Real estate vs the stock market as an investment
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- Опубліковано 28 вер 2024
- I just sold a 12.5k investment for 1.5M, whats the catch? It was a 39 year investment that literally took thousands of hours of my time. There is no way to get rich quick that does not involve pure luck or something illegal. If you are interested in LONG term investing, this video is for you. No day trading, no tricks, just old fashioned low risk investing.
Many people have commented that I "made a mistake" by not taking the mortgage into account. I DID take the mortgage into account. Do all the spreadsheets you want, after 10 years it started generating profit after all expenses including prop tax, mtg, water, maint, etc were taken into account. After 20 years, the income generated was enough for me to retire on again, after all expenses including prop tax, mtg, water, maint, etc were taken into account. When the mortgage was paid off, it was generating $6000/mo with my only expeses being HOA, taxes, and insurance.
Many people have commented that I "made a mistake" by not taking the mortgage into account. I DID take the mortgage into account. Do all the spreadsheets you want, after 10 years it started generating profit after all expenses including prop tax, mtg, water, maint, etc were taken into account. After 20 years, the income generated was enough for me to retire on again, after all expenses including prop tax, mtg, water, maint, etc were taken into account. When the mortgage was paid off, it was generating $6000/mo with my only expeses being HOA, taxes, and insurance.
I'm 32, and I lost my dad about six months ago. I’ll be receiving some money soon. Would it be wise to grow my money in stocks for a few years while I'm in business school, and then invest in rental properties? Or should I start with real estate investing right away?
I'd recommend seeking the advice of an experienced financial professional. It might seem pricey, but as the saying goes, 'you get what you pay for.'
Very sorry for your loss. As she had just said, consult a financlal expert (and in the case of rentals would be worth contacting some landlords to get an idea what's involved in running rentals. Many people think of rentals as "passive I come" and underestimate the work involved (even with a management agency), not to mention if a tenant stops paying or major repairs occur. A lot to think about!)
I agree, investing with the help of an advisor set me up for life. Retired with about $1.6m in stock portfolio only. I max out my 401k and have few properties. I worked hard everyday as a teacher for 32 years, and my salary was over 100k annually. Supplementing my income with stocks and alternative investments helped me achieve early retirement.
I've worked in real estate for over 25 years and have neglected a major stock portfolio. This served me well when I was flipping and renting houses, however I need a different plan now.. mind if I look up the professional guiding you please?
Sure you can! Melissa Elise Robinson is the advisor I work with. Just search the name. You’d find necessary details to work with to set up an appointment.
I think investors should always put their cash to work, especially In 2024, we'll start to see more market diversification. I'm hoping to invest about $350k of my savings in stocks against next year. Hope to make millions in 2024
Since risk is at an all-time high right now, perhaps you should be a little more patient and return when it has decreased. Alternatively, you can consult a trained financial expert for strategy.
Yes true, I have been in touch with a brokerage Advisor. With an initial starting reserve of $80k, my advisor chooses the entry and exit commands for my portfolio, which has grown to approximately $550k.
I’ve been looking to switch to an advisor for a while now. Any help pointing me to who your advisor is?
NICOLE ANASTASIA PLUMLEE is her name. She is regarded as a genius in her area and works for Empower Financial Services. She’s quite known in her field, look-her up.
I searched for her full name online, found her page, and sent an email to schedule a meeting. Hopefully, she responds soon. Thank you
Thank you Scooby. Short and sweet. I learned not too long ago that real estate is not for me. Dealing with tenants and all the work that goes into real estate that you described in the video is not for me. I think a lot of people assume real estate is easy money and that everything works out perfectly. Although my situation was good, I was unrealistic with how much work actually goes into it. In addition, rent control is becoming more common which makes it harder to make a profit. Plus you have to think about the ethical considerations of evicting a family that can't pay rent. I'd rather click a button and invest in stocks and move on with my day. To me, the time and stress you put into owning real estate isn't worth the extra money you could potentially make over the stock market.
I never rent to anyone whose credit is not good enough to buy my house. I rent to people who choose to rent
@@scooby1961 yeah, but sht happens and people get cancer etc., and a 20-year perfect tenant with an 820 credit score may find themselves unable to work and pay rent. What would you do? How many months do you let them get behind before you send Andy Griffith over to forcibly remove them?
@@ev25zv stock market could collapse, the executives of the companies driving the major growth in your etfs could go to jail and they tank then all your gains are gone. '08 repeat etc..people lose everything in the stock market all the time. fear need not be a contributing factor in your risk analysis.
i own quite a few rentals in a very much so low income market and things are going very well. As scooby said run credit, run background checks, understand ALL your costs and your income. plan for vacancies before purchase, not super difficult. if you want to be hands off price in a property manager. You're probably not going to keep all your tenants forever, just make systems for when someone leaves to get it rented again its pretty easy to turn around.
