--- title: Why HNWs Love Real Estate Investments | Shojin description: Discover why high-net-worth individuals love having real estate within their investment portfolios. Explore the benefits of real estate investments. image: https://www.shojin.co.uk/hubfs/Blog/why%20hnws%20love%20real%20estate/why-hnws-love-real-estate.jpg --- Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you are unlikely to be protected if something goes wrong.  Take 2 minutes to learn more. Risk information **Risk summary for investments in speculative illiquid securities which are arranged by a firm by way of an online platform.**   **Estimated reading time: 2 min**   Due to the potential for losses, the Financial Conduct Authority (FCA) considers this investment to be very complex and high risk.   **What are the key risks?**   1. **You could lose all the money you invest** - By investing into a real estate project through Shojin you will be investing in a Bond instrument issued by Special Purpose Vehicles (SPV’s) which provide a funding facility for the purpose of real estate development. If the project fails, Investors can lose some or all of the money they invested. - Advertised rates of return aren’t guaranteed. This is not a savings account. If the project doesn’t pay the SPV back as agreed, you could earn less money than expected or nothing at all. A higher advertised rate of return means a higher project risk with an increased probability of losing your money. - Due Diligence and project oversight is carried out by the platform on each Shojin project that you are investing into to assess how well they are expected to perform. However, you should always also do your own research before investing. - These investments are sometimes held in an Innovative Finance ISA (IFISA). While any potential gains from your investment will be tax free, you can still lose all your money. An IFISA does not reduce the risk of the investment or protect you from losses. 2. **You are unlikely to be protected if something goes wrong** - Protection from the Financial Services Compensation Scheme (FSCS), in relation to claims against failed regulated firms, does not cover poor investment performance. [Try the FSCS investment protection checker here.](https://www.fscs.org.uk/check/investment-protection-checker) - Protection from the Financial Ombudsman Service (FOS) does not cover poor investment performance. If you have a complaint against an FCA regulated firm, FOS may be able to consider it. [Learn more about FOS protection here.](https://www.financial-ombudsman.org.uk/consumers) 3. **You are unlikely to get your money back quickly** - This type of property investment could face delays that can delay payments. These investments could also fail altogether and be unable to repay investors their money. - You have the opportunity to sell your investment early through the secondary market but there is no guarantee you will be able to find someone willing to buy. 4. **This is a complex investment** - This investment has a complex structure to ensure the interest of investors is protected. Investments are made into each designated project SPV and are ringfenced from other project SPV's to ensure full transparency of each investment made. - You may wish to get financial advice to understand how the structure works before deciding to invest. 5. **Don’t put all your eggs in one basket** - Putting all your money into a single business or type of investment for example, is risky. Spreading your money across different investments makes you less dependent on any one to do well. - [A good rule of thumb is not to invest more than 10% of your money in high-risk investments.](https://www.fca.org.uk/investsmart/5-questions-ask-you-invest) [If you are interested in learning more about how to protect yourself, visit the FCA’s website here.](https://www.fca.org.uk/investsmart) [For further information about minibonds, visit the FCA’s website here](https://www.fca.org.uk/consumers/mini-bonds). 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We share opportunities for global investors to gain exceptional returns. [Why us ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)](https://www.shojin.co.uk/invest/why-us) [Overview ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)](https://www.shojin.co.uk/invest) How to invest [![chart-line-light](https://www.shojin.co.uk/hubfs/shojin/icons/chart-line-light.svg) ![chart-line-hover](https://www.shojin.co.uk/hubfs/shojin/icons/chart-line-hover.svg) Products Explore ways to earn interest on capital or income on capital growth](https://www.shojin.co.uk/invest/products) [![chart-bar-light](https://www.shojin.co.uk/hubfs/shojin/icons/chart-bar-light.svg) ![chart-bar-hover](https://www.shojin.co.uk/hubfs/shojin/icons/chart-bar-hover.svg) IFISA Invest in a tax efficient way with our Innovative Finance ISA](https://www.shojin.co.uk/invest/products/ifisa) [![circles-three-light](https://www.shojin.co.uk/hubfs/shojin/icons/circles-three-light.svg) ![circle-three-hover](https://www.shojin.co.uk/hubfs/shojin/icons/circle-three-hover.svg) Pensions Take control of you pension by using SIPP & SSAS products](https://www.shojin.co.uk/invest/products/pensions) Who is Shojin for [![user-list-light](https://www.shojin.co.uk/hubfs/shojin/icons/user-list-light.svg) ![user-list-hover](https://www.shojin.co.uk/hubfs/shojin/icons/user-list-hover.svg) Individuals We make real estate investing more accessible for individual investors](https://www.shojin.co.uk/invest/who-is-shojin-for/individuals) [![chalkboard-teacher-light](https://www.shojin.co.uk/hubfs/shojin/icons/chalkboard-teacher-light.svg) ![chalkbord-teacher-hover](https://www.shojin.co.uk/hubfs/shojin/icons/chalkbord-teacher-hover.svg) Family offices Investment opportunities for SFOs, MFOs and HNWs](https://www.shojin.co.uk/invest/who-is-shojin-for/family-offices) [![presentation-chart-light](https://www.shojin.co.uk/hubfs/shojin/icons/presentation-chart-light.svg) ![presentation-chart-hover](https://www.shojin.co.uk/hubfs/shojin/icons/presentation-chart-hover.svg) Wealth managers We work with finance professionals and intermediaries to share opportunities](https://www.shojin.co.uk/invest/who-is-shojin-for/wealth-managers) Fund your next project We support borrowers at every step of the journey, from acquisition through to development and exit. [Why us ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)](https://www.shojin.co.uk/borrow/why-us) [Overview ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)](https://www.shojin.co.uk/borrow) Products [![git-fork-light](https://www.shojin.co.uk/hubfs/shojin/icons/git-fork-light.svg) ![git-fork-light-1](https://www.shojin.co.uk/hubfs/shojin/icons/git-fork-light-1.svg) Whole loan We provide a combination of senior and junior debt to allow developers to take on larger schemes](https://www.shojin.co.uk/borrow/products/whole-loan) [![house-line-light](https://www.shojin.co.uk/hubfs/shojin/icons/house-line-light.svg) ![house-line-hover](https://www.shojin.co.uk/hubfs/shojin/icons/house-line-hover.svg) Mezzanine Top up funding that allows you to minimise your contribution, enhancing your return on capital whilst maintaining full control.](https://www.shojin.co.uk/borrow/products/mezzanine) [![door-light](https://www.shojin.co.uk/hubfs/shojin/icons/door-light.svg) ![door-hover](https://www.shojin.co.uk/hubfs/shojin/icons/door-hover.svg) Bridge Short-term senior and junior debt for land acquisition, refinancing, and conversions.](https://www.shojin.co.uk/products/bridge) [![door-light](https://www.shojin.co.uk/hubfs/shojin/icons/door-light.svg) ![door-hover](https://www.shojin.co.uk/hubfs/shojin/icons/door-hover.svg) Stabilisation and finish & exit Investment finance for completed or near-complete schemes that need time to optimise value before permanent refinancing or sale.](https://www.shojin.co.uk/stabilisation-finish-exit) How to borrow [![tree-structure-light](https://www.shojin.co.uk/hubfs/shojin/icons/tree-structure-light.svg) ![tree-structure-hover](https://www.shojin.co.uk/hubfs/shojin/icons/tree-structure-hover.svg) How it works Our process focuses on delivering an exceptional outcome for all parties.](https://www.shojin.co.uk/borrow/how-it-works) [![laptop-light](https://www.shojin.co.uk/hubfs/shojin/icons/laptop-light.svg) ![laptop-hover](https://www.shojin.co.uk/hubfs/shojin/icons/laptop-hover.svg) Apply Submit your application or request a call back](https://www.shojin.co.uk/borrow/how-it-works#APPLY) Elevate your investing Browse our blog for news, features, market update and special reports to build your real estate investing knowledge. [All insights ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)](https://www.shojin.co.uk/insights) Insights [![trophy-light](https://www.shojin.co.uk/hubfs/shojin/icons/trophy-light.svg) ![trophy-hover](https://www.shojin.co.uk/hubfs/shojin/icons/trophy-hover.svg) Masterclass Watch our webinars on demand](https://www.shojin.co.uk/insights/tag/masterclass) [![files-light](https://www.shojin.co.uk/hubfs/shojin/icons/files-light.svg) ![files-hover](https://www.shojin.co.uk/hubfs/shojin/icons/files-hover.svg) Special reports Read our reports and research](https://www.shojin.co.uk/insights/tag/special-reports) [![notification-light](https://www.shojin.co.uk/hubfs/shojin/icons/notification-light.svg) ![notification](https://www.shojin.co.uk/hubfs/shojin/icons/notification.svg) Market updates Expert insight and analysis](https://www.shojin.co.uk/insights/tag/market-updates) [![note-pencil-light](https://www.shojin.co.uk/hubfs/shojin/icons/note-pencil-light.svg) ![note-pencil-hover](https://www.shojin.co.uk/hubfs/shojin/icons/note-pencil-hover.svg) Blog Stay up-to-date with news and views](https://www.shojin.co.uk/insights/tag/blog) Resources [![question-light](https://www.shojin.co.uk/hubfs/shojin/icons/question-light.svg) ![question-hover](https://www.shojin.co.uk/hubfs/shojin/icons/question-hover.svg) FAQs](https://www.shojin.co.uk/faqs) [![list-dashes-light](https://www.shojin.co.uk/hubfs/shojin/icons/list-dashes-light.svg) ![list-dashes-hover](https://www.shojin.co.uk/hubfs/shojin/icons/list-dashes-hover.svg) Glossary Learn and understand some of the terms we use in materials such as investment memorandums.](https://www.shojin.co.uk/glossary) [![video\_library\_FILL0\_wght100\_GRAD0\_opsz24](https://www.shojin.co.uk/hubfs/ICONS/New%20Icons/video_library_FILL0_wght100_GRAD0_opsz24.svg) ![Artboard 1](https://www.shojin.co.uk/hubfs/ICONS/New%20Icons/Artboard%201.svg) Video explainers