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Article > Property Over Pensions Any Day

Article kindly provided by

www.PlatinumPortfolioBuilder.co.uk


If you don’t have an alternative to a standard pension, your chances of a long and luxurious retirement are pretty much scuppered. In making such a bold statement, my intention isn’t to set pulses racing with scaremongering, it’s simply to highlight the fact that the value of pensions is being eroded by time and, on the whole, people are doing very little about it.

While people work hard and pay hard, it’s the pension fund managers who are getting rich on commissions in the here and now, while those whose money it is have to wait until they’re old and grey before they see penny of it.

The real problem, as I see it, is that people don’t really think about their pension until they get their first payment. Which is after they retire (if they are even able to retire), at which point they discover that the security they had hoped for in their latter years has been trounced by inflation and the rising cost of living. Now I don’t know about you, but that’s not a thought I relish. When I hang up my suit and shiny shoes I want to know that I’ll end my days in comfort.

You might be wondering why I feel so strongly about pensions, and the reason is a very personal one. Because I watched my own father slave away as an employee his entire life, blithely paying into a standard pension, only to retire and find out that he wasn’t getting anywhere near the amount of money he was expecting. When he passed away, it was in penury.

Naturally, I decided that was something that wasn’t going to happen to me. And it hasn’t, because I looked for something to put my money into that would give me a reasonable return in the near term – a reliable revenue stream even while I was working – with the upside of capital growth over the longer term. For me the solution was investing in bricks and mortar.


How many people have you met who proudly told you that they were leveraging the money in their pension to provide them with additional income today with the high probability of excellent capital gains in the future? Very few, I imagine, if any. And yet still they continue to feed the pension beast with their hard earned money. Hoping. And waiting.

While pensions were hammered in the recent credit crunch, it’s true that property prices took a beating too. But which of these has had the greatest recovery? The simple fact with property is that isn’t enough to go around. We can’t build fast enough to accommodate the people who need somewhere to live. And it doesn’t take a Keynesian economist to ascertain that, for this reason, property values will remain relatively high and continue to rise long term.

The point is that for those who focus their attention too heavily on the recent sub-prime price-drop, they’re missing the bigger picture. Look at a graph plotting house prices over the last 100 years and the ‘crash’ is put into perspective as a mere kink in a continuing uptrend.

‘Buy land, they’re not making it any more,’ Mark Twain wrote. And he struck upon the most important economic factor of all – supply and demand. Which is why you’re better off putting your money into property, something you can see and touch, than a standard pension that rises and falls with the fluctuations of an abstract market.


Platinum Portfolio Builder


According to HSBC, Britons will spend roughly twenty years of their life in retirement. Yet more than half of these future retirees are adequately prepared. Some have no pension at all, and will have to live on whatever paltry sum the government deigns to give them. Will it be enough to live out their latter years in style? I very much doubt it.

According to the same HSBC research, most people with a pension will see it run dry in little more than seven years. My definition of insanity? You pay into a pot, and pay into a pot, and pay into a pot, month in month out for all of your working life, and the money you get back won’t last for the full length of your retirement. This is a ticking time bomb that only the financially savvy will be able to diffuse if they look at real alternatives.

Those with property won’t need to worry as much as those relying solely on a pension. Property owners can enjoy a regular rental income, which can be adjusted according to inflation, the cost of living and what the market will tolerate. And if push comes to shove, they can sell the property and live off the equity. For those on a standard pension they will have to settle for drawing down on an ever decreasing sum of cash until it runs out, at which point it will be time to turn to the government for a helping hand.

To find out more about how Platinum Portfolio Builder can deliver market-leading returns on a totally passive investment opportunity call 01226 732606 or visit our website where you will be able to request a copy of the FREE Five Fundamental Principles of Property Investment 2013 and also pre-register for one of the first copies of Your Property Pension, due to hit the bookshops and Kindle this year.

 

Platinum Portfolio Builder builds and manages property portfolios for people who want to invest in property but who don’t have the time, knowledge or inclination to do it themselves. They only buy properties where a minimum discount of 25% below an independent RICS valuation is achieved. They have their own in-house team of expert buyers, project managers, builders and letting agents and so let and manage the properties for their clients on an on-going basis until they want to sell them and cash in their profits.

Platinum Portfolio Builder

 

 
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