Over time, inflation tends to weaken a consumer’s purchasing power. Fortunately, there are methods for safeguarding your money’s purchasing power, which involve investing while maintaining a moderate level of risk.
We’ve witnessed our parents, older siblings, and other family members purchase a home. It has broadened our horizons. Even hearing about real estate transactions from friends contributes to our knowledge. Self-indulgence, on the other hand, is priceless.
“The best investment you can make is an investment in yourself…The more you learn, the more you’ll earn”
Imagine earning the same pay as your grandfather 40 years ago. This is one way to think about purchasing power. To maintain the same standard of living now, you would need a significantly higher salary.
Now think about bigger purchases. If you were purchasing a house for $300,000 in 2000, it would require $650,000 in 2020. Remember, house appreciation is not taken into account here. Changing purchasing power and dollar value matters the most due to inflation.
You may have many questions like Where, When, and How to safeguard your purchasing power with excessive inflation?
BuyProperly.ca is ready to answer your questions and advise potential investors to get legal and financial counsel before committing to property investment. We also ensure that the investors are fully informed of purchasing power, investment strategies, economic dangers and legal responsibilities.
Investment properties are not considered primary dwellings; they bring in money through dividends, interest, rents, or even royalties that aren’t part of the property owner’s usual business. And how you use investment property has a powerful impact on its value. Investing in properties has many advantages like sole management, added income, capital growth, less volatility than shares, and tax deductions. It is a tangible asset that provides a continuous increase in income, creating a comfortable feeling.
A long-term or short-term investment can be made in an investment property. With the latter, investors frequently participate in flipping, which is purchasing real estate, remodeling or renovating it, and then selling it for a profit in a short time. Investor purchases assets for future appreciation, such as art, securities, land, or other collectables, which are also considered investment properties.
Already assessed your financial situation to jump on investing in a property?
BuyProperly.ca provides you with complete details of the investment properties, investment advice, and useful guidance for purchasing the property.
Invest in Real Estate
Why should you invest? Why not continue to save and then utilize those funds to purchase “assets” directly? This will be lovely, but it is not a good idea to save money. Why? Savings are squandered too quickly for two reasons: (a) they are spent too easily, and (b) money invested multiplies too quickly.
Where ordinary people can put their money?
Mutual funds, equities, real estate, gold, and other investments are all available. Bonds, stocks, savings and cash are severely affected by inflation, but real estate has historically manifested as an attractive hedge against inflation.
The most typical method of investing in real estate is to buy your own apartment or house. For years, homeownership has been a forced savings plan for sloppy savers. You ought to have a decent amount of finances to invest in since real estate in Canada is not cheap.
A stable and long-term real estate investment is considered an excellent option for preparing for your life journey. BuyProperly.ca not only safeguards your money but also helps you to multiply it.
However, real estate investing has quickly become a more speculative endeavour for many. Those who want to invest in real estate without risk can look into real estate investment trusts, or REITs, which are businesses that sell shares in their various real estate properties. REITs also provide significant tax advantages that neither property ownership nor stock or bond investments can match.
BuyProperly.ca has come up with creative solutions to almost these usual roadblocks, allowing you to invest in these homes with minimal effort and paperwork.
REIT (real estate investment trust) is an entity that owns, operates, and/or funds incomeproducing real estate. REITs are regarded as secure since they are managed by seasoned investors familiar with the market and can protect your money. REITs pay out significant dividends and have high yields. You get a portion of any profit they create as a recurring dividend, minus costs. Some REITs invest directly in real estate, earning rental income and management fees. Others invest in real estate debt, including mortgages and mortgage-backed securities. However, owning and operating multiple properties will average their longterm growth. They also carry the same risk as a single firm investment.
BuyProperly.ca is a bit different from a REIT. We enable you to increase and diversify your wealth by investing in real estate while removing a bank mortgage’s upfront income/cost barrier. It’s also impervious to short-term shocks and stays out of the basics of rental management.
