Every one of us dreams of enjoying only the best things in life and many thinks that investing money in a real estate is the perfect solution. Yet, it is also true that with the negative things perpetrated by the media – it seems a bit scary!

Believe it or not, everything that you decide to do with your money involves risk whether it is in investing or just plainly depositing your bills under your mattress! Now you may probably wonder if it is smart to do “nothing” with your money, in this case, keeping it inside your home. You must know that your money is still not free from other forms of destruction like fire, flood, or even theft. Before you even know it, your hard-earned money is gone forever.

What if you are the type who’d rather keep your hard-earned money in a safety deposit bank? Well, consider the fact that inflation reduces your money’s buying power. More concretely, this means that your bills are only worth the currency’s present value. Over time, you will find out that you have wasted an opportunity to expand its value.

In the US, the annual rate of inflation is about 3 percent that translates to commodities increasing by almost 3 percent every year. In other words, your money is worth 3 percent less if it is being kept inside a safety box. Would you still perceive of it as “saving” when obviously your money’s purchasing power is gradually vanishing?

Let us have savings account as another example. Fortunately, for those who invested their money in savings accounts, FDIC or Federal Deposit Insurance Corporation is there to safeguard them. Save for inflation concerns! Even the most successful savings accounts out there could not offset inflation, thus there is a big chance your savings’ account interest earnings will not even sound good.

Another remarkable area to look into is stocks. Would it be best to invest in something when there is no tangible item you can hold claim to? Investing in stocks can be compared to investing in an “idea” and whether you like it or not – the only thing you can claim yours is the fact that you put in funds so that the entity you place your money into will add value to itself, which eventually increase yours.

Relatively, you also hold no control on said “idea”. Your chance of success cannot be told in advance either, since a number of factors that will come along the way have to be identified. Investing in stocks, I must say, can present a considerable amount of risk and can only be prevented if you decide to make it your profession or spend all your time doing research on the companies. This is the main reason why I am presenting the last and best option, the real estate.

Real estate is really a great field to invest in. Because it is “tangible” –real estate lends itself to seeing, touching, and improving. The risk involved is minimal as far as losing the investment is concerned. Suppose that you are faced with such a situation, insurance is there to protect you. That would be very unlikely if you opt for stocks! Another great news about real estate is that your property increases its value with inflation contrary to what happens in the case of paper currency where it loses its purchasing power over a period of time.

The bottomline: real estate gives you surprising benefits in numerous ways that includes huge tax breaks, gained equity through renter-paid deduction, equity gained through improvements, and appreciation. As I have mentioned previously in this article, any investment is not 100 percent safe. But it is in real estate where I am sure that with some forethought, you will find the most satisfaction, security, and enjoyment with your money!

Author and Realtor Alexandria P. Anderson helps clients to find and purchase Bloomington MN real estate as well as Bloomington condos and houses in the Twin Cities.