Posted at June 26, 2021
Posted In Uncategorized
“One group of borrowers can count themselves as
‘Lucky’ during periods of inflation.”
After locking in a super low rate on a loan the other day, it triggered a conversation about the crazy economic times we’re in right now.
This article came to mind …
“Brace yourself, inflation could create a ‘giant wealth transfer’ from lenders to borrowers” – MarketWatch 2021
It’s fascinatingly true and depending on your current financial game plan, it’s either fearfully sobering or fuel for your dreams.
And that’s the facts of our broken financial system. The rich get richer and the poor get poorer.
You must understand how this works if you want to be on the winning side.
Some key takeaways …
“ … economists and consumers are wondering whether
we’re living through the start of an inflationary period.”
If the latter holds true [inflation is here to stay], at least one demographic could benefit from the trend: anyone … that holds fixed-rate debt.”
There are major categories of consumer loans that may benefit from this dynamic. Federal student loans … private student loans that have a fixed interest rate … and fixed-rate mortgage loans.
‘If you’re a borrower with a fixed-rate 30 year mortgage, that’s a classic inflation hedge,’
Because inflation compounds, even a moderate, sustained uptick in
inflation can ‘really erode the value of government debt'”
Do you think the government has an agenda? Perhaps so. The important question to be asking is …
What’s your game plan? Take a moment to consider this …
If a lender is willing to give you money to buy a property, that a tenant is willing to rent to cover your debt service, while the government gives you a tax break, and erodes that debt through inflation, while you sit and watch your real estate values go up and up and up …
It’s such a dysfunctional advantage to be a real estate investor.
While you take advantage of the cards being dealt, spread the word so others can win too!
It’s a short, but poignant article you can read in full here.
Reach out soon to find out how you can lock in more low-cost fixed-rate debt on your existing and future properties.
