A few months ago our Co-Founder and Director of Operations, Leslie Awasom, had the amazing opportunity to speak at The Multifamily Investor Network Conference hosted by PassiveInvesting.com.
He was able to share his insights on The Power of Passive Income and talk about Why Busy Professionals are Turning to Multifamily Real Estate Investing as their investment mode of choice.
A key topic of his presentation was based around the fact that you can’t save your way to wealth.
This concept comes from the powerful book by Zeb and Colleen Tsikira and is something that we 100% believe here at XSITE Capital.
Growing up, many of us were taught to save our money. It’s a concept that often starts as early as toddlerhood with a piggy bank and grows into adulthood with a savings account.
We’re taught to save for the dream car that we want, save for our college fund or save for that nice pair of shoes we want that all of our friends have.
Saving money is a simple concept and it can be a great thing when you’re saving for something specific… but the only thing you can’t save your way to is overall wealth.
A savings account today isn’t what it once was, thanks to rising interest rates and inflation.
Today, the average savings account interest rate is 0.39% which means it would take almost 150 years (or more) to double your money.
If you really want your money to GROW and become something that you can truly use in the future, you must invest it wisely.
In this blog post, you’ll learn the vast difference between saving versus investing, so you can have a better understanding between the two and make choices with your money wisely!
Saving and investing money are two very different things and if you’ve never delved into the world of investing, you may not fully understand the differences between the two.
So, let’s start with the more well known concept of saving.
Saving involves setting aside a portion of your income in a safe and easily accessible account, such as a savings account or a certificate of deposit (CD).
The primary goal with saving money is to preserve it and potentially build an emergency fund for unexpected expenses or short-term financial goals.
When it comes to your savings, there are three main things to know:
Investing, on the other hand, involves putting your money to work in assets or ventures with the expectation of generating a return on your investment over the long term.
Investments can encompass a wide array of options, including stocks, bonds, real estate, and businesses.
When it comes to your investments, there are also a few main things to know:
While it’s clear that savings does have advantages of its own, you have to consider the long term reward that’s possible with an investing approach.
There is of course a time and place for saving your money, but there’s also a time and place for investing, which is why knowing the key differences between the two is the first step.
Next, is knowing WHY investing is a smart choice and fully understanding when it may be time to shift your focus.
As mentioned earlier, you can’t save your way to wealth, but you CAN invest your way there.
This is one of the most compelling reasons to choose investing over saving, especially when you choose to invest your money into something such as multifamily real estate.
When you invest in multifamily properties, you tap into the dual benefits of rental income and property appreciation. Over time, this can lead to substantial wealth accumulation, surpassing the growth of a traditional savings account.
Inflation erodes the purchasing power of your money over time, which means that saving alone will likely not produce the returns that you ultimately hope for.
Real estate investments, on the other hand, often appreciate in value, providing a hedge against inflation and preserving your wealth.
Have you ever heard someone say, “don’t put all of your eggs in one basket” when it comes to investing your money? What they mean by that is DIVERSIFY your investments!
A common diversified investment portfolio typically includes a mix of real estate, bonds, stocks, fixed income, etc.
The reason it’s important to make sure that your money is being invested into different options is because all of these assets will respond differently to the same economic event, so you’re actively setting yourself up for less risk overtime.
Investments, including multifamily properties, can generate passive income streams, meaning you get to do LESS work and reap MORE reward!
Rental income from multifamily units can provide a consistent cash flow, helping you meet your financial goals, whether it’s funding your retirement or achieving financial freedom.
Another huge draw for investing is that it often comes with major tax advantages that you aren’t eligible for otherwise, such as deductions for mortgage interest, property taxes, and depreciation.
All of these tax benefits can help optimize your overall financial picture and improve your returns.
If you want a closer look into the tax benefits for investing in multifamily properties, click here!
Now that you know the difference between saving and investing and have a deeper understanding of the benefits of investing, the question may remain: “When should I invest and when should I save?”
This is a great question because, as mentioned earlier, there IS a time and a place for both, so let’s compare.
When To Save:
When To Invest:
At XSITE Capital, we are fully committed to helping you understand the importance of creating multiple streams of passive income and learn how to invest your money in a way that works best for you!
When you learn how to invest your money in a way that grows passive income, you get to experience various benefits that simply saving your money doesn’t offer.
When you partner with experienced syndicators like us, you can trust that the market research is carefully considered and that your money is going toward investments that will produce positive returns.
If you’re unsure of how to get started with multifamily real estate investing, click here to view our process!
The XSITE Investors Community is for investors where you can receive:
Today, XSITE Capital currently has over $168 million portfolio value, has helped empower and grow over 1,000 minds and proudly has over 800 doors under management.
We welcome new investors into our community each week and would love to have you.
