95% still expect their cash strapped governments to take care of them in one way or another through their retirement years.
Make no mistake, this crisis is coming. It is unavoidable and will be here well before most even realize it. Most people dream about their post retirement life. Yet the reality is that they can forget about the “life” part. Instead, they should be more concerned about how they will be able to afford merely surviving through retirement.
To be sure official government inflation figures in both Canada and USA today are low. But ask anyone who has been to a grocery store lately or had to pay rent or needed to buy an appliance recently how much more they had to pay for the same goods and services – you know, those things that people actually need and not simply want – than even a year ago.
In the meantime, wage and government social assistance payments have remained nearly flat over the same time period. So essentially, most people are earning the same amount but have to pay more for the things they actually need to survive.
Is it not time for people to wake the **** up to this new reality?
This is why my clients and I truly believe in cash flow positive residential real estate to protect ourselves from the looming retirement income crisis.
If current historically low interest rates and positive cash flow, which by the way currently handily beat anything we can expect to earn in a savings account these days, are not good enough, than the prospect of negative interest rate mortgages, where lenders actually pay you to borrow their money, tenants paying down our mortgages monthly (as the icing on the cake) and appreciating home values that historically exceed inflation rates (as the cherry on top) make these practically recession proof, absolute no brainer investments today.
And here’s a dirty little secret no financial planner, stock broker or dealer will ever tell you. With these types of investment properties most people would have a much more realistic way of actually achieving their financial freedom and retirement goals combined much lower risk than almost any other investment or strategy out their today. No stock, bond, ETF or mutual fund financial planner can honestly say the same for the products they peddle.
In fact, not only will portfolios utilizing this investment strategy likely cost you hundreds of thousands of dollars less to acquire, they also offer much more stable income regardless of whether the economy is booming or in a recession. Better still, unlike traditional stock, bonds and mutual fund portfolios, even if those same assets never go up in value you can still achieve your financial freedom or retirement goals.
Here in Canada, the maximum Canada Pension Plan (CPP) benefits one can hope to receive today is just over $13,000 per year. Yet what most people do not realize is that owning even one single family investment property can very easily effectively double your CPP retirement pension.
Still not convinced? Well, I have not even told you what the best part is yet.
Unlike RRSP’s and traditional stock and mutual fund investing, you can realistically accomplish all this without ever touching any of your initial investment, principal, capital or even any built up equity in your investment property. In fact, this is very achievable even without any appreciation in value to your underlying investment property.
The key is knowing where to buy these real estate investments gems, which properties work and which do not. This is where a real estate agent specializing in investment properties, who also practices what they preach and are also themselves actively buying similar properties in the same areas is absolutely critical.
When purchased right, not only do these investments work today, they can continue to work for investors and their loved ones practically forever, with the added bonus of relative immunity from domestic and international governments and central banks shenanigans along with their broken promises and dreams.
Those who wish to learn more about these types real estate strategies can start by visiting: www.Cash4LifeCanada.com to get a FREE copy of a Real Estate Investing Book that Sells on Amazon.com for $24.95 at: www.Cash4LifeCanada.com