@scooby i watched you in highschool ~2010 you certainly helped me develop a more balanced physique, just now stumbling upon your videos again glad to see you're still you!
You are correct in that the leverage that the loan gives is what makes many rich much faster on real estate vs investing in stock market, but its important to remember that the leverage goes both ways, if the value increases 1% and your leverage with load is 10x, then your investment goes up 10%. But opposite is true if the market goes down. It is difficult to know how the housing market will look in 10 years and what will be a good area to invest in (you might have a bit of survivorship bias having been successful).
Your example here at 3:14 neglects that you only put down 10% on the house, and still owe the other 90%, so you didn't subtract that remaining cost. After that, then you can get the true return, which at 42x, is still better than S&P. But as you are very open and transparent in the video, the rental property needs maintenance and work, as basically a second job, so perhaps it's a personal judgement call if the extra returns are worth the extra work.
Its important to do that spreadsheet!!!!!! Yes, I am neglecting a lot of things that I consider to be minor. I just sold my condo which rents for $5000/mo whose loan had been paid off for 1.5M - that is the big picture. I didnt include my taxes on that house were $175/mo, the insurance which was $125/mo, the opportunity cost of the thousands of hours of work I put in on the house, or the HOA fees which were $300/mo.
Not only 90%, but 90% with interest over 30 years or so! He also fails to keep investing in the stock market for 40 years in the first scenario! That "minor" detail distorts the picture immensely!
@@beefchampion2792he also left out the 5k per month rent though. So you gotta factor that in.
@@beefchampion2792 You can also keep investing in real estate by buying another property, so that there was an equal example.
@@scooby1961 OK, I got all my questions answered. Can you tell me if you ever had any trouble with the HOA board? We bought a condo in '94 and then moved to another state. We rented it out initially and it was fine using a property manager. But when the renter left we decided to sell because we just had a really bad feeling about the condo board. It was ripe for embezzlement and we knew many owners weren't paying their dues. Of course, in San Jose, the place went way up in value since 2000 when we sold it and that place could have helped finance my early retirement as well as some income gaps along the way.
Thank you for sharing your experience and thoughts Scooby ❤
You are so welcome
Uncle Scoob, we need more of these gems of experience from you. What I love about your channel is the diversity of the contents.
Training, investing, travelling, engineering just overall a beautifully balanced life. So glad to know you although I am thousand of miles away. Someone I can look up to and learn useful information unlike mostly garbage state of the internet.
Thanks!
1. Interest payments
2. Insurance
3. Council rates
4. Property maintenance
5. Depreciation
6. Buying/selling agent fees
7. Liquidity
8. Flexibility
9. Diversification
10. Interest rate risk
11. ???
So your spreadsheet says I have 1.5M in inaginary money? Guess I will just throw it away then.
Why not add a monthly contribution to the investment like the mortgage was for the real estate?
I believe in investment of your own home to live in but not things like a rental property etc due to the headaches. I think it might be best to buy your own home and then invest in the market etc for retirement.
Its a choice!
Would you say you got lucky? Considering there are a lot of factors that could go wrong. Without a doubt you worked hard on it.
@@L32C-yg9hm I would not say I am lucky but I did understand the concept of both compound interest and time at young age. When I were a much younger man right out of technical college I watched all my classmates get on tool trucks and enter a loan contract equivalent to a monthly mortgage payment at the time. Once people realize how much stuff they do not need in life then it becomes much easier to both save and invest for the future.
In the UK we need to put 25% down min for rental properties, your interest liabilities are taxed as if it is income (yes you heard that right) and we don’t have 1031s. Stamp duty tax paid upon purchase and capital gains tax paid on sales :(
We can invest in the stock market £20k per year tax free though :)
Scooby, I live in the Bay Area (CA) working as an engineer. I am currently renting and saving money, investing it in the stock market. My question is, since I am not sure I want to live in the Bay Area, let alone CA long term, is it okay to keep doing this (renting) and wait to buy a house when I want to settle down in the future? Since I am on the younger side, I appreciate the flexibility of renting, plus am not sure if the overhead of being a landlord is something I want to take on. I just don't want to make a mistake here by not getting into the real estate market early enough
Buy somewhere nice where you might want to retire some day and rent it out until you do!
So I cannot do better returnwise than dollar cost averaging by picking stocks because markets are efficient, but I can improve returns in real estate by picking the right location. How does that add up? 🧐
He doesn't even add money to his initial 12.5k in the stock market, while he constantly adds money to his mortgage in scenario number 2!!!!!!!!!!! The example scenarios are extremely misleading anyway! They are nothing alike!
Believe me stock markets are not efficiënt. There is a big difference between being efficiënt and being efficiënt 98% of times.
During corona some companies decreased in value 80% and 12 months later increased again 400%. Do you think a company can changes so much in 12 months that it is a totally different company?