Investment Funds (ETFs)
Buying exchange-traded funds, or ETFs, is one of the cheapest and easiest ways to diversify a stock portfolio. It is a task that a computer programme with the most ETFs track the performance of an index, a specific economic sector (such as healthcare, industrial, or energy), or even a global market. So, you might own a fraction of the stock market’s most valuable companies for a single payment. You can invest in ETFs through
online investment providers, which offer cheaper costs than big banks or traditional investment firms.
Stocks generate passive income, increase in value, and generous payout dividends, representing a portion of the company’s profits. Anyone can buy these tiny amounts called stocks of a public firm. Stocks are inherently unpredictable, and while you can make a lot of money, you can also lose a lot. Look for dependable firms that pay dividends, acquire stock, and take advantage of dividends. You can use an online broker or go the traditional route to trade online. Quarterly, semi-annually, or annually, dividends are usually issued. However, keep in mind that not all firms pay dividends, and you may have to go without dividends some years because they’re only given when the company is profitable.
Improve Your Investment with Low Risk
Bonds provide consistent returns and are less risky than stocks or other investments. Bonds are government and financial institutions allocated promissory notes, and a bond is a debt tool that may be bought and sold. A broker or financial advisor can help you purchase bonds available from some banks or the issuing government.
Most automated investing services, also known as robo advisors, accommodate investors with any risk tolerance or investment horizon by creating a diversified investment portfolio. The automated investment includes various types of assets in a combination that reflects your personal goals, ranging from higher- risk stocks to more conservative bonds.
The finest robo advisors will provide high-interest savings accounts or growth portfolios stocked with low-cost stock ETFs for those who can’t afford a penny of their money. Robo advisors offer opportunities for high returns for those with the most extended investment horizon and highest risk tolerance. The best choice will include no account minimums, cheap management fees, and free unlimited phone help with investment specialists, all at the minimal expense of hiring a financial advisor. Many robo-advisors also provide a wide range of investment products and accounts, including retirementoriented, tax- advantaged accounts like tax-free savings accounts (TFSAs) and registered retirement savings plans (RRSPs) (RRSPs).
RESPs are tax-free savings accounts for parents who desire to put money down for their children’s post-secondary education. The Canadian government donates 20% of the first $2500 per recipient per year, up to $500 per beneficiary per year. The main benefits of RESPs are the permit they give to the Canada Education Savings Grant (CESG) and as a form of yielding tax-deferred income.
Registered Retired Savings Plan is a savings plan enrolled with the Canadian federal government that you can use to save for retirement. If you invest in an RRSP, you can claim a tax deduction, and RRSP earnings are not taxed until you withdraw them. Because investments in your RRSP are tax-deferred, the overall value may increase. You will most likely be in a lower tax band when you start withdrawing funds in retirement.
You could be a great initial coin offering (ICO) investor. The term “hypothetical” barely scratches the surface of the dangers of investing in new crypto currencies. True, some fortunate investors made a lot of money in Ethereum’s ICO or crypto currency. Still, since then, the number of offers has grown to the point that there are many of them every month, and ICOs have become a preferred tool for pump-and-dump mountebanks. Crypto currency is the “best” investment alternative, but we can’t stress how cautious you should be before investing in any initial coin offering.
Tax-Free Saving Accounts (TFSA)
Tax-Free Saving Accounts (TFSAs) apply to individuals in Canada aged 18 and above. TFSA is a type of savings plan account or investment financial account that holds certain investments, including mutual funds, securities, bonds, and cash in the account that is not taxed, and withdrawals are tax-free. It is an account from which interest, dividends, capital gains, and contributions are tax- free, and as gains on investments in the account are not taxed, TFSAs allow you to save money on taxes.
Invest in Farmland
Farmland is a real asset that can be easily bought and sold, making it suitable for passive income. The demand for agricultural goods is constantly expanding, and farmland prices in Canada have been rising at a 10% annual rate. Farms are a more appealing investment than stocks, which average a 7% annual return. Additionally, they can rent farms to generate income. Some landowners choose to plant crops and earn
passive income by enlisting the help of a team. This may not appear to be a passive income, but various management companies can look after your land and give you a set amount of money each year.