If you think about it, you really have only two options. You can blow it on something that wonâ€™t make you money, but may bring you some kind of happiness, for example a new car or a LCD HDTV Television. Or, you can use that money to make more money; much more.
If you had decided to deposit the $25,000 in a long term CD, earning you 10% interest per annum ten years ago. You would have just about $50,000 right now, doubling you initial investment.
Photo credit: Cristian Andrei Matei
Putting your money into something that will make you more money is always a good idea, but the problem many people have is that, they do know what are the best investments. Itâ€™s my hunch that the Caribbean will soon experience a real restate boom, so my vote is still on real estate as the #1 form of investment.
Here a hypothetical example â€“ Itâ€™s 1997, you have the same $25,000 to invest. Someone approaches you with the opportunity to be a partner with him on a 6 unit office building in, say, Bridgetown-Barbados. You each will put $25,000 in as a down payment; youâ€™re able to buy a building worth $370,000 (25% down payment, 75% loan from the bank).
Over the past ten years the Bridgetown (Bâ€™dos) market has seen appreciation of 150%. So, in 2007 your building that you bought for $370,000 is now worth $925,000.
This is why real estate investments can make you a ton of money: leverage, appreciation, income, and tax savings. Now all youâ€™ve to do is find a way to make 25,000 🙂