Resumo de How To Create Your Financial Goal

Well, you would be surprised at what you can actually achieve, and when you know that there are ?buy-to-let? schemes out there that guarantee your rental income for up to ten years, and property has always doubled in value in every ten year period. OK, so you will need to raise a deposit, but if you have owned your own home for long enough, you will probably have enough equity in there that could be released for the deposit.

Now, a lot of people may think that if they pay ?cash? for a second property ,then they can just cream off the rentals, and live happily ever after, with no worries about any void periods ( periods when you have no tenants in place).

Wrong!

Firstly, you will be taxed at the full rate of tax as unearned income on your rent ? as you have no outgoing mortgage top offset it against.

Secondly, consider this. If you buy a house for £100,000 (if you can find one), and you pay cash for it, if the house goes up in value by 2%, you will have made a 2%age return on your investment, or ¤2,000.

Pathetic! You could get that return anywhere, and more! Now, consider where you put just 10% down on the same house, and a 90% mortgage.

If that house now goes up by 2%, you will have made the same ¢2,000 gain, but that would have meant you would have made a whacking great 20% gain on your investment of £10,000. Do you follow that? £2,000 as a percentage of £10,000 is TEN TIMES HIGHER than £2,000 as a percentage pf £100,000.

The smart investor, all things being equal, would have bought 10 such houses, and made a £20,000 gain on his £100,000 investment. This is the Power Of Leverage ? using Other People?s Money, which makes property investment the exciting, rewarding activity that it is.

Getting the deposit. To grab a decent investment property in the region of say £150,000, this is going to cost you around 10% or £15,000 per property, so you would be looking for £15,000 within a few weeks - not the sort of amount you can usually put on either your (interest-free) credit cards, or get from your local Bank too easily. (Don't know what it is with Banks, but they only seem to understand if you want to borrow money on 'consumables' such as cars and boats!) I would also add here that you should be very wary of so-called ?no money down? deals. Banks and lenders need to see some commitment from you, and it is also important to remember that not everything in property inve stment is always rose-colored, and you really need probably at least £5,000 per property put aside (or have access to if needed) as an ?insurance? fund against bad tenants and so forth. So just where do you lay your hands on this sort of money - and at ridiculously low interest rates - coupled with a long repayment period?

Your House! If you are one of the few people that already realize the purchasing power of the equity of your house, and will psychologically not be phased by putting this to good use then I must apologize, because amazingly over 85% of people fear change more than the uncertainty of poverty in old age. However, if you are one of this 85% who have been brainwashed by your upbringing in society into believing that paying off your mortgage is your paramount goal.

For many people, their life-long ambition - ingrained by society tendencies - is to arrive at retirement age with their house fully paid for. That may well be your driving ambition too, but please consider this for a moment.

Most people, when buying their main residence, tend to do the following:-

? You think that you will live in the same house for ever.

? You take out a repayment mortgage, so your repayments are relatively high as you are paying off part capital and part interest on your loan.

? You may also take out another investment tool, such as an endowment policy, that matures when the mortgage does.

? You sign up for your mortgage, and never even think about changing your mortgage until you move.

? When you retire, even with a good endowment policseen one of these lately?) coupled with your pension, it usually means that you have to sell up and move to a smaller house to keep up your anticipated standard of living.

And what is wrong with that you may ask?

? Most people tend to move every 5 ? 7 years (National Statistics Office). Really what you are doing is just renting somewhere to live ? with of course the added benefit of holding an increasing pot of equity.

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