Which Generation Of Investors Do You Belong To?
Inflation is a sneaky bugger. Over time, it slowly erodes the value of your money. And we wake up in our 40's to find that after two decades of working we do not have much in savings to account for. We millennials like to think of ourselves as independent and in control of our destiny. But a study shows that when it comes to our finances, we're quite clueless. Turns out, our bad investing habits are leaving us vulnerable in today's unstable economy. Easy come easy go. That could be the motto for millennials when it comes to their money. They are the first generation to come of age in the new millennium and have benefited from unprecedented economic growth. But they are also the most likely to experience job loss, underemployment, and stagnant wages. And when it comes to retirement, they are woefully unprepared. They are nothing like our previous generations who valued savings overspending, and the avalanche of induced consumerism has exacerbated this situation turning an entire generation into frivolous spenders. Recent studies found nearly two-thirds of millennials have nothing saved for retirement. For those who do have savings, the median balance is quite low. This is largely because millennials are saddled with student loan debt and other financial obligations. But it's also because they haven't been taught how to save and invest for the long term. With Social Security benefits expected to be cut in the coming years, it's more important than ever for millennials to learn the basics of investing. Otherwise, they risk being the poorest generation in retirement.
It's no secret that the key to increasing your available cash is to spend less money. But for some people, that can be easier said than done. After all, it's not always easy to pass up a new pair of shoes or a delicious meal at a restaurant. However, if you're serious about creating wealth, you need to be willing to make some sacrifices. That means rethinking your spending habits and priorities. Do you really need all the stuff you buy? Is it too difficult to cut back on eating out? Would it be too bad to take cheaper vacations? If you can answer "no " to these questions, you'll be well on your way to increasing your available cash. Of course, it's also important to invest in assets that will hold their value over time. With a little bit of planning and discipline, you can create real wealth for yourself.
So, what can we do to fix this?
You can beat inflation by investing in assets that generate income in short term and create value in long term. That way, you'll have a steady stream of cash to keep up with rising prices. Assets that tend to appreciate in value over time, creating long-term value for your money, could include stocks, real estate, art etc.
To begin the journey towards financial independence you need to save more to invest more.
How can we save more?
Take a close look at your budget and see where you can cut back. Do you really need that new car or boat? Or can you get by with your current one for a few more years? Do you really need to eat out at expensive restaurants every week? Or can you cook at home more often? When it comes to saving money, every little bit counts. Be cognizant of your spending habits. Ask constantly do I really need this.
Why UK Buy-to-let is a great wealth creator?
A recent study by JLL, one of the largest real estate firms in the world, suggests that the trend of rising renters is here to stay. According to their findings, the BTL market has the potential to become the "largest of living sectors" in the UK, with a staggering value of over £1.4 trillion in August 2021.
It seems that tenants are taking over the housing market as Zoopla's Q4 2021 Rental Market Report showed that demand from them in major cities has gone double compared to 2020, while across-the-board tenant preference for renting increased 76% above average and property supply was 39 per cent below.
According to recent reports by DPS Rent Index the UK has already seen a rise of over 6% in rentals in the last 12 months.
The average price of homes across England has reached new heights, with Rightmove reporting an all-time high this year. There's never been a better time to invest!
Among several factors driving the demand, an important one is the changing demographics of renters. According to Finder, in 1997 the average age for a person buying their first home was 26 in 1997 which now stands at 34. The reasons for this shift are varied and complex, but they can be broadly grouped into two categories: financial insecurity and lifestyle preferences. In terms of finances, millennials are saddled with student debt and are generally less financially secure than their older counterparts. They are also more likely to have precarious work arrangements, which makes it difficult to save for a down payment. At the same time, many millennials prefer to live in urban areas and do not want the responsibility of owning a home. As a result, they are increasingly opting to rent instead. The changing demographics of renters are having a profound impact on the housing market, and this trend will likely continue in the years to come.
UK rental markets are highly regulated and so is the supply of new property development permissions overseen by the council. Historically in the last 5 decades, there hasn't been a situation where supply has exceeded demand.
How to plan your next 20 years of value creation?
The UK rental market has never been in a better place for investment than right now, which is why it's so important that any investor wanting to diversify their portfolio, must consider getting into it before the best properties are taken. To create value, invest early and stay long because the base effect on multipliers can hardly be ignored. Ever heard someone in your network saying – "my granddad bought this property for a few thousand and it's worth millions today".
If the market rate doubles every 7 years, what you buy today for £100K becomes £200K in 7 years, £400K in 14 years, £800K in 21 years and so on. The net result is – that your £100K today could become £800K in 20 years, which is 8X. This can never be achieved from interest-only financial instruments like loans, deposits or savings accounts.
How can Novyy FI-To-Let help you create value?
Novyy Fi-To-Let is born to bring more people onto the property ladder with an aim to help our investors create value out of investing in the UK buy-to-let rental market. With options to invest fractionally, we provide opportunities for all sorts of rental investors, whether you're a seasoned pro looking to add to your portfolio or a first-time investor just trying to get your foot on the ladder. And because we're focused on the UK rental market, you can rest assured that you're getting exposure to one of the most robust rental markets in the world. Everybody's heard of the rental market and buy-to-let? But can you get in on the action? The rental market is booming and there's no sign of it slowing down anytime soon. The UK especially in tier 2 and 3 cities are facing huge demand with new universities, hospitals and large business process setups and an ever-growing population. With the increase in late marriages, working from non-home cities, the requirement of single living premises is on the rise. So many stable opportunities can be researched.
Novyy has made it easier than ever for people to invest in high-quality real estate opportunities that were not available to most. With property prices skyrocketing, it can be difficult to get on the ladder especially if you don't have a lot of money to start with. This is where Novyy's Fi-To-Let makes it possible for investors to start it small grow and it over time. One can get started with as little as £10K. Our investors put up 25% equity and Novyy arranges to fund for 75% of the purchase price and manages the entire life cycle of the investment. With our easy-to-use interface, you can invest in opportunities that were unavailable before. You'll love the generous capital appreciation and passive income generated by our properties. Our interests are always aligned with you.
So, what's the verdict? Should you start investing early and build a systematic portfolio to beat inflation and generate income for retirement? Absolutely! We can help you do just that. We have a wide variety of long-term assets to choose from, so whether you are looking for Buy-to-let, CoBuy, leading real-estate Funds or something else in property, we can help get you started on the path to financial independence. Our assets are carefully selected to ensure maximum returns for our investors. Ready to get started?
At Novyy we are committed to making digital investing easy and accessible for everyone, so please don't hesitate to get in touch if you have any questions or would like more information about our services.
Novyy is a Community Investing Platform that enables individuals to invest in UK Buy-To-Let, Leading Real Estate Private Equity Funds, and Premium Homes across Europe with as little as £10,000. Novyy users enjoy seamless digital investing like never before, in opportunities that were earlier unavailable to most individuals. This piece should not be construed as tax advice. Please refer to your tax advisor before making any decisions on owning properties through Limited Companies.