Dec 2018

Stability the Key to Building Wealth

We teach all JPI investors that property in NOT a get rich quick investment.  It is a slow, steady and stable way to increase your wealth.  It’s one of the main reasons we insist on a minimum 5 year investment.

Sim often discusses mindset and its role in obtaining, holding and growing your bank account.  Mindset is hugely important but so is an understanding of external forces that can affect your investments.  One day Sim or I will do an article on these external forces but for now lets think about rules, and regulations.  Who set s these?  Governments or local authorities.  Can you control them? ummmmm …

As a native Brit, and an investor in UK Real Estate I have to be on the ball when it comes to changes.  Over the past 5 years, private landlords have been blamed for all sorts of woes throughout the country.  And the UK Government has jumped on the bandwagon to punish the evil landlord like me!  Changing taxation rules, local planning laws, making up short-term letting regulations.  The UK Government (and many others around the World) are doing anything they can do to appease the newspaper headlines.  

This week my reading has been around Brexit and the Labour v Conservative struggle for power.  To be honest, I don’t think anyone knows which way this will go so I won’t speculate.  I will however compare the turmoil an uncertainty right now in the UK real estate market with Japan’s market place.

Okay, there is no comparison!  Other than both countries have people living in houses.  Japan has had basically the same ruling party for the past 60 years, the epitome of stability.  There are plenty of negatives of this but for property investors, stability is King.

Over my 15 years of investing in Japan I can count the tax and real estate rule changes on one hand.  In Japan big businesses are the ones that are regulated as the invest in property.  The small individual investor is left alone to slowly and steadily build that base of wealth and release themselves from Robert Kiyosaki’s ‘Rat Race.’

There is much to look forward to in Japan over the next 10 years, the Rugby World Cup, The Olympics and Paralympics, the increase in tourism and expansion of foreign labour but I suspect a change in the governing political party is not on the agenda.  Just more slow,  steady and stable returns.

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Just for your reference, here is the article I was referring to.