Why should I Invest?
We all work hard to earn money to be able to have a comfortable lifestyle, do things we like to do like holidays, hobbies and save for our future when we retire and for our family. As we work hard to earn money we also need to make sure our money works hard for us after that.
Reasons to invest
- Financial freedom by creating a passive source of income
- Retire early
- Create value and assets for your family/kids
- Beat Inflation
With the right investment plan, you can create your own financial freedom in few years. Freedom to spend more time on things you wanted to do and not be completely dependent on your employer as a source of income. Create income and create assets which you and your family can use and benefit from over the years. The earlier you start the better it is as investments take time to mature and give good yield, we don’t believe in any overnight rich schemes.
So what is 1,000 euros worth in 10 years?
The inflation rate in EU/ Netherlands is around 2% on annual basis.
We assume the interest rate you will get in a normal bank will be around 0.5% (if you are lucky)
We assume your investments will generate around 6% which any good investment strategy should atleast deliver.
*compound interest in simple terms means that you reinvest your interest earnings back as investment. Formula used for that is always P*(1+r)^n.
The above shows why it’s important to invest for long term, even when the investment gets you only 600 euros in year one, it will help in building a long-term value for you.
Every investment has a risk connected to it so you need be aware of what those risks are. Its important to do your due dilligence and understand what those risks are.
This is one of the few investments for which you can get loan /leverage from a bank. Leverage help you to buy a property with small investment from your side and gives a much higher return.
Why do you think banks give mortgage to buy a house for investment?
Housing will always be one of the basic needs of human being, people are travelling more internationally, every year the number of international students are increasing. So the demand for housing is relatively stable which makes renting a business model for longer term.
Several factors like international universities, corporate tax structure, BREXIT make the environment for requirement of rental properties much stronger.
Properties can be active or passive business depending on your strategy. Rental properties can be outsourced to other businesses to manage which make it possible to have them as passive business.
Depending on the situation and if outsourced, income from rental properties can be under Box 3 which are exempt of income tax. Taxes need to be discussed personally as can vary from situation to situation.
You can rent, renovate, sell a property which makes it a controllable investment as compared some other investment options where you can influence very less.
Over a longer period of time, property has always shown appreciation in value. There are no fixed formulas to determine that as is based on several factors. This appreciation comes on top of your rental income and can be a very good bonus.
Due to the above factors, we strongly believe in Real Estate as one of the promising investment strategies. You create long term tangible asset for you and future generations. A property in a good location will always hold value and will be in demand.
Every investment is connected with risk and so is real estate, but with experience and a good strategy it has proven to deliver value for its investors.