Should You Keep Your Money in the Bank or Invest In Real Estate?

Fixed Deposit:

Well, it depends on the Goal and Objectives, if you put money into a bank looking to build up your savings, “ Expert says “it could be the worst thing.” 

To the end, the money you put into a bank does not build you any wealth. An average interest-earning bank account will pay between 2% to 3.5% interest earning. Inflation at 4% to 5%. 

Bank saving with 4% interest.

The above are based on an average of 4% saving interest with a $302k Bank Fixed Deposit of 5 years. At the end of the compound interest, you will be earning $65,429 if you decide to stop your savings. Per year works out to be $13,085 interest.

Real Estate Saving:

However, if you look at money as a  tool  and know how to  use the money to build wealth, your wealth could be doubled.”   

So any funds you have available beyond an emergency fund are worth investing to grow your money over time with Real Estate.

1️⃣  Real Estate growth in Value and see  Profit income  saving.

2️⃣  You Can Get Rental  Passive Income saving.

3️⃣  Using rental to pay off your interest and save on your loan   Principle income saving.

4️⃣  Multi leveraging effect   . 75% mortgage loan strategy, 25% down payment. 
 Pay only 1  🍏  value, but get to enjoy 5   🍏   value when appreciating.

 
Hence Real Estate will Hedge Against Inflation.

Let's analyze a real client case study. The client purchased a unit for $1.089 million, a 2 bedder with 969 sqft size in 2022 with initial payment of $302,910. Now, we'll do a straightforward calculation using these figures.

If we based on the 2 bedder Condo above at $1.089m, assuming you are taking up a mortgage loan of a maximum 75%, initial downpayment of (25%+4%), $303k includes legal fee, monthly installment work out to be $3,488.

(now let's take a look further on the average rental below) 

Recent rentals were between $4k to 4.3k. With an assumed average monthly rent of $4.1k  

here is a breakdown on how each monthly instalment is located:

off the total monthly payment  the Tenant paid,   $2002.90 is directed to what's bank interest as illustrated in the chart above.

📌 The remaining balance is then distributed as follows: of $2097.10,

$1484.75 will goes to your  Principle income saving. 

📌 Additional a balance of of $612.35 is allocated for Property tax and maintenance fee

($300+$250) 

📌Final balance of $62.35 is left  as your monthly P assive income saving . 


( This detailed breakdown provides insight into the distribution of the rental income and allowance for a clearer understanding and allocations.)

📌Between 2022 to 2023, the price of Dover Parkview appreciated from $1,089m to an average of $1,27m, $181k in just 1 year plus.

To be Conservative for calculation, let's assume the 5-year period price at only $1.3m point. ($211k profit) 

Do you know at the End of 5️⃣ years, how much will be your total savings compared to a Fixed Deposit if you choose to cash out?

•  $1484.75 will go to your Principle income savings. 5 years will be $89,085.

• Every month, a final balance of $62.35 will be your monthly P assive income saving . 5 years later will be $3,741.

• With just only  Conservative caculation of only $211k P rofits  in 5 years. Your total Capital Saving will be $303,826 or $60k per year. 
  (100% Return on your saving in 5 years or 25% return per year) 

• Vs $65,429 compound interest earned from the bank.

383% more savings Vs putting money in a Bank fixed deposit with the same amount of money。

Which saving would you prefer❓

At the end of the day, everyone wants financial freedom, and not to be burdened by monetary issues especially at every stage of one’s life.

Attaining financial freedom is possible.

With meticulous planning and commitment. There is so much to benefit from when you make the right choices, and the first right choice to make now is to reach out to me via WhatsApp to explore your options and see how you can  make your hard-earned money work for you, so you can using others people money for your future Retirement.

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