There are a multitude of investment vehicles out there to choose from that can generate profits, with stocks and bonds being popular choices. However, non-tangible assets such as these are unstable and put an investor’s funds at risk. In contrast, hard assets create wealth that’s predictable and stable.
One such asset type is real estate, which can build lucrative income streams and won’t lose its value following the ups and downs of the economy. Additionally, many of the world’s wealthiest individuals have built their fortunes through investing in tangible hard assets such as real estate, and there are several reasons for this – let’s dive in and cover the most noteworthy.
The Role of Hard Assets in Wealth Creation with a Focus on Real Estate
If you’re looking for a way to build up your retirement fund or just create wealth in general, it’s essential to be well-informed on what asset type is the best vehicle to make it all happen. Most people who haven’t spent any time researching this topic end up investing in non-tangible soft assets such as stocks that sit in their 401(k).
However, when you really do your homework, you begin to see the light and realize how hard assets create wealth on a whole other level. This is especially true when the asset is in the form of a cash flowing rental property. Now, before we jump into how hard assets create and protect wealth, let’s first look at what this asset type consists of.
What is a Hard Asset?
In a nutshell, it’s a type of tangible asset – something that exists physically, such as real estate and precious metals. Unlike intangible, soft assets such as stocks, hard assets often have intrinsic value because of their practical use and physical presence. To break it down even further, a hard asset, such as a piece of real estate, is considered a performing asset that’s worth money and produces cash flow.
Factors that Enable Hard Assets to Create Wealth for Real Estate Investors
If your primary investment goal is to build wealth, placing your money in hard assets is the best strategy. Why exactly is this the case? Well, let’s find out as we explore how tangible assets can generate financial wealth and keep it safeguarded.
1. Hard Assets Keep Their Value Even When Wall Street Takes a Dive
Hard assets, such as real estate, have long been sought after as a vehicle for creating prosperity and achieving financial security. Why? Because a hard asset such as this has inherent worth that stays relatively stable, even when Wall Street tanks and brings everyone’s 401(k) funds down with it. A 401(k) is affected because this type of retirement fund is based on intangible soft assets such as stocks and bonds – paper assets that are essentially just numbers on a page. Read over my latest article on this subject, and you’ll see exactly what I’m referring to – Why the 401(k) is a Bad Investment Vehicle.
While Wall Street will go on unpredictable financial rollercoaster rides, year after year, rental property investments won’t follow suit. Instead, they serve as a tangible safety net, providing protection against the ups and downs of the financial markets. This, in turn, enables real estate investors to keep marching forward, knowing their funds can’t be drained or taken away from them.
After reading this, if you’re not convinced that having your funds tied to Wall Street is a bad idea, then take a moment to dive into my other article that covers the topic of Real Estate vs Stocks, or take a moment to watch the following eye-opening video:
2. Real Estate is in an Asset Class That Serves as a Hedge Against Inflation and Economic Downfalls
I think it’s safe to say that we’ve all been exposed to an economy that was destroyed by a pandemic and hit hard by inflation. During this time, millions lost their jobs, businesses closed permanently, shelves were bare in grocery stores, and it seems this pandemic and economic downfall negatively touched every aspect of life. Well, that’s not entirely true; rental properties stood their ground, didn’t crumble like other businesses did, didn’t lose their value, and rental income kept rolling in for investors.
In fact, while other businesses were closing down, Morris Invest was picking up speed during the pandemic. How can this be true? Well, many people were contacting us, desperate to place their funds in a safe asset class – and this was after they lost thousands in their 401(k) and, for the first time, realized just how unstable it was.
You see, real estate is not connected to economic windstorms, and the truth is that rental property investments rose above the storm. What do I mean by this? Well, during this economically challenging time, while other assets were taking a hit, rental real estate was in high demand, rose in value, and came out on top.
Today’s economic climate proves how strong this asset class really is because even with the current unstable economy and high inflation we’re experiencing, real estate is taking advantage of the situation with elevated rental rates and appreciation that’s building equity. As an example, rent actually increased by 7.6% in 2022 and 3.3% in 2023. This increase, as well as the boost in equity that occurred, has created even more wealth for those who own a rental property.
If you’re interested in reading up on gaining equity, then you’ll love this post – Investors Buy to Secure Equity as Home Prices Continue to Rise. Rent prices and property values are still skyrocketing, so it’s not too late to invest to capture equity and higher rents. Those who are thinking about moving forward, contact the team at Morris Invest. All you have to do is schedule a free call, and we can walk you through the process or answer any questions you may have.
3. An Income Generating Asset Such as Real Estate Creates Consistent Cash Flow
A true asset should generate cash flow, which is exactly what rental real estate does. It produces monthly cash flow like clockwork, an income stream that will actually outlive the investor. This makes more sense than living off a pile of cash from a 401(k) that will run out at some point during retirement.
The cash flow that accumulates from rental properties can also enable you to become financially independent and leave your day job or retire early, if that’s what you’ve been daydreaming about. I’ve created a few articles on these topics that I know you’ll find inspiring:
- How to Retire Early Using Real Estate Investing.
- 9-5 Job vs Rental Real Estate: Which Offers More Financial Security?
Power Resources for Investors
If you’d like to learn more about investing in real estate and growing your wealth, I recommend exploring the following pages.
- The Financial Freedom Academy
- Freedom Number Cheat Sheet
- 90-Day Financial Empowerment Bootcamp
- Morris Invest & SDIRA Program Overview
Harness the Power of Hard Assets for Wealth Building in Your Investment Journey
If your goal is to become financially independent through hard assets such as rental real estate, then the first step is to determine how many properties it would take to make this happen. Achieving this goal is simpler than you think – I put together a formula that figures it all out for you. This formula can be calculated through my Freedom Number Cheat Sheet, which you can easily download for free.
Once you determine your number, the next step would be to give Morris Invest a call so we can create a custom plan for you that will make your dream of owning cash flowing rental properties a reality.
Work with a Professional Full-Service Real Estate Investment Company
Our full-service real estate company consists of a team of experienced professionals who work with investors to help them become financially free, and we can do the same for you. When you work with Morris Invest, you’re provided with new construction properties located in the most lucrative housing markets. If you’re not up to speed on the importance of investing in the right markets, then dive into my article on Why Location Matters in Real Estate Investing.
On top of that, we take care of every detail, which includes helping you find the funding to make a purchase happen. For instance, we can roll over your 401(k) to a self directed IRA where your funds can be used as a down payment. In addition to this, we work with 200 banks to make financing achievable. We also place a property manager and tenant in your rental property – when we say we do it all, we mean business.
The bottom line is that we make it super simple for you to invest in hard assets such as real estate that will generate cash flow, build wealth, keep your funds safe, and set you on the path to financial freedom. Remember, we’re just a phone call away if you have any questions, need some advice, or want more details on our new construction rental properties.
Power Resources for Investors
If you’d like to learn more about investing in real estate and growing your wealth, I recommend exploring the following pages.
- The Financial Freedom Academy
- Freedom Number Cheat Sheet
- 90-Day Financial Empowerment Bootcamp
- Morris Invest & SDIRA Program Overview
Before you go, grab a cup of coffee and watch my video that covers investing in hard assets with a self directed IRA:
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