Does not look good does it?

Well depends on who you are. If you are heavily in debt, have no money invested in the stock market, have no personal pension and have an inflation proof income like rent!

It sounds like me and a lot of you property investors out there. If you have:

borrowed to make high yielding property purchases
Stayed out of the stock market
Rely on the rental income to provide you a pension in retirement

Then you are ok. Why? Well its simple:

Inflation devalues debt. So if you are in debt overall then your debt devalues over time as the monetary value of the debt has a lower value at today's standards. If you have savings overall then you should be upset as you £ can buy you less than it could in the past.
If you have stayed out of the stock market then who really cares about what the stock market does. The mere fact you cannot borrow to invest in the stock market makes it highly unattractive let alone the fact that it has fallen 30% over the last 10 years.
Rent is inflation proof. Rent always rises in the medium term. It may fluctuate in the short term due to supply and demand but rent rises with wage inflation. Since there is real pressure on wages to rise to keep up with inflation so will rent. So as long as your retirement fund is in a property portfolio you can be safe as the income derived from it will go up with inflation.
A recession likely means there is pressure to keep interest rates low. This has meant that the Bank of England overall are forced to keep rates where they are. There is inflationary pressure to push rates up and recessionary pressure to push rates down. Overall effect: no movement.

So the future looks like debt values devaluing, an increased interest in property investment as an alternative to stocks and shares, low interest rates and higher profits from renting properties.

Who said investing in property and being a property investor was a bad thing again?

Ajay

PS If you want to be a property investor come to one of my free seminars!

Posted on: 16th Sep 2008

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	Home Services Property News Free Resources Partners Contact Page you're viewing > Home Page > Property News > Property Headlines > Inflation at record levels, FTSE crashes and reces Does not look good does it? Well depends on who you are. If you are heavily in debt, have no money invested in the stock market, have no personal pension and have an inflation proof income like rent! It sounds like me and a lot of you property investors out there. If you have: borrowed to make high yielding property purchases Stayed out of the stock market Rely on the rental income to provide you a pension in retirement Then you are ok. Why? Well its simple: Inflation devalues debt. So if you are in debt overall then your debt devalues over time as the monetary value of the debt has a lower value at today's standards. If you have savings overall then you should be upset as you £ can buy you less than it could in the past. If you have stayed out of the stock market then who really cares about what the stock market does. The mere fact you cannot borrow to invest in the stock market makes it highly unattractive let alone the fact that it has fallen 30% over the last 10 years. Rent is inflation proof. Rent always rises in the medium term. It may fluctuate in the short term due to supply and demand but rent rises with wage inflation. Since there is real pressure on wages to rise to keep up with inflation so will rent. So as long as your retirement fund is in a property portfolio you can be safe as the income derived from it will go up with inflation. A recession likely means there is pressure to keep interest rates low. This has meant that the Bank of England overall are forced to keep rates where they are. There is inflationary pressure to push rates up and recessionary pressure to push rates down. Overall effect: no movement. So the future looks like debt values devaluing, an increased interest in property investment as an alternative to stocks and shares, low interest rates and higher profits from renting properties. Who said investing in property and being a property investor was a bad thing again? Ajay PS If you want to be a property investor come to one of my free seminars! 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