While there is a lot of talk about the economic stress due to the events that 2020 brought, billionaires managed to add 30% or more to their wealth in just a matter of months through this crisis.
How are some turning this tragedy into the most positive thing that ever happened to them, while others are falling further into the hole? What money moves can be made now to enjoy more of the upside potential?
Savvy Investors Are Supercharging Their Wealth
According to Business Insider, American billionaires added $282B to their wealth in just the first 23 days of the initial COVID-19 related lockdowns.
By June 2020, that number more than doubled to an additional $637B. The Guardian says they continue to add the equivalent of an extra gain of $4.7B per day.
Flashbacks To 2008: Turning Distress Into Success
These current trends appear to reignite some memories from the 2008 crisis. A time when the wealthy got wealthier and a few made it through unscathed.
It was a time when various choices were made to create a credit and housing slump. That turned into huge lottery level windfalls for those trading distressed debts and assets, like real estate. A large part of Praxis Capital’s growth occurred during this period.
A few years later, those same creditors and buyers of these assets were able to cash in big on reselling as the market magically bounced back. Credit became more accessible again, demand rose, and rents escalated quickly.
What It Means For Investors Now
Whether it is health crises or financial ones, there have been a lot of tragedies in the past year. It’s important to note the personal impacts and the side effects on local communities.
Yet, the pain out there is real. Investors are in a unique position to step in and help, to create value and solutions. For those that didn’t create the pain, it is a chance to become an alchemist for the benefit of others, with a handsome compensation for those efforts.
Overall the US property market has proven to be incredibly strong in the face of coronavirus and a hyper controversial election season. Overall, housing prices have continued rising.
Industry experts know that there is distress behind the scenes. Billions of dollars of defaulting mortgages and other properties are being traded off market.
This is creating fantastic opportunities for those with access. It means more access to discounted properties, negotiability, properties ripe for value add and repositioning, and strong cash flow for the buy and hold real estate investor.
Ray Dalio, of the world’s largest hedge fund, Bridgewater, has forecast a lost decade in stocks coming. So, for wealth preservation, growth, returns and income, the US property market appears to be one of those areas for multiplying wealth, even during chaotic times.
The next few months will be telling. They may dictate whether individuals stay in the financial slump for another decade or enjoy the best wealth building period of their lifetimes.
Check out our case studies and find out how we are investing through this and have made it through previous crises without losing a dollar of investors’ money.
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