Read a book about value investing to understand more about it.
Bud 99% of most people are better of buying a broad based index fund. Because stock picking is a full time job. Guy Spiers and monish Pabray spend more then 6 months to analyse a company before they buy. Most people dont even read the annual rapport😂.
If It wasn't for my "experience" I'd agree with you. I am currently doing $300/day on ebay, and around $150-$220/day on Amazon. It has been around this range for years, and i am in my early 30s. I spent less than you invested in S&P 500 to get started, and I will reach your amount within 8 years, respectfully.
Also, when it comes to real estate, you have to deal with maintenance cost. It's a huge headache, especially with insane tenants. Your property value could also decrease, so it could end up being a liability. I have no wife/kids, so I don't care to own a home. There are REIT shares giving out 19% dividends that'll earn you the same amount you rent out your home if we're going by 1% on an annual basis. Example if the home is worth 150k you rent it out for $1,500/monthly. You can do this without the headaches with simple dividend shares.
👊 *This lady near me is in her 70's she turned her home into an AirBnB she's pulling in 200k+ a year while she stays in a camper outside her home.* I know they are grabbing cash hand over fist Which is great but I wish a law was passed forcing AirBnB hosts who are near a school or not to screen for the safety of neighbors and kids.
A lot of people squat, and then you need to go to court to evict them. Airbnb is not a good place to find tenants.
@@L32C-yg9hm People want those short gains BUT! I hear if you do this you lose your Homestead exemption. So if enough neighbors are fed up they have to pay back taxes for keeping homestead while not residing in the home. This lady had 10+ people in her home at $200 per night. The cops had to come and remove everyone. The person is like "I have a contract" The cop is like if you don't go you will go to jail. They were vandalizing homes nearby while staying in a neighborhood.
Did you just ignore the fact that you have to pay for the rest of the house? How is that a fair comparison? Also, you're comparing your better than average real estate investment to an average stock market investment (S&P 500 vs say, a good stock investment such as Google, Apple, Walmart, Starbucks, etc.).
Yes, I am neglecting a lot of things that I consider to be minor. I just sold my condo which rents for $5000/mo whose loan had been paid off for 1.5M - that is the big picture. I didnt include my taxes on that house were $175/mo, the insurance which was $125/mo, or the HOA fees which were $300/mo. Do your spreadsheet and decide what is best for YOU. There is literally no way to fully model a rental property like this so you do the best you can.
@@scooby1961 100% agree with doing your own spreadsheet but I wouldn’t consider those extra added expenses as minor. If you invested all those expenses in the stock market the return would be immense. Either way, diversity is key I’m sure you did both.
I also dont understand the 52x vs 31x comparison. You actually had to pay the $125k (plus mortgage interest?) somewhere in 1985-1995. So it is still just 12x return (still great though).
Also, If you have put that money in stocks, you could spend your time earning more money elsewhere rather than taking care of the condo.
For me, it's the stock market. the real state might be better, but I don't have the time or the will to do it.
Since you sold the condo, are you buying more real estate with the money ? It would be amazing to see the process..thank you
Yes, I did a 1031 exchange for a rental property closer to me
Is the property you exchanged it for better or nicer?
You should make a video on how to screen for tenants.
I started weight lifting almost 15 years ago because of your channel. Learned a lot from you and became very aware of my nutrition.
So how much x is real-estate when you factor in interest on the mortgage, materials for repairs, property taxes etc
Do your own spreadsheet and decide but it wont change the fact that by the time you pay off the 30yr mortgage, you can live off the rent. Try that trick with the stock market
@scooby1961 I don't know how to. I just think saying " I made 1.2 million on my 12k investment " is a little dishonest. I'm not saying real estate is a bad investment but when you're paying off interest, yearly taxes, home insurance, repairs I huge chunk of that 1.2 million is missing. Even after all expenses paid why not day you made 1 million? It's a little more realistic
Scooby do you believe there's any money in being a landlord if you DO NOT do your own repairs? For example, I have the income to buy a small property and turn it into a rental, however, I do NOT have the skills nor desire to maintain the repairs my self. Is there any money in renting if you hire professional plumbers and contractors to do all the repairs as they pop up over time?
Awesome video.
You need to take the mortgage payment and then add that into stock market investing every month. Then compare the both. This is the most equivalent comparison.
Sure you can buy a house with less than 10% down but then your mortgage is going to be Sky High those young people don't have the money to pay 4,000 mortgage 4 months because most houses go for half a million plus what 10% down that's how much you're going to pay probably even more with taxes depending on where you live don't forget the maintenance and the upkeep cost
Keep renting then.
I like this vid. Good insight. thank you sir.
The Dow S&P and Nadaq are all topping right now and will most likely go down for the next few years, Gold and Silver and commodities in general are just getting warmed up for a multi tear run, esp the Gold and silver mining companies.
