Why Can’t I buy a Real Estate?

Have you Ever think that Why You can’t afford to Buy a new Real Estate in the new area of your city even though recently you have sold your existing real estate for 5 times profit after holding it for more than 5 years? – I will Explain you in this Article Why? And What is the Solution of this Problem?

Let me tell you a story of my friend. One of my doctor friend bought the Real Estate in the Posh area of Ahmedabad city in the year 2005 for Rs.40 Lakhs. Today in the year 2009, just few months back he sold the same property for whooping Rs.80 Lakhs. And that is 2 times profit in just less than 4 years. Isn’t it amazing?

Well, today he is sitting on a huge cash pile of Rs.80 Lakhs. Just last month, he started searching to buy a new property in some other posh area of Ahmedabad city. But he was shocked after watching the current prices. He could not afford to buy a residential property of even a half the size of previous one from Rs.80 Lakhs. In fact, all the properties of the previous property sizes are selling well above Rs.1.5 Crore.

Do you also pass through the same kind of situation? Or do you also know someone who has experienced the same thing in recent past? Than read further.

I will explain you that Why this happened?

Well, this kind of incidence happens with several people all around the world in the past 2 years only. This is because the Governments and Central banks from all around the world are printing new money out of thin air and pushing it into the circulation. And this newly printed money is diluting the purchasing power of the existing money in the economy.

Since 2007, The US Government has doubled it’s monetary base (Money in Circulation) from $ 800 Billion to $ 1.7 Trillion. This means that the purchasing power of the existing dollars in the world economy is diluted to half only as that it was before 2007.

And this is the reason today my friend who sold his real estate property for whooping 80 Lakhs is unable to buy a new property of same size for a same amount. This is because the purchasing power of today’s 80 Lakhs is just Rs.40 Lakhs as that of 2007. In other words, my friend does not make any profit in the purchasing power of his money.

Of course, on paper he has Rs.80 Lakhs and that is double than the amount he invested few years back. But in terms of purchasing power it is yesterday’s (2007) 40 lakhs only or even less.

Because of printing activities of governments and central banks from all around the world, the money is becoming worthless day by day.

Moral of the Story:

Never sell your assets. Assets are always more valuable than money. Because you will never know while selling your asset that how much money your government has printed and pushed into the circulation. You will never know while selling your asset that how much the purchasing power of the money in the circulation is diluted by your Government…!!!