The Accidental Investor

Are you sick of being the media scapegoat for this affordability hysteria? I know I am and most of my colleagues feel the same way. Let me tell you why Investors are not the villains.

The property market is like an escalator. When you get on board you can use its momentum to take you upwards. The trick is to get on. Standing at the bottom of the escalator and wringing your hands and complaining will not help you to get to the next level. Everybody has challenges and laying the issue at the feet of Investors is being naïve at the very least.

I read recently how a lawyer commenting on an article by a successful property investor said that everything favours the Investor. The point missed by the lawyer, and most others in this debate, is that at some point the Investor had to buy their first home too. The difference is they got on with doing it, rather than complaining about it.

Investors are not a hungry hoard of cashed up individuals deliberately targeting First Home Buyers, pushing them out of the market and laughing gleefully all the way to the Bank.

The majority of Investors are your mums and dads, normal family orientated people who are striving to do the best for their future. This is quite normal behaviour. Property just happens to be the best asset class for them at the moment. Let’s not forget that buying their first property took sacrifice, hard work, dedication; even working two jobs was not uncommon. Those traits still apply today.

Investors are simply hardworking people, doing what they can to do better for their families and making it happen. The message that the media should be spreading is that Investors are worth emulating, they are productive members of society gaining valuable experience at looking after their own futures. Investors today are creating the blueprint for future generations to follow when it becomes their turn to look after themselves.

An Investor is born out of the needs of the future.

We live in times where we are constantly bombarded with messages telling us we have to look after ourselves. Superannuation was created to ensure people had money at retirement. The Government cannot continue to provide the level of pension assistance it does today. The solution is to encourage people to look after their own retirement. Why then does the media cry foul when these same people, heeding the message, start to buy assets they are comfortable with? After all, bricks and mortar are very sound assets.

To invest in any asset you need money and banks love to lend money. Banks also love to take property as security because they understand it is a stable and valuable asset. For mum and dad Investors this is further confirmation that investing in property is a sound and logical decision.

The consequences of shifting the perception of having Government assistance in retirement to one of creating your own retirement strategy is naturally going to impact on asset classes of all types. Clearly though, mums and dads love property because mainly, it’s simple to understand.

How many people investing in shares, derivatives, bonds, futures, options, exchange traded funds, swaps etc. truly understand what they are?

On the other hand, property is easy to understand. You can visit it if you want to, touch it and experience it. Property is real.

I’m not going to get caught up in any emotional rhetoric about property versus shares. That is not the point here.

Suffice to say that it’s difficult to establish a meaningful connection with something that only exists on a computer screen. You can power off a screen but you know your property is still there. It’s this knowledge that attracts the grass roots investor.

Can property Investors be blamed for choosing an asset they believe in, for selecting a safe environment into which they invest?

Remember, the quality of lifestyle in retirement is what’s at stake here. The Government is not going to look after us anymore, that’s the reality.

People, ordinary people, become Investors out of a need to have stability around what is going to happen to them in the future, when they retire. Buying property ensures they can have an income stream if they choose or they can have a lump sum by selling off the investment.

Arguments about affordability are irrelevant to a mum and dad Investor. They definitely understand the discussion because they have been through the same thing. Of course, it needs to be said that each time they purchase they go through it again.

Investors have already overcome the obstacles to buying a home and have moved on to the next phase. You have to look after yourself first before you can look after anyone else. Perhaps, somewhere in the affordability discussion, the fundamental ability to achieve has been muddied with the mindset of entitlement. The continual struggle to achieve something meaningful is surely worthy of encouragement.

An Investor takes on the risk of borrowing, the risk of investing and embraces the risk of losing so they are able to receive the benefit of winning. They play the game. In case you didn’t realise, property prices increase for an Investor too, it’s not exclusive to other types of buyers.

I think, in times to come, historians will look back and marvel at how ordinary mums and dads embraced the challenge of creating exciting futures for themselves by investing in the things that they can rely on. Property Investors are showing the way right now for future generation to follow.

Clearly, the next generation of Investors will be by design, not by accident.

Investors Direct understands what an Investor wants and we are on your side. Talk to us today about how we can help to create your financial future.



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Investors Direct Financial Group

Investors Direct Financial Group (IDFG) was established in 2001.
Our mission is to help our clients achieve and maintain their financial freedom.

Members of the IDFG Group include:
  • Nanmon Financial Services Pty Ltd, trading as Investors Direct Financial Group (ABN: 52 097 697 820 ; ACL: 402950)
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