Maybe
Scooby is a personal trainer and financial advisor rolled into one.
You can still be 10x leveraged in the stock market with out of the money options, albeit with a very different risk profile. Also with current 6%+ interest rates you end up paying more than double the original value over 30 years, hopefully you would be able to refinance at some point but you never know.
Damn UA-cam og still doing it
Awesome video scoob! Crypto can also be a very good investment whenever prices crash down and the U.S finally decides to regulate it, as of now the only legal cryto is XRP everything else is considered illegal unregistered securities until proven otherwise (even Etherium & Bitcoin according to the SEC in Ripple vs SEC), real assets like houses or commodities are way better especially for preserving wealth while you grow it, don't lose your shirts people! Leave that to Scooby!
ua-cam.com/play/PLWV7fhqk4Gf0VxEXwFK7XgBlQ6wXhN208.html
You would have made additional payments on your mortgage including interest, plus taxes, insurance and maintenance costs. How much did you spend in the first ten years? Plus you can’t sell part of a house to invest in better opportunities. What happens if property prices fall or you lose your income?
USE A SPREADSHEET! How many times do I need to say this????
@@scooby1961You could have explained it better.
Ive given you my unbiased advice based on practical experience. If you know more than I do then please make videos sharing your financial wisdom with everyone.
@@scooby1961 that does not address your brief calculation. Unless you covered ALL of your expenses with rental income from the start and over the lifetime of ownership. You also need to find an affordable location that has long term economic and cultural strengths.
It's great to see Scooby
Thanks for the video Scooby. Love your videos. Would you ever recommend paying the mortgage off early? Or is this a poor mathematical choice on rate of return considering inflation.
Thank you again for valuable food for thought. Auf Wiedersehen
My pleasure!
...I know nothing about trading/ Investing and I'm keen on getting started. What are some strategies to get started with?
Google "Mister Mustache Money". Best strategy: SAVE SAVE SAVE.
If scooby is advocating saving, he should also tell you to SAVE in a High Yield saving, as beginners will choose a measly 0.5% savings account. Find a savings account that offers the highest yield, and put your money into that
Your income is one of your biggest wealth building tools. If you don't save you have nothing to invest in. A 100% return in 7 years is very good bud on only 10 dollars saved is still only 10 dollars.😂
The issue is that the house price increased massively relative to wages. That alone is detstroying the middle class throughout the USA, UK, much of Europe, NZ and Australia. Housing as a capital gains "investment" is basically unethical.
The way to prevent this is simple, do give ANY tax benefits for real estate.
Hi Scooby. Have you read the Black Swan by Nassim Nicholas Taleb? I think youd enjoy it, if you havent read it already
Outsource repairs folks, use depreciation on rental properties. I own over 30 properties still in my 30s and barely talk to tenants. Any plumbing issues? Call the plumber and claim it on taxes
Best of luck
30 properties in your 30s? Your income must have been crazy high
Scooby should i make an LLC to buy houses?
yes
Always love to hearing your investment thoughts and journies Scooby. Hope all is well!!!
He doesn't even add money to his initial 12.5k in the stock market, while he constantly adds money to his mortgage in scenario number 2! The example scenarios are extremely misleading!
Well I Don't Wanna Wait Years For Returns, Got No Time To Invest, I Need A Boat Load Of Stinkin' Rich Cash And I Want It NOW... YE HEAR ME FREAK !!!
Lol!! :)
If more people would just invest in SOMETHING they would be far better off.
Right! Or simply SAVING and leaving in a savings account
I like when you talk about financial information because you back it up with your own personal gains. It's why I wouldn't ask an obese person about living a healthy lifestyle.
:)
Please use your own math and don't trust his financial information!!! He doesn't even add money to his initial 12.5k in the stock market, while he constantly adds money to his mortgage in scenario number 2! The example scenarios are extremely misleading!
I personally prefer stocks, but even then it makes financial sense to own your primary residence if its a good area and you want to be there long term. I just use some leverage when investing like Leaps. That landlord life is absolutely not for me.
I like scooby but his first sentence of this video is essentially a baby boomer meme statement lol
Ignore my advice then.
Scooby, I think you are missing an important variable in your calculation. You did not take into consideration interest payments and payback of the mortgage. If you had invested the mortgage rate regularly into an ETF, the returns on your stock portfolio would look very differently. You should compare the results of investing the 125.000,- (cost averaged over several years) into an ETF, that you paid back for your mortgage and not just the down payment.
Sure, if you lived in that condo, that was an additional benefit. But if you just look at a piece of real estate purely as an investment, an ETF would have been more profitable, I guess.
