Downloading movies is a "stealing" act, it would cost millions dollar to the industry. BUT, do you know that real estate investing could cost millions of working lives? Nowadays, people go to work, earn money, just to pay for their mortgages, their rents...
3. when the economy goes into recession
THE ECONOMIC CYCLE
The economic cycle refers to fluctuations in production or
economic activity of that nation
4. when the economy goes into recession
THE PROCESS
ASSUME EACH SQUARE IS A PIECE OF LAND/ PROPERTY
A, B, C AND D ARE UNEMPLOYED
5. when the economy goes into recession
A B
owned by residents A,B,C and D
empty land
C D
THE PROCESS
ASSUME EACH SQUARE IS A PIECE OF LAND/ PROPERTY
A, B, C AND D ARE UNEMPLOYED
11. when the economy is getting better
B,C and D get jobs
Each earns $20,000 p.a.
A B A opens his own
restaurant
C D
THE PROCESS
12. when the economy is getting better
B,C and D get jobs
Each earns $20,000 p.a.
A B A opens his own
restaurant
Government spend less on
S C D dole
More money to build public
structure (train station from
THE PROCESS
13. when the economy is getting better
B,C and D get jobs
Each earns $20,000 p.a.
F E A B A opens his own
restaurant
Government spend less on
S C D dole
More money to build public
structure (train station from
G H I L
More people move in this
town: F, E, G, H, I, L. Those
people buy land, build
factory, make goods to
satisfy demands for
THE PROCESS
18. F E A B
S C D
The investor then sell
his land for $200,000
G H I L
THE PROCESS
19. F E A B
S C D
The investor then sell
his land for $200,000
G H I L The investor made $100,000
profits over 3 years for “sit
and wait”.
A,B,C and D worked during 3
years
THE PROCESS
Each dollar they made from their own hard work are the same with each dollar the
investor earned from sit and wait. The investor is stealing/ or “sharing” the
purchasing power of A,B,C,D from their production.
21. Now back to a situation
A B before F,E,G,H,I and L move
in the town:
S C D
EFFECTS ON PRICES
22. Now back to a situation
A B before F,E,G,H,I and L move
in the town:
Investor(s) bought the
remaining lands/ properties
$100,000 each
S C D
EFFECTS ON PRICES
23. Now back to a situation
A B before F,E,G,H,I and L move
in the town:
Investor(s) bought the
remaining lands/ properties
$100,000 each
S C D F,E,G,H,I,L want to move in
and start business
EFFECTS ON PRICES
24. Now back to a situation
A B before F,E,G,H,I and L move
in the town:
Investor(s) bought the
remaining lands/ properties
$100,000 each
S C D F,E,G,H,I,L want to move in
and start business
BUT no more lands are
available
EFFECTS ON PRICES
27. Investor(s) will either
sell the land for $300,000
F E A B each or
lease the land at really high
rate
S C D
G H
EFFECTS ON PRICES
28. Investor(s) will either
sell the land for $300,000
F E A B each or
lease the land at really high
rate
Either ways it results in
higher land input costs for
S C D businesses
Final products will be priced
at high level, inflation will be
pushed up
G H
EFFECTS ON PRICES
29. Investor(s) will either
sell the land for $300,000
F E A B each or
lease the land at really high
rate
Either ways it results in
higher land input costs for
S C D businesses
Final products will be priced
at high level, inflation will be
pushed up
G H Only F,E,G and H can afford
high land costs, economic is
under production
EFFECTS ON PRICES
