The Buy and Hold methodology, as it is applicable to property, is and always has been the cause for making more millionaires than any other method. The main reason is really because it lets you develop equity through appreciation over a period of time. There are numerous short-term techniques like lease-options, wholesaling, and flipping that can create some cash, but in no way will it improve your long-term net worth.
The Federal Reserve was supposed to protect the value of the U.S. dollar – at least that’s how it was originally sold to the public. We still don’t know why the dollar needed “protection”. It was solid for the longest time, except for the time when President Lincoln printed too many of them to pay for the War between the States, but those dollars came and went.
When the Federal Reserve was set up in 1913, the dollar was worth as much on that day as it was when Napoleon Bonaparte set off for Russia.
Instead what the Fed has successfully done is allow the dollar to slip and decline through the 20th century and is now worth only about 3 cents! The likelihood of a continuing decline is strong.
In Why are Billionaires Buffett and Trump Bullish on Real Estate Right Now? part 1, we stated that the Federal Reserve is committed to stable, steady long-term inflation.
But what about all this talk of hyper-inflation?
There are some doom-and-gloomers out there heralding hyper-inflation. Hyper-inflation means you wake up in the morning and a pound of coffee is $5, but when you go back that afternoon, it’s $7 and by the following morning it’s $10. In other words, the dollar is in free fall and it takes more and more dollars to buy the same goods and services. It’s happened many times in other countries in just the last 50 years. It’s ugly, especially for those who don’t know how to see it coming, how to prepare and what to do when it happens.
Now we understand the argument for hyper-inflation and it’s a good one. So let’s take a look at why real estate right now makes so much sense.
When we interviewed Donald Trump a couple of weeks ago, he told us that NOW is a great time to get into real estate – and he specifically pointed to houses.
Fellow billionaire, Warren Buffett, appeared on CNBC a couple of months ago and essentially said the same thing. In fact, he said if there was an efficient way to do it, he'd like to buy 200,000 single family homes!
You may or may not agree with them at first blush, but when two billionaires (neither of whom are trying to sell you houses) both say the same thing, it's probably worth taking a closer look, don't you think?
“Massive inflation” is poised to strike the U.S. economy and the best hedge against galloping prices won't be gold but real estate, says the sector's mogul Donald Trump.
Gold, a fixed asset whose supply does anything but fluctuate, has long been used as a hedge against inflation, although real estate will do a better job going forward due to its availability and current pricing.
“The bottom line is I love real estate,” says Trump.
“I like it because I think you are going to have massive inflation at some point, and to me real estate is a much better hedge against inflation than gold, which you can't touch.”