In 1993, I was a little boy and I was walking with my parent in the old town. I remember that in Tallinn, in the bread shop on Suur-Karja Street, fresh loose bread cost exactly one Estonian kroon, or 0.05 dollars in today's currency. Imagine if we could buy good bread for five cents now ...
Today, we pay about $ 2.5 to $ 3 for craft bread. It is also cheaper, for example, to transfer $ 1, but then it is worth noting that this is often hidden inflation, during which the size of the package is reduced as a less detectable alternative to raising the price - bread is sold in half.
Okay, how can this price increase benefit me?
If you are only a consumer, that is, you buy bread, then the short answer is that it is not useful. But more broadly, the goods around us are becoming more expensive mainly because the prices of raw materials (and other inputs) are rising. The easiest way to make the most of rising input prices is to take on the role of consumer from owner and acquire assets that behave similarly to the price of bread.
This asset is real estate. Here are some inputs that are included in the property price and you can use your imagination to guess whether these inputs will become cheaper or more expensive in the future (such as bread): Earth, concrete, wood, glass, plastic, aluminum, labor, machinery, oil, various construction foams and -mixtures, etc. Apparently, we agree that all these inputs will only become more expensive in the long run.
Now we rejoice in the price increase
If you have real estate investments, you can rejoice when you see the increased price of bread in the store, knowing that you, too, are sitting on the side of the table where it is earned. But the precondition is that you own real estate as an investment, not as your home, because you do not sell a home, you just live there.
Real estate is multifunctional, firstly, it has the ability to generate money in the form of lease payments, which is very useful. Secondly, it has typical commodity characteristics, for example, in periods of high inflation, real estate fund returns have historically been significantly higher than stock index returns.
That's why we founded the fund ...
We in this fund are working hard and working hard, but in reality the central banks of the governments are doing half the work for us themselves. It is important to understand that the value of shares and real estate does not increase in total due to the performance of the underlying assets, for the most part simply the number of money increases and the money inflates.