Mad_About_Money_final Mad About Money_Dec 2016 - Page 28



Today , when high inflation is diminishing the actual return on deposits and equity is unstable , the offer of getting a 12 % return on an appreciating long-term asset such as real estate sounds so great that you cannot ignore it . However , the golden rule when investing your money in something is to inquire about a deal that looks unbelievable , since it is actually not true .

Before we tell you whether investing in assured returns is right for you or not , let us elucidate how such schemes work . They begin when you purchase a property entirely , even if its construction is not completed and still has 2 or 3 years to go . You purchase the property either through a bank loan or your own finances . For instance , you pay a certain amount for a flat and during the period of construction you get certain amount per month which is part of the 12 % per year . This money is given by the builder to you in the form of post-dated checks . When the construction of your flat is completed and you get its possession , you have two choices . One is that you can go on with the assured returns agreement or else you can choose to opt out of this project . However , the terms of the agreement can change , since the flat will be given on rent to a tenant and the builder will share the rental fee with you .
Moreover , there is no confined time period for the assured returns agreement . It is generally for the subsequent 2 , 3 , 5 , or even 10 years after you get the ownership of the flat . This sounds all too good . However , let us see at some of the questions that you must ask yourself before signing an assured returns agreement .
Due to the excess supply , some developers are seen as less creditworthy by private equity ( PE ) and banks that conventionally finance the business . This , in turn , forces the developers to opt for other funding choices , such as getting bank funding through the buyer , which is you , since the buyer can get the loan at lower rates through you . This step is taken in order to raise cheap money from buyers and investors . If the developer seeks a bank loan , then they would get it at a much high price , which is usually 14 % to 15 %, which means that they are getting cheap financing at 10 % to 12 % in the form of assured returns schemes .
Assured return schemes are non-secure schemes that come with high risk . This means that even if the developer has a lot of credibility in the market , they will not hesitate even once to not pay the returns to the buyer during a financial trouble .
Now , the big question is what you should do , should you go for it or not ? We advise you to steer clear of such assured return offers . Even if you consider it , you must get some legal help and have a lot of capital . Make sure that you get the agreement scrutinized by a legal expert before you enter it , so that you can minimize risks in your investment .
MadAbout MadAbout Money Money MONEY MATTERS. AND IT MATTERS TO EVERY PERSON WORKING HARD TO EARN IT. WHETHER IT IS A MULTIMILLION DOLLAR RICH BUSINESSMAN OR A MANAGER IN THE CORPORATE FIRM, THEY ALL DREAM OF MULTIPLYING THEIR WEALTH EACH DAY. THE RICH STILL HAVE THEIR WAY WHEN IT COMES TO GETTING WEALTHIER; IT’S THE LESS AFFLUENT WHO STRUGGLE TO MAKE IT BIG Risk avoidance made simple in few easy steps S You can adopt, if not afford the rich man’s ways 28 o, if you are aiming for the lifestyle of the rich and the super rich, don’t get hassled by the investment market. If you can’t afford the rich man’s ways now, you can definitely adopt their ways. All you require is perseverance, the right knowledge and good advisors on board. Though the rich do their homework well, they do have financial advisors who advise them to take the right investment decisions. You may definitely hire financial advisors for a thorough guidance to a successful investment strategy. Investors also follow a rational approach to keep up their businesses moving in a smooth manner. What reasonable approach do they look for, then? 1. Construct a Strong Financial Portfolio Seek advisors’ help to lay out a suitable investment plan for your business model, keeping your financial agenda and goals in mind. The entire process involves a bucket full of mathematical calculations that would include profits and returns on your invested money for future purposes. On the other hand, for businesses that are already in the investment pool and wish to enjoy more monetary gains on their investments, it is time for them to get their investment plans revised to stay up-to-date with their competitors. Consult a financial advisor who would direct you in the right direction and get the ball rolling. 2. Balance your Risks and Returns Well As risks and returns come handy with any type of investment plans, go with their flow to enjoy maximum thrust to your businesses. Your advisors will not only help in scraping out the best possible investment solutions for your risks and returns well but will also help you achieve a benchmark level that will fi ǒfBR7V66W76gVf6&Vf"FRf'7B7FWvrW"&62vV2F66WBFVf WRFRVFGW7G'FR67BbFWfVrWrG'Vr@FR&6RbFR&VGW7FrfW'6bB0&VG67VFVBvV&Vf&RG26RFP&WBBV2FP6RbFRWr&GV7@FW2BW"FPFVFbFR&WfVVPvVW&FVBg&FR6PbFRW7FrRF&WBBFW2FP&6266WFVB26FfR7V7BFV 'W6W72FV2ࠣ2FR6'D7WG2Fv&fG0bRFR66WfRW"f6v0F&Vv6'B7WG2FVWBW2'&VFBחF0FW&R&RRvWfW"FRvF6Ɩ"FR&6( 2FFW"2FfpFV"fG7FW2B6fBvBB7FVGf6Gf6"vwVFRRF&VvFRFff7VBFbFPVF&Rf6&֖Bࠣ#