INSIGHT
INSIGHT
The Critical Role of
Property Investment
Towards a Sound Retirement
BY PIERRE VAN DEN BERG
Emotions are soaring and more money than ever before is finding its way out of the country . Reasons include politics , the unsure future of SA , and the weak performance of the Rand . But who are these few fortunate South Africans who have sufficient money to transfer or invest abroad ? Chances are they have put considerable effort into planning , and that property investment has most likely played a substantial role in their success .
Are the rest of us , including the average salary earner concerned about the bad economy , or even conscious about the impact on our future and retirement ? Or are we totally exposed to the mercy of circumstance with the only resolution left to hope that matters will improve ? I am afraid that most of us are caught up in this very unfortunate position , with nobody to blame but ourselves .
You can work your way for years to retirement , but if you have not invested and accrued wealth over time , you will only be left with a measly little payout , which will hardly cover the bare essentials . Some people even think [ or hope ?] that pension benefits will be sufficient to take care of them at retirement . Do you also have relatives who are a classical example of this scenario ? We all have to realise that it is a total ridiculous prospect to retire without having invested . This is why the majority of people become broke . Aggravating “ curve balls ” are the fact that we now live longer , and the “ evolution ” of disruptive technology , which will cause more and more people to lose their jobs in future .
Hopefully this is a wake up call for young people to realise the critical importance of investment and proper retirement planning . The good life and carefree days of your youth unfortunately end much sooner than expected , and you can easily find yourself
in above-mentioned scenario . Or are you guaranteed that your future inheritance will be sufficient and keep up with inflation to take care of you in your retirement years ? Then just hope that your parents are not already in a similar situation as discussed here !
In 1991 , and at age 27 I bought my first property . Up to this day I have found property to be an absolute winner investment strategy : – the physical and uncomplicated nature , the degree of control you have , assured yield , inflation beating , low risk , etc . On the contrary , I believe that most alternative investment products are becoming increasingly complicated , riskier and / or providing unstable yields - especially with the uncertain global markets nowadays . Way too many people still entrust their hard earned money to someone else or blindly follow their financial advisor .
Will the yield from my SA property portfolio keep up with inflation and global economic challenges to still provide me with a decent living standard for the next 20 to 30 years ? Three years ago I was advised by a visionary global investor to sell some of my properties to be able to buy into the USA property market . Not following this advice , I now realise the lost opportunity to have acquired at least one income generating asset in first world currency , and to have significantly improved my financial future .
As long as we learn from our mistakes or lack of action . A rewarding and wise strategy has always been to accrue assets whereby passive income can be generated . Additional to this , first world assets are becoming a necessity in ensuring your investment will provide sufficient future growth , and compensate for inflation and the weakening Rand .
RESOURCES
ThanksToProperty . com
64 JUNE 2016 SA Real Estate Investor www . reimag . co . za