The new "safe haven"?

Ok, so the stock market has tanked and the "average Joe's" retirement portfolio has lost over 40% of its value. Some large banks and investment houses as well as a few commercial "pillars of our economy", previously thought of as "unsinkable" have sunk or are in the process of sinking.

Banks and bonds are returning near-zero on investments.

For a lot of baby boomers, the maximum insured amount on bank balances doesn't cover all of their savings.

Where can you safely put your money *and* get some sort of return on it?

Have you considered real estate?

Look at it this way....

• stocks prices can (and do) fall to zero or near-zero values
• bonds are only as good as the viability of the issuing institution - I.e. if GM or Chrysler file for bankruptcy, what does that make their bonds worth?
• banks? - they're no longer an infallible, safe haven. And what return do you get on your savings? Peanuts at best!
• unlike stocks, when have real estate prices ever fallen to zero, or even dramatically at all? (not including real estate near Three Mile Island!)
• the market in general has plumetted over 40% but local real estate prices have barely dropped 6% and the markets are already coming back!
  
• You'd be hard pressed to get a bank to loan you 50% of the money to buy stocks (I.e. on margin) but with 20% down, you can still pretty easily borrow the remaining 80% to buy a house

Why? Because even the lenders recognize that real estate is virtually a "safe play". The biggest risk to lenders is not that the property becomes worthless. Their biggest risk is YOU - whether you'll continue making mortgage and tax payments.

So if you know you're a "safe bet" to make those payments, then the low-risk investment play of the day is obviously real estate.

Another option - buy a place and rent out either all or a portion of it and have someone else pay your mortgage!

Do your own due diligence on this thinking.
One book worth reading is "Real Estate Riches" by Dolf de Roos ($17 USD)
Check it out on Amazon.com