The Shrunken Dollar. What's the corellation with Real Estate Investing?
Oyster Bay, NY · Member since 2010 · 14 posts · 2 votes
Hello everyone,
I am a newbie on this sight and fairly new to real estate investing.
With the dollar shrinking and the government spending at alarming rates, what does the future hold in real estate?
If our government does not stop this crazy spending, and cut the 12 trillion dollar deficit (it does not seem they are slowing down anytime soon) the dollar is going to be worthless and our country will be on the brink of bankruptcy.
Just looking for some thoughts on this in regards to real estate.
Here's the thing, even with every modern currency death (Weimar republic, for example) the country still functioned one way or another until things stabilized. Just because the dollar is worthless doesn't mean we still don't have capital in talent, resources and strength. It's going to suck, don't get me wrong, and it's pretty well inevitable but you can prep for it and the prepping may be more common sense and less dramatic than you think.
First of all, I owe nothing secured by real estate to any bank. I have a couple private lenders I have been faithfully paying promised returns to on some of my properties, but we're talking an extremely small figure anymore. Second, I have no major personal liabilities. I live in a paid off house and drive a paid off vehicle. Third, I have a store of food and know basic garden growing and home canning techniques. This doesn't take a rocket scientist to figure out. Fourth, despite the fact that I am "out of the rat race" on my rental income, I am not too proud to do cash generating work like insurance adjusting when I can get it. That cash immediately goes into a commodity. Finally I never stop exploring new opportunities. The current market has a lot of people buying and selling gold. There's money to be made in all that activity just like Oscar Schindler knew there was money to be made in a holocaust war. Stay sharp and smart and it really doesn't matter what the climate is. You will find a way to succeed.
As to real estate, it is a commodity like anything else so if the structure of the dollar falls your valuation in green paper may be affected, along with the mortgages based on green paper and the "profit" based on greed paper but there will still always be some form of value in real estate. Just be open to the idea of trading an apartment for eggs and bread if it comes to it.
Tim
The shrunken dollar can be confusing. If you have a fixed debt service payment, let's say a $500 mortgage, the value of the dollar has no affect on it. And if inflation goes higher than your interest rate, you are really doing well. If you own rentals, theoretically, as the dollar falls in value, you can raise the rent.
On the other had, if the buying power of the dollar gets weak, everything will cost more dollars. That is why folks talk about growing, canning, hunting, etc...
But remember, real estate is always a good investment, WHEN IT IS DONE RIGHT!
Tom
Be sure to 'bleed out' the road kill. Pockets of blood can ruin the taste.
Tom, you think you are joking. I know a lot of people who ate road kill in Britain during WWII. The trouble with that was with the gasoline rationing, there weren't many cars on the road.
The only reason that many breeds of dog survived the rationing was that they were fed road kill. One of my friends had the family job of riding her bike up and down the roadway every day at dawn, looking for meat to feed to their dogs.
There was no meat to be had at any price. Fresh killed hares or grouse sometimes went into the family pot.