Stimulus, stimulus, stimulus. That’s all we hear every day now. As the outrageous and skyrocketing unemployment numbers rise, we hear more and more about stimulus. The cries grow louder as the shouts for proof of success are stomped down by those inside the beltway in Washington.
So to their point: did the stimulus actually help? Is the stimulus helping currently? And how much of the stimulus remains to be spent in 2010 and 2011?
What has this stimulus done for investing and the Real Estate markets? What about big and small business in America?
These points are very important to look at when determining whether or not Government injection of money into the monetary supply is a viable option during a tough economic recession.
When the government injects a single dollar into the monetary supply, not to mention $1.2T, as this administration has done so far in the past year, that single dollar injected reduces private ’stimulus’ by nearly $1.50 from a small business entrepreneur. That $1.50 no longer goes to buying more property, plants, or equipment.
Not only that, but there is no need for the small business owner to hire another worker either.
Pair that up with the $1.00 injected by the government, which is usually borrowed from another country, or through increased taxes, and you have a double-negative spiral created from this simple ’stimulus’ transaction.
So now that there’s nearly $1.2T in extra money in the monetary supply, we can assume that nearly $1.8 trillion dollars have now been scared out of the American economy from your friends, small business owners, family members and other citizens.
So as an investor, in both real estate and in the stock market, what do you do in this situation? The majority of people take their money out and hide it under their mattresses. This adds even more stress to an overly distressed market.
To the average investor, now seems like a time when they should run. But truth be told, now is the time to invest in solid LONG TERM investments like Real Estate. Earn the revenue of a regular cash-flowing investment rental property; plan your future around purchases in Real Estate that are only going to go up in value from their lowest prices in decades.
Now is the time to be bullish. Now is the time to invest your IRA or 401(k) in Real Estate. Now is the time when all of the savvy investors are buying up the deepest discounted commercial and residential property in 50 years.
Solidify your future. It is in your hands.
Paul R. Whitacre is a managing partner at WealthyIRA.com. Our vision is to teach others to invest their IRAs and 401(k)s in the deepest discounted Real Estate in decades. Check out more at our http://www.WealthyIRA.com blog and follow us on Twitter at http://www.Twitter.com/WealthyIRA
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