Watch our short video FAQs](https://www.shojin.co.uk/video-faqs) Our company Shojin is an FCA-regulated fractional investing platform enabling global investors to build their wealth from UK-based real estate investment opportunities. [Contact us ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)](https://www.shojin.co.uk/company/contact-us) Learn more [![globe-light](https://www.shojin.co.uk/hubfs/shojin/icons/globe-light.svg) ![globe-hover](https://www.shojin.co.uk/hubfs/shojin/icons/globe-hover.svg) About us Our mission, vision and purpose](https://www.shojin.co.uk/company/about-us) [![users-three-light](https://www.shojin.co.uk/hubfs/shojin/icons/users-three-light.svg) ![user-three-hover](https://www.shojin.co.uk/hubfs/shojin/icons/user-three-hover.svg) Team We're an experienced team of real estate and investment professionals](https://shojin.co.uk/company/about-us#TEAM)   [![list-checks-light](https://www.shojin.co.uk/hubfs/shojin/icons/list-checks-light.svg) ![list-checks](https://www.shojin.co.uk/hubfs/shojin/icons/list-checks.svg) Careers Take your career to the next level](https://www.shojin.co.uk/company/careers) [![git-fork-light](https://www.shojin.co.uk/hubfs/shojin/icons/git-fork-light.svg) ![git-fork-light-1](https://www.shojin.co.uk/hubfs/shojin/icons/git-fork-light-1.svg) Partnerships Partner with us to increase access to real estate investing](https://www.shojin.co.uk/company/partnerships) [Blog](https://www.shojin.co.uk/insights/tag/blog) 3 min read # Why HNWs love real estate investments ![](https://www.shojin.co.uk/hubfs/Blog/why%20hnws%20love%20real%20estate/why-hnws-love-real-estate.jpg) ![](https://www.shojin.co.uk/hubfs/Blog/why%20hnws%20love%20real%20estate/why-hnws-love-real-estate.jpg)     [City AM](https://www.cityam.com/360000-new-millionaires-created-off-back-of-property-boom-despite-cost-of-living-pinch/) recently reported that a staggering 36,000 new millionaires have been created as a result of the post-pandemic property boom, taking the UK population’s number of millionaires in dollar terms above 600,000.   Arguably no one understands the need to diversify better than the average high-net-worth individual.   Although the term high-net-worth can mean different things in different contexts, for the purposes of this article we will use the most commonly accepted definition.  An individual is classified as being high-net-worth if they have access to at least $1 million in liquid financial assets.   We have already discussed the importance of diversification from several different perspectives, but today we will examine exactly why those with over $1 million to invest remain so deeply attached to real estate as an asset class.   **The first rule of investing: don’t lose money!**   This might sound blindingly obvious, but it needs to be unpacked in a little more detail.   Say you invest in some financial asset valued at £1,000.  Soon, due to some external factor changing, the value of this asset falls sharply to around £500.  As we have seen in previous articles, such dramatic falls in the stock market are not only possible but have in fact occurred with reasonable regularity over the past twenty years.  From the bursting of the Dot.com bubble in the early 2000s to today’s market turbulence, the only certainty offered by equities is that periodic crises are inevitable.   In the example above, where the value fell from £1,000 to £500, this equated to a 50% decline in your capital.  What sort of an increase would you need to see in the other direction to get you back to where you started?  Would 50% do?   No!  To return from £500 to £1,000, you need to see a 100% increase, because this is now measured against the lower starting value.  So, put simply, to recover from a 50% decline, you need a subsequent 100% increase in value.   Even more telling is the fact that even if you earnt an impressive 10% per annum on the above hypothetical investment, after the 50% loss of capital value you would need a full 10 years of 10% returns to recover the initial loss.  And then at the end of this arduous 10-year process you have only arrived back to where you started; you still haven’t increased your net worth yet.   As such, it is easy to see why long-term successful investors like Warren Buffet have always subscribed to the famous first rule of investing – don’t lose money.   **Capital preservation plus compounding equals long-term success**   Essentially, whilst high-net-worth individuals are wealthy by both local and global standards, they are unlikely to be wealthy enough to shrug off a large or sudden loss of capital.  They are, at the risk of generalising a bit, also unlikely to be the sort of person who is happy to ‘gamble’ with their money, and are likely to prefer sensible, well thought through investment schemes over get-rich-quick speculation.   As such, high-net-worth individuals are always diversified across their holdings, with portions of their capital allocated between stocks, bonds, and funds on the one hand, and alternatives, especially real estate, on the other.   Real estate can offer such a large amount to such diversified portfolios because it fully satisfies the first rule of investing – over the long-term it is incredibly difficult to lose money on real estate assets – but as well as preserving capital, property investment also offers both rental income and the chance for capital appreciation over time.   