Power to Savings ! Some Maths

Savings
Underated, and often overlooked.

Let me do some sums here.....

Assume investment property loan is $300,000 on an $500,000 property. Investment loan interest at 8% is $24,000 a year. Assume value of property doubles in 7 years.
Total profit is $1,000,000 on sale of property less $300,000 loan to bank payback and $168,000 (7 years X $24,000) total interest charges on the loan = $532,000.

Sounds good ?

Compare this with cash savings :
$200,000 put into deposit earning interest of 7% for 7 years compounded = $321,157
$24,000 put away annually earns at the end of 7 years = $207,695
Total profit is $528,852.

Savings is RISK FREE.

Please note no tax strategies have been considered, with this, property investors may get more returns. However, this does not detract from what I was trying stress.

See title of today's blog. Book mark this for more cash tactics to improve your savings .......