By Dr. Patrick Liew (guest contributor)
Real estate meets a basic need for shelter. It is a major contributor to our comfort, happiness and overall well-being.It is a platform that can be used to strengthen a community and improve society. It is also an important pillar to strengthen the economy and make the world a better home.
The investment value of real estate
As an investment instrument, real estate is generally treated as an AAA-class of investment. It is known to appreciate faster than the inflation rate and can therefore contribute to the preservation and growth of wealth.
Property investors can leverage on bank borrowings and other forms of fund-raisingto own real estate. Subsequently, real estate can also be used as collateral to unlock cash for further investment or to be used in an emergency.
Through astute property investment, investors can profit in several ways. The returns on an investment include capital appreciation, rental yield, en-bloc potential, profit from addition and alteration, and several other ways to value-add to the original investment.
That’s why many millionaires have become rich directly or indirectly from real estate investment. It is not uncommon to hear from many astute investors that they have made more money from real estate investment than from their savings, business profits, and returns from other instruments of investment combined.
The sad truth about real estate investment
The sad truth about real estate investment is that most people are ignorant and apathetic about it. Many have lost a large part of their hard-earned money to the people who are in the know.
As part of my doctorate studies, I focused on financial intelligence – in other words, how to earn, preserve, invest, grow, and spend wealth wisely.
I discovered that most people across the developed and developing world either have no or a low level of financial intelligence. In particular, they have an inadequate level of financial intelligence for real estate investment even though they have to be involved in buying, selling, leasing, and transacting some properties in their life.
Research shows that the lack of financial intelligence can cause a cascade of negative effects, including the incurring of unnecessary debt and other negative effects on their family, community, economy and society.
Increasing your level of financial intelligence in property investment
The low level of most people’s financial intelligence in property investment is a result of a lack of education by their parents and society. They were not taught about real estate investment through their formal education or by their bosses and colleagues in the workplace.
In addition, they do not have credible and competent friends or acquaintances who can help them learn this critical skill, which can help in their survival and success in life. To make matters worse, many of them are misled by friends and even some self-proclaimed experts, some of whom are prone to dishing out the wrong advice, even if it is out of good intentions.
I feel that is it part of my calling to educate people about real estate investment and empower them to achieve true wealth from it.
Real estate as a means to true freedom
I have always said that if you invest in the right real estate, it will help you achieve true freedom. When you achieve true freedom, you have financial freedom, time freedom, lifestyle freedom, and contribution freedom.
In other words, you have the freedom to fulfil your dreams and the time to enjoy the fruits of your dreams. You can experience the best of life and provide the best to your loved ones and the people around you.
I’m honoured and humbled to be given an opportunity to share about real estate investment with another group of “hungry” participants, who want to know how to profit from real estate investment to achieve true freedom.
Dr. Patrick Liew was previously the Chairman and CEO of HSR, a listed property agency, and has founded and listed two companies. In addition to an MBA, MSc and BSc, he has achieved a PhD based on his work on Financial Intelligence. He has started many charities and works with schools to provide free financial education to young people. His mission is to help ordinary people create, invest and grow their wealth.Click here to sign up for his free talks on Street-Smart Property Investment Strategies.