3 ms·

My dad spent 30 years in private banking for a big swiss bank, investing money long term for rich people. His advice to me when he retired: The only way to inve

My dad spent 30 years in private banking for a big swiss bank, investing money long term for rich people. His advice to me when he retired: The only way to invest money long term and relatively risk free is through property - everything else is just bullshit.

thibaut_barrere 16y ago
I really believe this is true, from what I've seen around me. That said, bankers and advisors know that this is somehow assumed to be common sense, and quite often use that as an argument to get you onboard investments that are not interesting at all in most cases (apart for them :-).
- dedward 16y ago
  THe key point in there is "long term" .... as in youth to retirement... .and that fit the lifestyle of people who are old retired bankers now. It's still true - real-estate, by it's nature, is probably a good long-term investment when compared to anything else.
  - thibaut_barrere 16y ago
    It may be true depending on your context - but don't depend too much on "probably" :)
pchristensen 16y ago
This is assuming stable economic and population growth. There are lots of rural and inner-city property owners who could provide a cautionary tale to this theory.
- mattmanser 16y ago
  Unless he retired 20 years ago he's also talking in the context of the biggest property boom in history. Even after the current crash they're still significantly overvalued compared to their historic prices, once you take into account inflation.
  - dLuna 16y ago
    In principle I agree. On the other hand, if he has a positive cashflow from the property it doesn't really matter what its price on the open market is.
robryan 16y ago
Anyone got any knowledge of Australian real estate? Which on the surface appears to be a lot less likely to go through the same downturn American real estate faced due to population growth outpacing new housing, especially in terms of housing a short distance from decent city infrastructure.
presto8 16y ago
One big concern with real estate is that properties are extremely undiversified investments that have high transaction costs, high holding costs (taxes and maintenance), and low liquidity. The example of Amsterdam's housing prices comes to mind as an example of the risks of undiversification. Various accounts say that here has been no appreciation in house prices since 1736[1] or that it has only doubled in 350 years [2,3]. [1] http://curiouscapitalist.blogs.time.com/2007/11/14/house_prices_on_amsterdams_her/ http://curiouscapitalist.blogs.time.com/2007/11/14/house_pri... [2] http://www.finfacts.ie/irishfinancenews/article_1019261.shtml http://www.finfacts.ie/irishfinancenews/article_1019261.shtm... [3] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=598 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=598

thibaut_barrere 16y ago

I really believe this is true, from what I've seen around me. That said, bankers and advisors know that this is somehow assumed to be common sense, and quite often use that as an argument to get you onboard investments that are not interesting at all in most cases (apart for them :-).

dedward 16y ago
THe key point in there is "long term" .... as in youth to retirement... .and that fit the lifestyle of people who are old retired bankers now. It's still true - real-estate, by it's nature, is probably a good long-term investment when compared to anything else.
- thibaut_barrere 16y ago
  It may be true depending on your context - but don't depend too much on "probably" :)

pchristensen 16y ago

This is assuming stable economic and population growth. There are lots of rural and inner-city property owners who could provide a cautionary tale to this theory.

mattmanser 16y ago
Unless he retired 20 years ago he's also talking in the context of the biggest property boom in history. Even after the current crash they're still significantly overvalued compared to their historic prices, once you take into account inflation.
- dLuna 16y ago
  In principle I agree. On the other hand, if he has a positive cashflow from the property it doesn't really matter what its price on the open market is.

robryan 16y ago

Anyone got any knowledge of Australian real estate? Which on the surface appears to be a lot less likely to go through the same downturn American real estate faced due to population growth outpacing new housing, especially in terms of housing a short distance from decent city infrastructure.

presto8 16y ago

One big concern with real estate is that properties are extremely undiversified investments that have high transaction costs, high holding costs (taxes and maintenance), and low liquidity. The example of Amsterdam's housing prices comes to mind as an example of the risks of undiversification. Various accounts say that here has been no appreciation in house prices since 1736[1] or that it has only doubled in 350 years [2,3]. [1] http://curiouscapitalist.blogs.time.com/2007/11/14/house_prices_on_amsterdams_her/ http://curiouscapitalist.blogs.time.com/2007/11/14/house_pri... [2] http://www.finfacts.ie/irishfinancenews/article_1019261.shtml http://www.finfacts.ie/irishfinancenews/article_1019261.shtm... [3] http://papers.ssrn.com/sol3/papers.cfm?abstract_id=598 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=598