Do all the spreadsheets you want, I can tell you what this rental property did for me. After 10 years it started generating profit after all expenses including prop tax, mtg, water, maint, etc were taken into account. After 20 years, the income generated was enough for me to retire on again, fter all expenses including prop tax, mtg, water, maint, etc were taken into account. When the mortgage was paid off, it was generating $6000/mo with my only expeses being HOA, taxes, and insurance. Remember this was a 119k mortgage we were talking about.
@@scooby1961 Don't get me wrong ... buying your own house/apartment is the smartest thing you can do. Mostly because you save the rent and if you have to pay back a mortgage you cannot waste the money for silly consumer goods. I did the same thing and never regretted it. After having paid back the mortgage, my costs of living have gone down significantly, giving me freedom and peace of mind.
BUT: I did a comparison between investing into a house back in 1981 with your numbers and compared it with an investment of the same sum into a Dow Jones ETF... the ETF would have been even more profitable. Happy to share the calculation if you are interested.
Being smart in hindsight is always easy. Would I have panicked in 1987 or 2008 and sold everything, only to regret it afterwards? Probably. It is much more difficult to do stupid things with real estate than with stocks. Especially for less experienced investors.
If I was young again, I would work my ass off to buy my own house/apartment and after that I would put every dime I want to save into ETFs and never even bother to check market charts until I retire.
B I T C O I N outperforms them all.
Gambling works sometimes
@@scooby1961 It's not gambling when you understand it.
@@JMAGvids Gambling is always gambling no matter how much you try to spin it around. And the house always wins in the end! Try another metaphor, please! :)
@@beefchampion2792 No I'm good :) Keep working your low wage job and see how you end up.
It depends on your definition of gambling. It is just a tradeoff between risk and profit.
Homes are over 1.2million dollars in toronto and is looking more and more increasingly unaffordable. How to even invest there when i cant even afford to live?
dont buy in the most expensive city in your country
Invest with other people through funds or partnerhips. It is like saying a Bitcoin is too expensive to purchase (different from being potentially overvalued).
Been watching you since I was a teenager (with big gaps) and took on A LOT of what you were “preaching”. Now at 36 years old I am as healthy as I can be with about 2-3 years of mortgage left on my house. You are a standup guy, true engineer and very dear to my heart - hope you, your partner and your pets (if you still keep any) stay happy and healthy ❤ Thank you for sharing your great advice with the rest of the world - you have a massive positive impact on many many people 🫶💪
Thank you!
ask yourself this question: If it's such a great investment, why are banks lending you that money instead of buying condos?
1- banks won’t make the same profit as a person doing the work themselves as scooby explained.
2- probably because of government involvement to keep the “american dream” alive.
Wow, you got me there! Clearly I was an idiot. Guess the 1.5M I got was imaginary.
@@scooby1961 You never calculated how much money you paid for that house, so that 1.5M was definitely not pure profit! You had to pay for a mortgage, taxes, furniture, appliances, repairs and who knows what else for 30 years in order to sell it now. Please do a better video with realistic numbers, Scooby! I know you are a very intelligent person and you can do much better!
Banks are not in property investment business. They are in mortage business. They want you to take the risk.
Of course the amount you can put in the housing market is limited to the amount of money you can lend. If you already have maxed out your borrowing ability the 12 500 $ would of course have to go into stocks.
I think you meant its limited by the amount you can borrow, not lend. Thats true but there are ways to work around this as I mention in my "real esate progression" video
Was the costs of repair and upkeep over the years factored into the investment price? Not to be contrary, but I feel like these numbers wouldn't be accurate with newly built houses.
He doesn't even add money to his initial 12.5k in the stock market, while he constantly adds money to his mortgage in scenario number 2! The example scenarios are extremely misleading!
@@beefchampion2792 I wasn't reading cause he said 125K. So, yes, the text was off.
How much per week did you "work" on your rentals while being "retired"? If you average it out? I get it, sometimes you don't have anything especially with great tenants, sometimes you gotta work your butt off (renovations after notice)
My biggest break was 17 years and I did almost nothing that whole time
@@scooby1961 Killer :)
I put into the K Foundation fund, worked out.
To all the dumb people here complaining about interest, repairs etc, if you dont buy the house. you pay the same for the rental or even more than the monthly morgage payments. some one else gets rich from your monthly contribution
Thanks for chiming in. I am usually good at predicting what will confuse people but these weird notions left me dumbfounded. I mean, I guess the 1.5M I just got is imaginary.
@@scooby1961No one doubts your money. Congrats, enjoy them. But you purposefully twist the numbers to fit your narrative here. Also, you were extremely lucky with your apartment pick. If someone had your luck in picking stocks, they would have made much more money than you have. As you said - avg home appreciation was just about 5x in the last 40 years. Subtract compound inflation, repairs, taxes, effort etc and you have much lower yield. With long-term stock investment, you only deal with the inflation part.
Real estate is not passive income, so not really a.comparison, also regarding the S&P you ignored dividends as well.
Did you ever spend money on the market? Maybe through a retirement account?
