Why real estate and what is stopping nearly 9 out of 10 people?
In order to fully understand the Wealth Effect, it is important to understand that 49% of the world’s wealth is held in real estate. For as long as humans have accumulated wealth, land and real estate has been the number one vehicle for growing and preserving wealth.
However out of 7 billion people globally, only 12,9% of people have access to real estate and the subsequent wealth affect it causes. There are three major levels of the barrier to entry to access everything which the 12.9% benefit from. For example, most people in the western world don’t realise they could go to school because their parents actually owned a home, plus countless other advantages that are taken for granted.
First major barrier to entry: The greatest barrier to entry in most parts of the world is pure access.
According to Niall Ferguson, historian and TED speaker, there has been a complete disproportionate increase of wealth in the West than the East, with the average American being 20 times wealthier that the average Chinese person in the last 200 years. But this is fast changing and is now down to 5 and soon to be 2 ½.
The original obstacle is pure access to the benefits of real estate ownership, but with the interconnected planet, people can soon invest virtually anywhere. Crowdfunding real estate is going to create more and more opportunity, with or without government support. Just as social media brought down entire governments in the Arab Spring, once people realise there is a better way, they will do what it takes to have access to the same rights, freedoms and mechanisms for creating wealth.
Watch his TED talk on Niall Ferguson: The 6 killer apps of prosperity.
Second barrier to entry: Literacy, the catalyst to the future.
In an interview by Tim Ferris it was explained there are one billion illiterate people on the planet. 2/3 of them are woman and over 250 million are children. In Africa alone 1.6 million teachers are required by 2015 to teach all the children who need schooling.
It is impossible problem to solve, as they could never train enough teachers, let alone build enough schools. This was until the advent of the tablet, technology and crowdfunding.
By 2016 there are expected to be a billion handsets in Africa. 10 years ago there were 10 million people on the Internet globally, now it is 2 billion and in 6 years it will be 5 billion. With this proliferation of tablets and access to the Internet, a Massai warrior in Sub Saharan Africa now has more access to information than Bill Clinton did when he was USA President in the 1990s and leader of the free world!
Add to this Peter Diamandis, who through Indegogo crowd funded the Global Learning XPrize offering over $15 million in prize money to companies who could in 18 months teach children literacy through software on a tablet.
Once empowered through literacy there are no limits to wealth creation and joining the middle class as evidenced by 400 million people in China and India. As Bill Gates said: “Literacy is the only sustainable solution for the planet, for peace and stability.”
The third major barrier to entry is education, experience, geography and the funding gap.
Even in the Western Parts of the world, where people have ample access and neither of the constraints above, there are still substantial barriers to entry. Most people do not understand why the top 1% are the only ones who can retire and have enough money, or why they have the majority of the wealth.
Our education system has institutionalised us, trained us for the industrial revolution and prepared us to work for big business. We are constantly told that we don’t know enough knowledge and we need financial planners, governing bodies like the SEC, MAS, FSB, ASIC, etc. to protect us and only big business can look after our money.
However nothing we are told is actually the truth. Big business constantly encounters ethical problems and certainly doesn’t have the individual interests at heart. The average REIT, Fund or retirement plans, generates billions in fees and revenue and yet only offers poultry return to the investors, after all the fees, it barely beats inflation and it is why so many people remain stuck. Many people actually ask if the regulators are truly there to protect the individuals and not big business, why do they seem to continually protect big business, even when things are so blatantly wrong.
More and more people are realising it is not working. People in the 21st century are realising that investing is more about common sense. We are intelligent enough to find a date online, purchase goods on EBay, book a holiday or a taxi online, do our Internet banking and so why shouldn’t we be able to invest online. Our peers are far better judges of how to have a good holiday than travel agents are. Our peers are far better judge of who can be trusted on EBay when buying or selling than the proverbial shopkeeper. Our peers assist us in so many aspects of our lives already, why not investment? The social proofing will be far safer than anything the current system can provide.
People realise now though they need the education, what they are not taught at school, so that they can make educated an informed decisions in real estate. They want to invest like the top 1% and partner with the best globally and have access to the best off-market opportunities that have never been accessible to them. Whether it is residential, commercial, international or even doing developments, there is a funding gap and people don’t know how to get involved, can’t get financing or don’t know how to go to the next level or benefit from the best opportunities globally.
"Our purpose, through leading #WEALTHMOVEMENT, is to at least double this to 25% globally by 2020 and give access to another billion people who are like-minded and understand the power of the crowd working together, just like in nature. As when birds fly in a flock, versus flying on their own, a bird in a flock can fly 70% further than a bird on their own.”
Crowdfunding bridges all the barriers of entry, bringing like-minded investors together to partner with the best globally, have access to the best opportunities and most importantly create global wealth for all involved.
#WEALTHMOVEMENT can achieve this through the power of the crowd and technology, by helping investors gain access to invest and partner with the safest and best opportunities locally or internationally, while letting real estate providers have access to the depth and quality of global investors.
It provides a global, self-service, crowdfunding real estate solution, which takes advantage of local real estate markets, through best-of-breed partners, efficiency, a global IT platform and collective buying power.
#WEALTHMOVEMENT creates global wealth for all.