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The cost of doing nothing

Posted by Paul Wilson

For those of you who have ‘thought’ about investing for a while now, I’m confident that after reading this you will want to turn that thought into action.

Many people feel content doing nothing, because doing nothing involves no risk at that moment in time. This many mean you feel ‘financially safe’ because no major financial decisions are being made.

However, the fear of missing out should be greater than the fear of doing something, and you’re about to find out why.

There’s a famous legend about the origin of the game of chess that goes something like this:

When the inventor of the game showed it to the emperor, the emperor was so impressed by the new game that he said to the man, “Name your reward!”

The man responded, "Oh emperor, my wishes are simple. I only wish for this: give me one grain of rice for the first square of the chessboard, two grains for the next square, four for the next, eight for the next and so on for all 64 squares, with each square having double the number of grains as the square before."

The emperor agreed, amazed that the man had asked for such a small reward - or so he thought. After a week, his treasurer came back and informed him that the reward would add up to an astronomical sum, far greater than all the rice that could conceivably be produced in many centuries!

The principle this story illustrates is compounding interest, which although quite simple theoretically, is one of the hardest things for people to understand when it comes to investing in property.

To give you a general idea, let’s say that I found you a $400,000 investment property located in the sought after city of Brisbane.

If this investment is based on a yearly capital growth rate of 6 per cent, and the interest compounds yearly, after 15 years the property would be worth over $958,000!

The property would have doubled in value and you would have a substantial amount of equity to leverage off during retirement.

If you hadn’t bought this property 15 years earlier, you would have missed out on a great wealth-building opportunity and you would not be as financially secure.

If you’re asking yourself why on earth you haven’t started investing, I urge you to start now.

Whatever your age or stage of life, property has both the flexibility and the wealth-building power to deliver a better lifestyle today, not tomorrow, and an earlier, more secure retirement.

Do something now and call us on 1800 890 600 to find out what your portfolio could look like in 15 years’ time.

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