Just do both
No, no, no....I want a get rich quick solution in 1 year!
Fly to a poor country, you feel rich very quick😮
Buy low, sell high. What the hell does THAT mean? Damned if I know.
A stock's price goes up and down, if you buy a stock when the price is low (say 10 dollars) and sell when the price is high (say 100 dollars), you now have 90 dollars from the initial investment of 10. People try to "time" the market, meaning buying at a certain price hoping it will go up. That's very hard to do.
It’ll be epic when you bequeath it all to your nephews and nieces on UA-cam!!
Aren't real estate values contingent on population growth? If the population stopped growing or began to decline, wouldn't property investment cease to be a good way to make money? Do property investors just say "hopefully that doesn't happen in my lifetime" and shrug it off?
Depends on the country you live in. Scooby is in the US where he has the unique benefit of mass immigration every single year for the last 300-400 years that ensures real estate values will keep on rising. That is not the case for many other countries that instead suffer a decline in population because of people actively immigrating away.
You tried to make a point that buying a property is a great investment and backed it by saying you just sold yours? 😄
I owned it 39 years. How long do you expect to hold it to prove it was a good investment? 125k to 1.5M isnt good enough for you??
Real estate used to be a good investment not anymore
🤯 I rather buy bitcoin
The stock market is a much better way to go than real estate. For now. It's not 1985 anymore. You are living in a fantasy land for the younger generation. You make no sense with your inflation scheme. Sorry, keep to bodybuilding and nutrition.
Glad you have it all figured out but I dont underatand why you wasted time watching my video if your investment strategy has been more successful than mine - I retired at age 40.
Glad you have it all figured out but I dont underatand why you wasted time watching my video if your investment strategy has been more successful than mine - I retired at age 40.
A B C who finished 3rd grade school at least. So, No Messiah Here, just get calculator and use it.
Ok boomer.
Ok entitled millenial
scoob do health and fitness I doubt 99% of the folks watching want to watch a vid about finance.
I dont care what they want, I do the videos people need and they will say “thank you, sir”
you realize that he is an engineer , right ?
I love your videos on finance topics. Give me more so I can plan my retirement as well as you did@scooby1961
@@scooby1961 Thank you, sir.
Thank you sir scoob!
Scooby, I used to watch you as a teen in the 2010s. You were a massive inspiration in putting me into fitness which I’ve followed into my adult years and stuck to. Thanks a lot!
you are very welcome!
Your RV is still amazing everytime I see it!
Thanks, It really is!
Not only is real owning investment estate basically a second job, but people also seem to make it sound like it is risk free. You are hundreds of thousands in debt, that will weigh on you. Not to mention that renters can miss payments, or maybe don't pay you at all, you will be the one on the receiving end, the loan is on your name.
I lost over $70k when everything started to tank. Not because I was in an exchange that went belly up. I was just stupid to hold and because that's what everyone said. I'm still responsible. It just taught me to be a better investor now that I understand more of what could go wrong. It took me over two years of being in the market, I'm really grateful I found one source to recover my money, at least $10k profits weekly.Thanks Patricia Annie Brooks
Wow. I'm a bit perplexed seeing her been mentioned here also Didn’t know she has been good to so many people too this is wonderful, i'm in my fifth trade with her and it has been super.
She is my family's personal broker and also a personal broker in many families I'm United States, she's a licensed broker and a FINRA AGENT in United states
I'm new at this, please how can I reach her?
I just withdrew my profits a week ago, To be honest it was an amazing feeling when the profits hits my wallet I wish I could reinvest but, too much bills
she's mostly on Instagrams, using the user name
The overview is good. I will temper it with personal experience, do not assume you will be graced with tenants that are as upstanding and respectful of property as you are. The worst part is the bad ones are not always easy to see. I’ve had high level Microsoft employees be shocking tenants, and unemployed people on benefits be the best tenants you can possibly wish for.
You can make great money in real estate, but it is absolutely not passive. Even letting agents are a mine field.
I would start slowly and let your portfolio grow as your experience grows. Hope for the best but ALWAYS plan for the worst. Can you afford to cover all property costs mortgage/insurance etc for 6-12 months while you fight to evict a non paying tenant? After that do you have enough money to repairs the property if it gets trashed?
Being a landlord will massively open your eyes to how some people live and conduct themselves as they travel through life.
On the flipside stocks you can just buy and place in your portfolio.
Real estate and stocks are definitely good parts of a balanced portfolio, but they aren’t equivalent investment propositions.
With that being same I have a great respect for Scooby and all that he does. I hope everyone’s future investments exceed their expectations ❤🙌
Best advice, stay at home until married, save every penny, hav a good deposit for a house then pay that down as soon as you can then start investing in a low cost etf such as the s&p 500 or a all world etf.
