If you have had the privilege to have made a money to be able to invest, then why the urge to take huge risks that are completely unnecessary? We often wonder this at HomeSec, how our society has fallen into such a bad pattern of doing this. If you have worked hard to make your money, it is so important that you take care of it. We see a lot of people, who invest all their hard-earned money into unusual shares that they frankly have no idea about. Or they might invest in the share market with a major bank and say it drops 5% overnight, they suddenly panic and take their money out of it, only to see it recover the next day! Yikes! They have no concept of playing a long game. Everything is just now, now, now in today’s world! The reality is that yes investing can be a bit “scary,” but sometimes fear is a good thing, because it means that you respect it. Then you actually do your homework and take your time with it and avoid any unnecessary risks. If, however, you know not to go into it with a wanting to get rich over-night mentality and you are willing to be in it for the long haul, then you are already part of the way there. In saying all this, you sure can make a lot of money from investing…clearly, but you have to be smart about it.
In our industry a lot of investors choose to invest with a private lender that has a pooled fund. Sometimes they even see initial returns from it. The truth is though that they have no idea, who they are lending to. The person could have a criminal record! Or you could be lending to something like a sheep cattle station, where there is no capital growth. One of the big ones at the moment is that the business could be in a flood zone. If this is the case the insurance companies will not cover them. Banks will not lend in these areas now, because of this exact reason, and there are several flood zones now in Australia.
The main issue that we are seeing now is that investors will put all of their eggs in one basket, so to speak. So, they invest their entire savings with the one company rather than spreading their risk. Just the other week we were talking about Warren Buffet’s investment strategy about diversification. Well, these investors are playing a game that is the complete opposite to this and for many of them it is like poker, they just go all in! Usually what happens is they will initially see some return. So, so far so good, so they invest everything with them. Only problem is what happens, when it is a Ponzi scheme? You would have no clue, if you have not done your research and the company is not transparent, like many are not. A Ponzi scheme is a fraudulent scheme whereby the company is simply getting more investors in to pay the initial investors. Suddenly, it all goes down-hill, when they run out of investors, and you can wind up losing everything. It is very scary indeed. These potential pitfalls really are things that investors need to wake up to by doing their own research, so they are not investing blindly, so to speak.
At HomeSec our model is just so simple that it ironically has most of our investors baffled! They are so confused by the simplicity and our transparency that they think there must be a catch. They usually think that it is too good to be true. Our investors are co-investors with us on each loan. So, we are not just playing poker with your money, so to speak. If we would not invest in something, then we would not let you invest in it either. On each loan you know exactly who you are lending to and where they are. So, for example, our investors know that they have lent to someone in Port Melbourne, Victoria, and their name is on that title. If there is one in Brisbane, then that is their security too, and if they have ten all over Australia, each is on its own merit. They are on the title and on the mortgage, and this ensures that you spread your risk. So, if you have one million dollars to invest, you put $100,000 into ten loans. It is that simple. So, when you invest with us, you invest in a security, and it is essentially like you are the bank, because you are not investing in a corporation, you are the lender. It is also worth noting that our investors enjoy above average returns at over 12% pa. So, if this sounds good to you, be sure to get in touch with us today, and we will only be too happy to answer any of your questions.
