We were cleaning out our desks and found a newspaper article dated November 18, 1974.
The heading was “Today’s $40,000.00 house will be worth $125,000.00 in 1984” – Wow! What a prediction.
When it comes to making investment decisions we believe that you should view present opportunities as if you were looking back from the future. Try to do now what you will wish you had done as you look back from a future date.
Continued inflation should always be kept in the back of your mind. As the purchasing power of the dollar has decreased in the past, the market value of real property has continued to increase in terms of current dollars.
Real property has always been one of the best hedges against continued inflation.
Holding too much cash in the bank, or in fixed obligations payable in cash, is a certain way to lose purchasing power. As prices go up, the value of your money will go down. Investments in real estate, on the other hand, protects you from the declining value of the dollar. It is a great idea to invest in real estate at a young age. Time can be your greatest ally or your worst enemy.
You should not be afraid of borrowing money to buy real estate; it is the only “good” debt.
Future inflation will make your home worth more in terms of dollars and add to your equity without affecting the mortgage.
As hard as it is to believe, today’s real estate prices will seem like bargains in the years to come. Don’t you wish you had purchased a piece of property 20 years ago, 10 years ago, 5 years ago?
Oh, that article dated November 18th, 1974 was inaccurate in its predictions. The $40,000.00 house wasn’t worth $125,000.00 in 1984; it was worth between $175,000.00 and $200,000.00. AND TODAY IT IS WORTH OVER $1,400,000.00!
Eric Ruxton and Larry Aikins are the owners of Terrace Realty Inc. and Terrace Associates Inc., in Redwood City. Terrace has been in business for over 55 years and in addition to being an independent Brokerage Company, also owns and operates rental properties.