A few months ago you made a video talking about how expensive it is to keep a house, you said after the previous tenants moved out, you'd put about 60,000 dollars into renovations. I don't know, if I bought a house, I'd probably just live in it rather than renting it out or re-selling it.
Yes, that is the house I sold. I put in 60k and then got top dollar when I sold it.
I rent a house in Key West for a couple of months a year. The lady who owns it owns a total of 8 properties and was telling me that it was a ton of work keeping up with everything. I am happy with my house- paid off for 20 years now.
2:50 I really don't like how you're assuming you own a house with 10% down payment.
It's not fair to exclude subsequent payments.
If you had only paid $12,500 for your $125,000 house in 1985, you'd be homeless because you made 0 mortgage payments. Your 1985 investment is now worth $0.
I agree. He's comparing renting your own home to buying your own home. He's assuming your mortgage payments, taxes, insurance and maintenance costs are equal to what you would pay as a renter. So as soon as you move into your property, you stop paying rent. Furthermore he's talking about leverage. He's saying the reason he got a higher return was BECAUSE he had a mortgage.
Also consider the constantly growing property tax, maintenance, and insurance… Also its less liquid so it makes timing the market and getting what you may think its worse rather difficult… Also stocks you get get more easily in tax advantaged ira or roth iras…
Scooby you always have sensible advice instead of these get rich quick charlatans on UA-cam. I love that you're a natty and although I'm nowhere near as muscular as you are I too am on such a journey.
I appreciate that!
You do not take into account your monthly mortgage
Yes, I did
When I said, “its tight for a few years until inflation increases rents and improves cashflow” the mortgage is what makes it tight
Nice going scoobs. unfortunately for me i have orthophobia
I had to google that
Fear of property
@@scooby1961 Seriously, do people just make up conditions. How can this be real? Fear of birds, yes, but fear of property? Come on.
@@FelixTheCat69 I had never heard of orthophobia before this moment, but I have always been anxious about owning anything. I don't have a couch, a dinner table, dishwasher, etc...I don't have anything that I don't absolutely need to live besides a home gym. It's not an impediment to my day to day life, so I'm not whining. I'm just saying, people's experiences and genetics vastly vary. I think I know what caused it in my childhood, but it's beyond the point.
@@ddwfw it has nothing to do with genetics as you said it came from a childhood experience. You are on your way to living alone for the rest of your life if you don’t do some exposure therapy. Any partner you get will want to have nice things. Start slowly and acquire nice things. Set a goal. One per year. You may want to start with a couch. Seriously, it sounds like you could go either way if you don’t intervene. I wish you the best.
Your lucky that in the USA you have the 1031 exchange, we don't have that in Canada.
Its one of the many reasons our real estate is so unaffordable
You entirely leave out the cost of the loan that you got from the bank to buy that house! You're sverely distorting the facts here! The bank will want its money back one way or the other! And for this to be a fair comparison you have to put in that same interest paying money into the stock market for first strategy to be comparable to the second one! Purely comparing the 12,5k dollars on one side and hundreds of thousands of dollars on the other side of your own money is a very very bad comparison! Please redo this video with more realistic math, Scooby!
I hate to say this, but this is a hard thumbs down from me, because of the poor analysis!
Also how does inflation increase your profits in terms of rent that you receive, but your costs stay the same? In what world is it possible that inflation works so selectively to benefit you?
Best regards!
Please watch the video again.
I agree with him. This video is misleading, you compare uncomparable things on purpose.
Do you ever feel like there is something wrong or unsustainable about this commoditized housing system you took part in? It's great that you had a windfall and I can see that you are using previous performance to recommend future success but... I do not forsee the real estate as an investment continuing the way it played out from post-WW2 until now. I can understand if that is just not your problem, but this is advice for young people isn't it?
Of course! I preach about how it should be changed all the time.
Definitely wrong. But if there is a legal system - then use it to your advantage. What we do know that we will not get more land and that more people invest in real-estate and second homes. At the same time we are getting more people on the planet. So yes, it will continue, maybe not in the same pace but it will.
I had to go back to 1:22 mark of this video. You're talking about the S&P, but factoring in someone ONLY purchasing "one share" towards that 31x return. If a person purchased $16,700 worth of shares they would've made what you did on Real Estate. I'm Sorry but this video was biased, and I have to put the facts out.
Yeah
Please let me know when you retire at age 40 from your stock investments!
@@scooby1961 Some people actually do retire at 40 from stock investments. That doesn't help you any way shape or form in the case of your video here! It is not a good comparison!
The fun thing about real estate is you can negoiate the price with the owner and if you put in the work you can buy something below average market value. There is where the money is. Elbow grease can add a lot to. Stocks you can mostly do nothing and wait except for your voting rights. Interest rates are also a big part of your profitability. Let's just say its comllicated. You have to do your research of all the laws and rulez you have to follow and choosing the right location.
