most "investments" are speculation.

A common question from prospective investors who come to our seminars (and now webinars too), is about the difference between investment and speculation.

Speculation is...
You buy an asset that MUST go up in value to make money. Examples would be: gold, most non-dividend paying stocks, most mutual funds or ETFs, buying call or put options, flipping condos, expensive single family homes or condos, NFL franchises, diamonds, paintings, and antique cars.

Investment is...
What we do. We buy an asset with income, so that even in a flat or declining market you can make money with it. It's why our investment strategy is especially attractive to so many people in these uncertain economic times.

Let's take a look at some numbers that help explain how our investments are so radically different than the speculative nature of other "investment" options available to you.

Consider these apartment building investment scenarios, all based on starting with a:
• 20% downpayment
• little or no positive cash-flow
• 10 year time frame

Let's start with your asset retaining or increasing its value compared to your purchase price:

Scenario 1:
NO APPRECIATION IN VALUE
You have DOUBLED your money as renters will help pay the mortgage down 20%!

Scenario 2:
20% INCREASE IN VALUE
Equal to less than 4% annually compounded, which is below Canada's long term average for real estate, you have TRIPLED your money.

Scenario 3:
30% INCREASE IN VALUE
Less than 6% annually compounded, about Canada's long term average, as house prices double every 15 years in a normal economy, and you have made 250% on your money.

Scenario 4:
40% INCREASE IN VALUE
Slightly higher than Canada's long term average, as house prices in Canada double every 15 years in a normal economy, and more indicative of AB, SK or TX regional economies that have been outperforming the rest of Canada or US. In this scenario you have made 300% on your money, i.e. QUADRUPLED it!

Now let's look at scenarios where your asset's value actually decreases:

Scenario 1: 20% DECREASE IN VALUE
Even with a 20% market DECREASE in 10 years you will have lost no money! Wait 15 more years (assuming a 25 year amortization) and renters will help pay the mortgage down to zero and quadruple your money (from 20% to 80% of property value).

Scenario 2: 50% DECREASE IN VALUE
Even with a 50% market DECREASE over 25 years renters will help pay down your mortgage to zero and you make 150% on your money (from 20% to 50% of property value).

WOW ... now that is what we call an investment!!

Of course, we appreciate and always look for potential equity upside, and usually get it in a healthy market over a longer period of time, especially with our Prestigious Value Chain of property management and building improvements. This is why we would not call what we do speculation; just common sense or prudent business.

Our goal is to provide you with an asset that allows you to sleep at night and collect enough (positive or zero) cash-flow to hold for 5, 10 or 25 years.