When it comes to achieving financial security and independence, traditional wealth building approach of working a 9 to 5 job and building wealth through real estate investing are both popular methods. However, many people are now questioning whether the traditional approach of saving and working for 40 years is the best way to achieve financial freedom. In this post, we will compare traditional wealth building approach and building wealth through real estate investing, and explore which one is better for retiring happily.
Traditional Wealth Building Approach
The traditional wealth building approach involves getting a good education, working hard for a long period of time, buying a house, saving for retirement and enjoying the fruits of your labor when you retire. The main advantage of this approach is that it is a time-tested method that has been proven to be effective over time.
The Downsides of Traditional Wealth Building Approach
However, it also has its downsides. It requires a lot of hard work, dedication, and discipline. The approach includes the 40/40/40 rule of working 40 hours a week for 40 years and for 40% of your base salary. Additionally, it can be difficult to achieve if you are faced with unexpected expenses or financial setbacks along the way. According to a study by Old Mutual, the average South African needs to save at least 17% of their salary to retire comfortably.
Building Wealth through Real Estate Investing
Real estate investing, on the other hand, involves buying, holding, and managing properties with the goal of generating income and capital appreciation. The main advantage of this approach is that real estate has the potential to appreciate in value over time and it can provide a stable source of passive income. Additionally, the South African real estate market offers a wide range of opportunities for real estate investments, with potential returns that can range from 5-20% or more.
South African Retirement Overview
According to World Bank, the South African retirement crisis is a concern, with only about 20% of South African workers having any kind of pension or retirement savings. This highlights the importance of finding alternative ways to save for retirement, such as building wealth through real estate investing.
When it comes to saving for retirement, investing in real estate can be a more efficient way to achieve your goals. Instead of saving a percentage of your salary for decades, you can potentially achieve the same or better results by investing in properties that will appreciate in value and generate rental income. Furthermore, owning a property can also provide a sense of security and stability, which is important for retirement. It's worth considering whether traditional wealth building approach is still the best way to achieve financial freedom, or if building wealth through real estate investing may be a more efficient and effective method.
Don't let the traditional wealth building approach hold you back from achieving your financial goals. Building wealth through real estate investing can be a more efficient and effective method for retiring happily. If you're ready to explore this alternative approach, we would be happy to schedule a call with one of our experts. Our experienced team can provide you with the information and guidance you need to make smart investment decisions and achieve your financial goals. Don't wait any longer, book your call today and take the first step towards financial freedom.
Disclaimer : None of the information contained here constitutes an offer (or solicitation of an offer) to make any investment, or to participate in any particular investment strategy. investRand does not take into account of your personal investment objectives, specific investment goals, specific needs or financial situation and makes no representation and assumes no liability to the accuracy or completeness of the information provided here.