For many years, buying an investment property has been seen as the way to a secure retirement. Once you get your mortgage under control, you use your savings to acquire additional property and rent it out to help cover the mortgage. Then property values rise, and a few years later you sell your investment home for a tidy profit.
Sounds Great, Doesn?t It?
Of course, in Australia, a $400,000 home will yield around $400 a week in rent. Let?s see. If you borrowed all the money, you would be earning $1,800 a month. You would pay $2,300 in interest on the loan, $150 a month in rates, plus 7% or $126 for agent?s fees, and maybe $100 a month for maintenance, providing your house isn?t trashed by bad tenants. Let?s see that makes a loss of $776 a month. I know, you can claim some of that on your tax, but you want an increase in value of 2.5% each year just to break even. Oh yes, don?t forget that entry and exit fees from purchasing and selling the property will set you back around $20,000 as well.
Real Estate Investment Is Risky Business
The reality is that this is high stakes gambling as many in the US and Europe have discovered in the last few years. We hear of the success stories, but not the hoards of people who lost their retirement income when it didn?t quite turn out the way that dark suited gentleman predicted. What if no one wants to rent your property? What if it is trashed? What if it remains empty for a few months? There is a commercial property near here that was but around 10 years ago and has never had a tenant. What happened to that poor investor? If the bank forecloses you will lose more than your investment ? much more!
The MLM Model
Here is a challenge. Many high flyers in MLM see it as a low risk, high return investment. It is true that you need a passion for the company and products you represent, but you don?t need $400,000 to get started! You are building an asset that you can sell at a later date. Your monthly outlay is typically a little more than $100 these days, and there is no other financial risk involved.
I made $400 in my third month with MLM, and within a year I was earning over $350 a week, simply by sharing my story and that of the products I represent. At the end of that year, with a small investment, and that monthly order which I could on sell, I was adding over $1,000 a month to my retirement fund. Not losing money as in Real Estate, but making it with minimal risk.
Which Would You Choose?
I make far more than $350 a week these days, and it doesn?t take that much effort to maintain it. My loyal band of distributors love the products we offer, and are busy building their extra $1,000 a month pin money. All this with minimal investment. The risk ? zero! Now when I have an extra $100,000 from my MLM income, sure I will look at investments. I just think that building an MLM on the side is a much sounder way than putting yourself in a position where you might lose your house or end up bankrupt.
Read More:http://johngaydon.com/business/opportunity/real-estate-investment-is-it-better-than-network-marketing/
So what would you choose, real estate investing or network marketing? Just so you know, both fields are really risky. However, if you pick real estate investing, then you should know that you are more likely to lose more than you would have earned in network marketing. Starting one?s own business in network marketing is relatively easier too because network marketers don?t have to pay big bucks to start.
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Source: http://gillistern.com/488/real-estate-investment-is-it-better-than-network-marketing/
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