Investment Account or Investment Property

So, you have an IRA account. There’s currently $100,000 in it and over the years its interest will rise and rise, right? Do you know what else will unfortunately rise?

Answer: The rate of inflation.

A recent article shared by Sovereign Man addressed this exact topic and went as far to say that if you continue to hold your cash in a U.S. bank account, you’ll actually be losing money.

While it may sound farfetched, this is a harsh reality for many Americans.

With IRA’s only offering around 0.08% APY, a $100,000 account will only make around $800 in interest this year. We’d all love an extra $800 in our account for doing “nothing” but keeping our money somewhere, but inactuality by the end of this year you’ll likely have spent an extra $800 or more throughout the course of the year since the general price level of goods and services in our economy has increased, and continues to increase. You may gain in one account (your IRA) only to lose in another (your checking account or your day to day expense account).

So, what can you do? For starters, you can explore the alternative ways of making your money work for you. The thought of “emptying out” cash on hand to invest in property comes as a rather scary thought to new investors. But, if you visit our previous entry, Funding Your Retirement with Income Property, you can see that the difference in return between a savings account and an investment property is night and day.

In this particular entry (Funding Your Retirement with Income Property), we took a look at a 30 year old investor that wanted to retire at 60 years old. He purchased a $36,000 piece of property with $5000 needed in repairs. By renting the property at $1200/month, the property paid for itself within just 4.5 years. From that point forward, the property brought in about $9000 a year.

$800 or $9000? We know what investment tool we’d choose! But, owning rental property is not the right retirement solution for everyone. We encourage you to contact Graystone Investment Group by simply filling out the Investor Profile Sheet.

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