| The minimization of risk is of prime importance when | | | | should your property lose 5% to 8% value. The |
| investing. Above and beyond getting a return, what | | | | contract is quite a good one for the bank, because |
| matters most is that the main capital investment is | | | | even though you have put in say, 20% the asset |
| safe and will be returned at the end of the | | | | itself is theirs to use entirely should something go |
| investment cycle. It is only when you have satisfied | | | | wrong with their investment. Second, they have |
| yourself of this would you consider the possible | | | | complete control of the asset at all times even |
| return available to you. | | | | though it is your house. Until such time as the loan |
| The ideal investment will offer safety of capital as | | | | has been paid in full including the agreed interest, the |
| well as a high return. One way to assure the safety | | | | house is the banks to ultimately do with as they |
| of capital is to secure assets that are insurable as | | | | wish. |
| collateral for the money that has left your hands. | | | | In this way an investment can be very very safe. To |
| This is what banks do when they loan money on a | | | | find investments like this and replicate the banks |
| house purchase you may have acquired. They shore | | | | style of investing, all you have to do is invest in |
| up the investment capital in two ways, first the bank | | | | things that have insurable assets available as collateral. |
| looks for a lower equity stake in the form of you | | | | It is a simple concept, but sometimes the most |
| having a 10% or 20% deposit. This allows for | | | | effective principles are right under our nose. |
| fluctuations in the market and protects the bank | | | | |