It’s no secret that most South Africans live paycheck to paycheck. In fact, many of us have experienced it firsthand. COVID-19 hit the South African economy hard this year and since then, more South Africans have been looking for ways to gain financial freedom.
This has sparked the question: Should I save or invest in 2020?
It’s safe to say that South Africans are saving even less now.
But is sticking your money in a savings account and calling it a day good enough? Will that actually earn you money? Not really.
In fact, according to Robert Kiyosaki, “savers are losers.” Here’s why:
These are the savings rates at some of the country’s major banks.
Let’s say you open a savings account with R5000 on January 1st in one of the higher interest rate accounts and earn 4% interest. At the end of the year, you will have only made about R1300.
However, if you invest that money in something lucrative like real estate, you could actually be earning money.
Here are the major differences between putting your money in a savings account versus investing in real estate:
Saving money in a savings account:
Less financial risk
Can lose money due to inflation (if the inflation rate increases by the time you take your money out of your savings account, it will actually be worth less)
Can take years to build wealth and decades to earn enough to retire comfortably- if at all
Interest earned is taxable, meaning you could be losing a significant portion of what you “earned” in income to taxes
Investing in real estate:
Higher ROI (average is about 10%)
Can invest less money, but make more off of that money
Real estate always appreciates in value, so you will continue making more money each year
Will help you earn a stable passive income
Potentially higher risk (unless you use this method)
So...what does all of this mean?
It means that if you’re willing to put in the work to learn how to invest in real estate, your money will be able to work for you- instead of working for the bank. When you put money in a savings account, you are essentially loaning the bank your money, which they will “pay you back for” in interest. However, that interest is oftentimes eaten up by inflation and taxes.
On the other hand, investing in real estate can earn you thousands of rands per month almost instantly.
When you invest in a property, such as an apartment building, student accommodation or even a single apartment, you can earn passive income from the rent. Rental income oftentimes covers the mortgage you pay on the property and also puts a healthy amount in your pocket every month. When you own several properties, the rental income can start covering all of your living expenses and then some.
This is the key to building wealth.
If you’re ready for your money to actually work for you and help you build wealth, take this 10-minute survey. It will help you find out what kind of investor you are.
From there, you can book a call with us and get in touch with some of our students who can source you great deals!
If you’re ready to take the next step in your real estate investment journey, I would love to help. I have created a no-nonsense course that can help you go from beginner to profitable real estate investor in the next 90 days. Click HERE to find out more!
Interested in learning about how to invest in real estate with no money down? Grab your copy of my ebook How to Invest in Real Estate with No Money HERE! I am giving it away for FREE! In it, I reveal my proven strategy to building wealth through real estate investment without spending my own money. This strategy includes several of the income streams I created without paying any money down.
So- are you ready to start building wealth through real estate? If the answer is “yes,” then it’s time you followed these steps:
1. Register for my upcoming live stream
2. Download my ebook
3. Join our Program
4. Watch our previous Live Stream on the YouTube Channel.
5. Join our Facebook Community to plug into a mastermind of like-minded individuals.
6. Book a FREE Mentorship Call with me