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01. This Book
02. Syndicate Boom
03. Get Information
04. Syndicator
05. How much?
06. Depreciation
07. Depreciation Applied
08. Declining Balance
09. Straight Line
10. Paying Taxes
11. Pay Mortgage
12. Income Taxes
13. Paper Loss
14. Tax Shelter
15. Rent?
16. Syndicator Units
17. Wear + Tear
18. Lease-Hold
19. Building
20. Comparison
21. Specialized Properties
22. Growth
23. Leverage
24. Share Growth
25. Why + How
26. Syndicate Agreement
27. Net Lease
28. Long-term Lease
29. No Guarantee
30. Inflation Clauses
31. "Inflation Clause" Works
32. Inflation Clause?
33. Mortgage Due
34. Interest Rates
35. Short Term Mortgage
36. Good Mortgages
37. Refinancing
38. Refinancing Clauses
39. Share of Mortgage
40. Share of Profit
41. Purchase Options
42. How Purchase Options
43. Stunt the Growth
44. "Subordination"
45. Long Term Lease
46. Business Organizations
47. Syndicate Debts?
48. Management
49. Your Consent?
50. Sell Your Unit
51. Investment Trust?
52. Business Syndicate
53. Multiple Properties
54. Dream or Reality?
55. Syndicator's Background
56. Value of Guarantees
57. Look for Yourself
58. Conclusion
Resources
22. The Importance of Growth —A Word About Inflation
During the past 10 years the purchasing power of your dollar has declined about 50%. Think back a little further. Remember when you could buy a loaf of bread for 11 cents? Then ask an old-timer and let him tell you that 40 or 50 years ago he worked for $2.50 a week.
If anyone tries to tell you that inflation is just a temporary phenomenon, don't you believe it. It has been going on for centuries and is going to continue.
Let us take a look into the future and see whether we can form an idea how you will fare with your syndicate investment in 10 or 20 years from now. What would happen to your investment if you were to receive the same amount of dollars every year and if the purchasing power of the dollar were to decline every 10 years by one half? In 10 year a $10,000 investment with a 10% distribution would still yield $1,000. But the purchasing power would be only that of $500. In 20 years the purchasing power would shrink to $250. But not even all of that money would be yours. We have seen in previous chapters that your partner, Uncle Sam, always gets his share. So you figure out how much you will be able to buy with the income from your investment 10 or 20 years from now.
This is a problem which we all face and a problem which we all have to solve. The employee gets higher wages. (Remember it is only 20 years ago that the minimum wage was 30 cents an hour.) The manufacturers, the retailers, the farmers, get higher prices for what they sell. If your investment is to buy the same quantity of goods and services for you, you too have to get more dollars.
Yes, the amount and percentage of your yearly distribution is important. If the net yield after taxes to you is less than 10%, it may still be an excellent investment. But you do not live on percentages. What you need is food and housing and clothing and vacations. You want at least to maintain your purchasing power to buy all that. If possible, you want to increase it. What you want and what you need is GROWTH.
The growth potential of money invested in real estate is tremendous. Let's see how it works.
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