{"id":18360,"date":"2025-07-24T15:08:38","date_gmt":"2025-07-24T15:08:38","guid":{"rendered":"https:\/\/ourhouseforsale.com\/?p=18360"},"modified":"2026-02-20T17:47:44","modified_gmt":"2026-02-20T17:47:44","slug":"what-is-the-best-type-of-investment","status":"publish","type":"post","link":"https:\/\/ourhouseforsale.com\/index.php\/2025\/07\/24\/what-is-the-best-type-of-investment\/","title":{"rendered":"What is the best type of investment?"},"content":{"rendered":"
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\u00a0 \u00a0 \u00a0When people look at investing, there are three main areas to choose from; shares, property or cash deposited in interest bearing accounts.<\/span><\/strong><\/h3>\n<\/div>\n

\u00a0 \u00a0 \u00a0Why has property proved to be the most effective choice?<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0In Australia and many other places around the world, over the past 50 years property has averaged 10% p.a. compound growth. (Carefully selected properties have averaged even greater returns). Not forgetting that investment properties also generate an income from rent.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0Median priced property in Australia have averaged growing at 2 4% p.a. higher than inflation, making it a very solid investment.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0One of the most effective way to build riches is to accumulate a portfolio of investment properties (over the space of 7 to10 years) and then let the power of Compound Interest work to your benefit.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0The main reason that property can be utilised more effectively than shares as an investment, is due to the added benefit of being able to highly leverage an investment property.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0Leveraging is where you use a small portion of your own money along with a large portion of someone elses money (a bank loan) to secure an investment of a far greater value than you could have, using only you own money.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0If you invested $10,000 directly into shares that were growing at 10%, then in 7.2 years they would be worth around $20,000. On the other hand if you had used that $10,000.00 as 5% deposit on a $200,000.00 property and borrowed the remaining 95% plus establishment costs. If this also grew at 10% then in 7.2 years your investment would be worth $400,000.00. Meaning that by leveraging your investment you have gained an additional $190,000.00.<\/span><\/strong>
\nCompounding has an even greater power, the longer it is allowed to work. With the above example, if you were looking at a 21.6 year period, then the results are quite staggering.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0The un leveraged shares would be worth $80,000 and the property $1,600,000, a differential of $1,520,000.<\/span><\/strong><\/h3>\n

\u00a0 \u00a0 \u00a0It is possible to borrow 100% of the purchase price of a property plus expenses by securing the deposit against your own home, so that you dont need a cash deposit.<\/span><\/strong><\/h3>\n