STEPS TO RECOVERY
Even in the midst of this third wave, so many people are talking about financial recovery from Covid. Whether it’s at a national (debt) level, a provincial GDP recovery, a business profit margin or dividend recovery—or a personal net worth level—conversations are everywhere!
We believe financial freedom is a journey, with bumps along the road, and challenges to overcome. The current, and most obvious challenge is Covid. I even heard a comedian joking about trying to find the elevator that would lift him out of the Covid basement, and onto the penthouse with a view!
With our ongoing commitment to “keep it positive and keep it real,” we look at this next recovery phase more like a staircase than the imaginary elevator. The path is there, and the staircase is built. The personal questions are: how many flights will we climb? How quickly will we climb? And how much gear will we carry while we are climbing?
Each real estate investor needs to work with their own accountant, financial planner, banker and/or spreadsheets to determine their future financial needs and wants. Your pension plan, your savings and investments and even your life insurance all play a role in determining “how many flights do we need or want to climb” in the real estate investing journey. Oh yes, and how will you protect your retirement relative to inflation?! Nothing new here—except surprisingly few people look at their numbers, think about it, then create a plan. Might we suggest this as a good Covid project?
How quickly each investor recovers or climbs after Covid is also a very personal choice. Well, ok, your banker and your mortgage broker may have something to say about your speed as well. But here’s the thing: climbing out of Covid, and into a better financial picture, is directly related to your risk tolerance and your ability to make decisions. Reality: problems will appear. Positivity: someone else has already solved most real estate problems. Can you find them or partner with them, so you can keep moving forward?
And finally, “how much gear will you carry up the staircase with you?” There are 3 main ways that real estate investors answer this question. For some investors, they’ll take it all. Just like a backpacker, they’ll plan for the journey, purchase what they need, use some of what they already have and then figure out the rest as they go. DIY is a perfectly good idea, but it’s heavy and time consuming.
Other investors would rather climb the Financial Freedom stairs without a 50 lb backpack. These are investors who believe real estate investing can create a great return on investment (ROI) and generate the net worth that they desire. These are investors who have a strong desire to benefit from real estate, but who lack the time, energy and sometimes expertise to manage their properties and their tenants. We partner with people like this in a Joint Venture.
A third type of investor is one who understands the benefits of investing in tangible assets. These folks typically have capital, RRSP’s or some other liquid asset like a Line of Credit. They typically like to keep those investments simple: invest X dollars for a fixed percentage return, but secured by the real estate property. In the next 6 months, we are anticipating a number of opportunities where people can partner with us as Private Lenders.
Opportunities, challenges and unprecedented curve-balls will continue to appear as the world recovers from the pandemic. We think the media will continue to report on life in the concrete jungle as if danger lurks around every corner. However, as you climb the recovery staircase, the view will become clearer. We intend to grow our financial confidence, how about you?
