Expert Tip: The Best Way To Invest $100k
Ok, I’m going to start the webinar with this question…
What would you do with $100,000? If $100,000 was given to you tomorrow, maybe you won it in the lotto, what would you do with that money?
Now, your answer that you give will be a reflection of your wealth creation education.
One option is to put that money in a savings account, nice and safe.
Another option might be to put it into shares.
Another option might be to go and buy a property at 80%.
Now, there is a rule that says “never borrow more than 80% so you can avoid paying mortgage insurance”. Now, that’s a rule that’s out there, I don’t agree with it and I’m going to demonstrate to you why later. But some people like to follow that rule.
And the fourth option might be to buy two properties with the absolute minimum deposit and maximum lending.
Let’s have a look at what would happen if we followed each of these options in turn.
Now, the first option is do nothing, put your money into a savings account. And most savings accounts you’d be lucky at the moment to get 3% interest. So, let’s see what would happen to $100,000 if we added 3% every year for 10 years. The bottom line is, we’ll end up with $134,000.
Now, what a lot of people don’t understand is that inflation in this country is controlled by the lifting and lowering of interest rates. And the target inflation is 2-3% per annum. So, if you’re putting your money into a savings account, you’re basically doing nothing with it because the 3% interest you will receive will be taxed as earnings, so you’ll lose a third of it to the tax man, but also, and we haven’t taken that out of there, but also you’ll only be keeping pace with inflation anyway.
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