Why Investing in Property-Backed Loans Might Be Safer Than Putting All Your Savings in Stocks

Investing wisely is important, especially when it comes to protecting savings meant for retirement. Many people hold cash or invest in stocks, hoping their money will grow over time. However, with the ups and downs of the stock market and the slow creep of inflation, these investments often don’t bring the returns needed to keep up with rising costs. But there is another way.

For those in the greater Triangle and Triad areas of North Carolina, an opportunity exists for investing in property-backed loans that might be safer and offer better returns than putting all savings in stocks. Here's why this option is worth considering.

The Problem with Current Investment Strategies

Many individuals have their cash parked in bank accounts or invested in stocks. Over time, though, inflation eats away at the value of their money. This means that what they can buy today might not be what they can buy tomorrow with the same amount of money.

Let's look at a few numbers: - On average, the official inflation number has been hovering around 3% yearly (we know its really higher). - Historical data show that stock market returns can vary but are often between 7% and 10% annually. However, in times of market downturns, these returns can vanish or even turn negative.

For retirees or those nearing retirement, these fluctuations can be stressful and even impact their lifestyle offerings. So, it's clear that relying solely on cash savings or stocks can be risky.

Agitating the Issue: Why Stocks Alone May Not Be Enough

When the stock market is up, it's easy to feel good about investment decisions. However, the rollercoaster nature of the stock market means your assets are often at risk. One year you could see significant gains, and the next, a substantial part of your portfolio might disappear due to market shifts.

For instance, the stock market can take a nosedive due to changes in national policies, an unpredictable global event, or sudden shifts in market sentiment. In these situations, individuals relying on stocks might find themselves needing to dip into their savings—sometimes at a loss. This cycle can lead to a downward spiral where you spend down your savings faster than anticipated.

Besides, bank accounts and standard retirement accounts often don't grow fast enough to counteract inflation. The returns in these environments aren't robust enough to help savings outpace inflation. Over time, this can result in a net loss of purchasing power.

The Solution: Property-Backed Loans as a Secure Investment

Unlike stocks, property-backed loans provide a different investment landscape. These opportunities aim to couple safer investment vehicles with reasonable returns. Here’s how:

Why property-backed loans matter:

1. Secured Investments: These loans are secured by real estate, meaning that in the worst case—if someone defaults—the property itself stands as collateral. This layer of security is something stocks can't offer.

2. Higher Returns: Property-backed loans often promise returns that surpass traditional savings accounts and potentially match or even exceed long-term stock market returns. Real estate investments can ultimately yield double-digit returns due to tangible assets backing them.

3. Consistent Income: Regular interest payments can provide a more stable income than dividends from stocks, which may be cut down in economic downturns.

What data and trends support this shift:

• The real estate market in North Carolina, particularly in regions like the Triangle and Triad, has demonstrated solid and steady growth.
• Property values have been appreciating at a consistent rate due to economic development and a growing influx of newcomers drawn by the area's growing industry, healthcare systems, and educational institutions.

How individuals can benefit:

Individuals looking to invest can partake in opportunities provided by companies like Blue Chariot, where their funds are secured by valuable real estate. By offering equity or short-term debt investments, these opportunities support those seeking sustainable returns.

Investors have the chance to: - Earn returns significantly greater than traditional savings options - Benefit from potential tax advantages that come with real estate investments

What if trends continue (or reverse):

• If North Carolina's real estate market keeps expanding, this growth could ensure steady returns on property-backed investments.
• Conversely, even if the market corrects in the future, the intrinsic value of real estate serves as a protection for the initial investment, unlike stocks which may vanish during market downturns.

Real Estate Opportunities that Match Investor Needs

Consider the potential for investing in property-backed loans as a way to safeguard your future. For those with funds from cash savings or retirement accounts not bringing ideal returns, this path offers a mix of safety and profitability that can be reassuring as one ages.

Even in times of economic uncertainty, the Triangle and Triad areas are showing promising growth trends, making them an ideal real estate investment hub. By exploring these options, individuals not only secure their funds but also often achieve better returns than other traditional investments.

---

Investors have a world of choices available, but protection against inflation and market unpredictability is critical. By considering property-backed loans within areas like the greater Triangle and Triad in North Carolina, investors can create a more stable and potentially more rewarding financial future.

Explore how real estate-backed investments can offer safer ground for your hard-earned savings, providing a solid bedrock for financial security and growth.

J.T. Smith - Blue Chariot Realty & Management

RealEstate #RealEstateInvesting #PrivateLending #PrivateLenders