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Napanee, Ontario | Lol... and fair... most times you should avoid excess leverage.
The exception is in times of high inflation... we haven't seen it since the 70's (I was born in 84, so not in my lifetime..), so to be fair most don't understand how you can use it to your advantage...
An EXAMPLE will help:
lets rewind the clock back to 2019... and say the price of farmland is $10,000 /acre. A 100 ac cost a million $$
You borrow against your existing land and finance the whole $million
Fast fwd to today with high inflation, and that same 100 ac might be worth $20,000 /ac...
But the debt you used to buy it is still $1 million.
Thus, you've gained $1 million equity...
For us, the first house and 200ac we bought was $135,000 in 1981.
With inflation, that same house (some upgrades..) & 200 is $4 million 40 years later.
IF we still had the debt from buying it for $135k in 1981..it would be peanuts is today's $$.
The excessive money printing during COVID caused high inflation, and compressed maybe 2-3 decades of price gains on real estate into a few years....
SO LET INFLATION THEY CREATED KILL YOUR DEBT.
We've bought 4 tractors, a bulldozer, 2 trucks, 300 ac (pending), 2 rock trucks and a 27 ton excavator ...in the last 3 months...ALL FINANCED | |
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So how do you protect yourself from inflation?