Depends on the market!
what are the other costs over time? like maintenance, closing costs, tax, insurance, moving? And opportunity cost of your time? i feel if you don't take these into account, the return is not accurate.
So I read a comment saying you were in your RV, I didn't believe it lol. (I guess I'm used to the idea of RVs from the 80s that were beige, and just expect a dated 80s interior)
I thought u were in a house.
I went and watched your RV video, and I get it's practically a house, you bring in a residential fridge, washer and drying. I'm surprized you have a full bath and a half bath in a RV.
anyways, what surprized me was in your description it said this 48000 pound vehicle gets the same mileage as a popular "250" pickup truck, "despite weighing 5x more. "
Why does a RV get the same mileage as a truck that it weighs 5x more?
and I think something you only touched on briefly during this video is if you didn't buy a place and paid monthly mortgage payments you would've had to pay rent somewhere.
So you have a cost of rent vs mortgage payments (or if you're not living there, one would hope you have tenants)
Large diesel engines are simply more effecient at converting fuel into motion. Part of it is that the massive cylinders have a much lower RPM. Lower rpm means lower friction and lower losses. The tires are much higher pressure too so there is much less rolling resistance per pound of cargo. Passenger vehicle tires are optimized for comfort and traction, RV tires are optimized for effeciency.
@@scooby1961 thanks for the explanation Scooby
I never would've expected that. People a lot of the time in efficiency conversations also talk about aerodynamics, and I was thinking even there the popular "250" pickup truck must be a more aerodynamic shape than a RV (I think)
you talk about passenger vehicles being more optimized for comfort. How do you find driving the RV (or as a passenger)
You are totally ignoring interest rate and down payments? This is flawed as hell. If you invested your monthly down payment into the s&p500, it would be a no contest...
My "flawed logic" still let me retire at age 40 with the rental propety paying all my bills.
He also completely ignores the investment in scenario 1 for 40 years without any further investment! That makes comparing the two investment scenarios like trying to compare apples and elephants....
@@scooby1961 You being financially well of doesn't make this video any good! The two investment scenarios are entirely different and thus paint a misleading picture!
@@scooby1961 Like that has anything to do with my point? Winning the lottery lets you retire right away..
Just my my first two rentals last year. Let's go!
Congrats!
Like asked before, can you do a real estate video on topic of location and how it determines how much of the price? Specifically if its in a high crime/homeless neighborhood, it will logically lower the price significantly. And outliners like Skid Row with high homeless and still high prices in high rise apartments?
Realestate to create cash flow, depreciate assest, 1031 exchange, step up potential. The real trick is to save 36% of the income generated after tax. This will save the annual cashflow every 3 years.
can you do my taxes for me im newly 20 yeard ols and i ahve not done my taxes since i was 16 yeard old. im in toruble wiht the IRS.
Come on Scoob, you have to at least take interest into account. I've got a mortgage and still have a significant chunk to pay purely on interest. Interest rates are relatively high in the US right now.
Furthermore, you mention dollar-cost averaging but then neglect to mention that you're likely to dollar-cost average in that 39-year period you refer to, rather than stick with that initial lump sum.
That's one of the advantages of investing in the stock market vs real estate - it's a much more liquid investment. Dollar-cost averaging even a small monthly amount would lead to a much greater rate of return than what you've shared there.
Just my two cents!
Yes, I am neglecting a lot of things that I consider to be minor. I just sold my condo which rents for $5000/mo whose loan had been paid off for 1.5M - that is the big picture. I didnt include my taxes on that house were $175/mo, the insurance which was $125/mo, or the HOA fees which were $300/mo. Do your spreadsheet and decide what is best for YOU. There is literally no way to fully model a rental property like this so you do the best you can. Properly taking income tax savings into account is very, very complicated because the tax law is complicated.
@@scooby1961 Dollar-cost averaging for 40 years is not a minor detail! You've left that entirely out of the calculation in the video!
@@scooby1961 Thanks for replying. I’ve actually been struggling with this decision with my partner recently and trying to weigh up the pros and cons. I never considered the aspect of leverage in real estate, it’s an excellent point.
However, I still feel that the stock market has certain advantages over real estate, like how quickly you can access your investment in case of an emergency. Still - real estate is almost never a bad move and it paid off for you!
@@beefchampion2792He just made a mil and got excited. Seems like he just wants to brag, not to lecture.
Golden nuggets😀😀😀
scoob for this video you can wear shirt :D
Now add bitcoin to the video lol
Is that your mobile home?
Scooby, firstly your financial sense is great and I truly believe this is the best honest advice I've heard about realistically having financial success longterm. I kind of wish I could do something similar in my case but I am not sure how. My big dream for a long time has simply been that I wanted to buy land and build my dream house and just save for buying land and for getting a loan.
Thats a great plan! While you are building you could live in an old RV