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Land vs. Money In The Bank

Posted on 7 October, 2016  in bank, land, market, properties

When one is deciding whether to keep their money in a bank or buy land (or do anything else involving money), there are several factors to be considered.

To make an informed decision, as far as these two options are concerned, one needs to know what they want.

Security

This goes two ways. First, there is money security in the sense of a complete guarantee of zero losses on one’s investment. This is where the bank edges ahead. Banks are about as safe for one’s investment as it is possible to go.

Secondly, whenever market conditions are unpredictable, value on properties, stocks and other investments can plummet without notice. Security also has a psychological side to it; where one has near-complete control over their money. The bank system, while not totally unshakeable, is as stable an environment to earn interest off your money as possible.

Liquidity

How convertible are the assets to cash? The bank is far more effective at this than land. Land can take a dreadful amount of time to reacquire its value, once lost, and is notoriously difficult to sell if almost all the market conditions are not right.

Huge Profits

For this, you have to pick land. Land value assessment, professional consultation, market understanding and a deep reserve of funds are necessary to capitalize on land value fluctuation at a moment’s notice and make very lucrative profits in a process called “flipping”. “Buy low, sell high” is the mantra to be held close to heart for this practice for this. In fact, if perfected, land flipping is among the top most enriching business practices on earth.

Longevity

It is similar to security in that it represents the concern by investors to have profit continually, and for prolonged periods. As mentioned, investments placed in land can be lost in minutes but banks can grow and propagate one’s investment even after they are deceased.

Know-How

Seasoned financial experts are equipped with the knowledge that is necessary for taking advantage of the real-estate markets and should definitely do so. Those that have very little savviness and technical understanding of real-estate are advised to stick to banking.

Having carefully assessed these factors and weighed them against what they themselves want, one is able to make the best decision as to what to do with their money. It is a highly subjective issue and has no straight answer.

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