If preservation of capital alone is the main objective, then a laddered portfolio of high-quality US and other developed market government debt would be a viable option.   However, the income yielded by such investments would be very low in relative terms and would therefore not make it attractive to anyone either looking to draw an income from the assets today or to simply earn interest-on-interest and reinvest the income as it is earnt.  Plus, the possibility for capital appreciation in a purely bond-based portfolio is negligible, unless you are willing to position yourself at the far end of the yield curve and place bets on the direction of future interest rates.   **Real estate as the foundation of a well-diversified portfolio**   Real estate, on the other hand, offers not only excellent capital preservation characteristics as some corners of the bond market do, but also offers the chance for capital gains as well.   As can be seen in the graphic below sourced from a report by [KKR](https://www.kkr.com/global-perspectives/publications/regime-change-enhancing-the-traditional-portfolio), real estate has an enviable record in terms of producing real returns, even in high inflationary environments. ![](https://www.shojin.co.uk/hubfs/Imported_Blog_Media/b42f0af9-5b48-4c25-9f9f-ec5b2eb8d2cc.png)Whilst equities can struggle as soon as the economy runs into headwinds, real estate and the related asset class of infrastructure both have held up well historically through periods of high inflation.  This is just another reason why the wealthy have always preferred to keep a sizeable portion of their assets in the real estate sector.   Here at Shojin we believe the strengths of real estate as an asset class can and should be enjoyed by everyone, regardless of their net worth.  If you are in any way unsatisfied with the performance of your portfolio of traditional assets, it is highly likely that adding in a real estate component could improve the performance of your portfolio from either a capital preservation, capital appreciation, or an income yielding perspective.   [Written by Shojin](https://www.shojin.co.uk/insights/author/shojin) Published 21 July 2022 Back to top![](https://www.shojin.co.uk/hubfs/shojin/icons/backto-top.png) Subscribe to newsletter Subscribe to receive the latest Shojin insights and resources to your inbox every week. #### Share this post - [![](https://www.shojin.co.uk/hubfs/shojin/icons/share-linkedin.svg)](http://www.linkedin.com/shareArticle?mini=true&url=https://www.shojin.co.uk/insights/news/why-hnws-love-real-estate-investments) - 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[Sign up ![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light.svg)![](https://www.shojin.co.uk/hubfs/shojin/icons/arrow-right-light-white.svg)](https://portal.shojin.co.uk/user/register) ## Go further with Shojin ![key-light](https://www.shojin.co.uk/hubfs/shojin/icons/key-light.svg) 1. More opportunity No management fees. Smaller sums to take part. Lowered barriers for access. ![chalkboard-teacher-light](https://www.shojin.co.uk/hubfs/shojin/icons/chalkboard-teacher-light.svg) 2. Shared risk Shojin earns revenue based on the success of each project. We share in the risk and rewards together ![user-list-light](https://www.shojin.co.uk/hubfs/shojin/icons/user-list-light.svg) 3. Knowledge We use our thorough due diligence and expertise to ensure the best outcome – and you’re not left out the loop. ![line-segments-light](https://www.shojin.co.uk/hubfs/shojin/icons/line-segments-light.svg) 4. Wealth You get paid out before we do. 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The risks involved will vary by project types, so please make sure you have read and understood the specific risks associated with the investment. Investments made on this website should only be made as part of a diversified investment portfolio. For more details, see the Key Risks. Projections or estimated returns are not a reliable indicator of actual future performance and eventual returns or dividends may be lower than predicted. Information presented on this website is for guidance purposes only and does not constitute financial advice. If you are unsure of the suitability of an investment, please contact your financial adviser for professional advice. Shojin is a trading name of Shojin Financial Services Limited. This website is a financial promotion approved by Shojin Financial Services Limited which is authorised and regulated by the Financial Conduct Authority (FRN: 716765) (see [www.fca.org.uk/register](https://www.fca.org.uk/firms/financial-services-register) for more information). Companies that issue investments on this platform, including bonds issued by Shojin entities, are not themselves regulated by the Financial Conduct Authority and investments made on this site are not covered by the Financial Services Compensation Scheme. The investment opportunities listed on this website are not offers to the public and can only be entered into by certain types of investors who have satisfied certain investment criteria. 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