Buying Stocks vs Real Estate Investing -- Which is Better?
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- Опубліковано 15 чер 2024
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We all know that putting some of our assets in real estate is good for diversification, but what about returns? Which asset class has produced better returns over long periods of time -- real estate or stocks?
0:18 - Real estate vs stocks
2:51 - Mistakes from the 2008 financial crisis
3:36 - How financial leverage impacts real estate investing returns
5:06 - The tax benefits of buying a house
5:29 - REIT investing and its tax advantages
7:14 - Real estate investing risks
First, it’s important to note that stocks tend to increase in value quicker than real estate.
Over long periods of time, an S&P 500 index fund has historically produced total returns in the 9-10% range. Meanwhile, real estate prices tend to outpace inflation, but not by much.
Since 1940, the median home value in the United States has increased at an annualized rate of 5.5%. However, this is misleading for several reasons.
Consider this, homes are significantly larger today, on average, than they were back then. The average home in 1940 was 1,246 square feet, roughly half of the 2,430 average of 2010. So if you adjust for home size, the annualized increase on a per-square-foot basis drops to 4.6%. And after accounting for inflation, the average home value has risen by just 1.5% per year.
Now let's compare this to stock returns.
Stocks have generated roughly 7% per year over the long run after accounting for inflation. In other words, the stock market has generated returns at more than four times the rate of real estate appreciation. If you’ve ever heard someone tell you that “your home isn’t an investment,” this is probably why.
Real estate as an investment has much stronger return potential
Real estate values tend to barely outpace inflation. However, there are a few reasons why real estate investments tend to do better.
Unlike stocks, where it’s irresponsible to invest with borrowed money, you can use significant amounts of financing for real estate investments without adding a ton of risk.
If you use debt responsibly, it's a healthy part of a real estate investing strategy. Just don't forget about the core metric of any property -- it’s ability to generate cash flow -- when you’re thinking about real estate investments.
The second reason why investment real estate can produce strong returns is that investment properties can be rented out to generate income. You can also rent out a part of a house and live in the rest, a move called house hacking.
Real estate investors enjoy tax advantages that stock investors don’t. For example, when you buy an investment property, you get to write off the purchase price over a certain number of years -- a tax deduction known as depreciation. It would be awesome if you could write off your stock investments in a similar manner, but that isn’t the case.
Even if you don’t own a property, real estate can offer tax advantages that the average equity investment can’t. Real estate investment trusts or REITs, get an extra tax benefit in that they avoid corporate taxes by paying out most of their income as dividends.
These are easy for investors to buy in an IRA or other tax-advantaged retirement account, meaning they can avoid dividend and capital gains taxes altogether in the short-term.
Together, the combination of rental income, leverage, and tax benefits can combine to produce attractive long-term gains.
So how has investment real estate compared with stocks over time?
Let's compare the total returns of the S&P 500 stock index and the Vanguard Real Estate mutual fund, a good benchmark index of equity REITs. The difference isn't too significant over the first few years but by 20 years out, the Vanguard ETF crushed the S&P 500.
If you look at the longest time period, you’ll notice that the performance is comparable but with a significant edge to real estate. This is an imperfect conclusion, as there are other ways to invest in real estate besides REITs and they have different investment dynamics. But it does illustrate the long-term return potential of real estate investments.
Now there are some downsides to real estate investing…
Actually buying real estate is a time-consuming investment.
Also, real estate is an illiquid investment. You can sell stocks with a couple clicks in no time at all. Conversely, it can take months to sell an investment property unless you want to accept a highly discounted price.
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I think it's time to make it more appealing for potential buyers. Real estate can be quite the rollercoaster! the stress and uncertainty are getting to me. I think I'll cut rents to attract potential buyers and exit the market, but i'm at crossroads if to allocate the entire $680k liquidity value to my stock portfolio?
"Overall, buyers hold a lot of the cards right now, and sellers are having to give out more concessions to close a deal." All the best, buying on sale is actually one of the best ways to invest in stocks, and advisors are ideally suited for such task
Until the Fed clamps down even further I think we're going to see hysteria due to rampant inflation. If you are in cross roads or need sincere advise on the best moves to take now with financial markets will be best you seek a fin-professional with fiduciary responsibilities who knows about mortgage-backed securities for proper guidance.
this sounds considerable! think you know any advisors i can get on the phone with? i'm in dire need of proper portfolio allocation
I've shuffled through a few advisors in the past, but settled with ’Natalie Lynn Fisk her service is exemplary and she's a genius in portfolio diversification. I'd suggest you research her further on your browser, sure you'll find her basic info.
Appreciate this recommendation, hopefully I can get some insight to where the economy is headed and strategies to beat inflation with when I hear back from Natalie.
I started stacking to SAVE wealth. I've always been the type of person to spend my entire paycheck. I hate having money just sit in the bank. I am under pressure to grow my reserve of $950k. before I turn 60, I would appreciate any advice on potential investments.
I can feel your pains. New guys need to realize the risks that come with all of this. You could lose it all and you could win it all. It goes both ways. Second, what works for A may not necessarily work for B and you should not be a bandwagon investor. A good number of folks are raking in huge 6 figure gains in this downtrend, but such strategies are mostly successfully executed by folks with in depth market knowledge.
@@sherryie2 Factos!! Since the market became extremely volatile and pressure increased (I should be retiring in 17 months), I took the decision to work closely with a financial advisor. It has already been 9 months and counting, and I have made approximately 600K net from all of my holdings.
@@corrySledd That's impressive, my portfolio have been tanking all year, tried learning new strategies to gain in the current market but all of that flew right over head, please would you mind recommending the Adviser you're using.
@@AUstinnesc My advisor is the quite famous NICOLE DESIREE SIMON She has been making a fortune online worth millions of dollars in digital assets for a select few for years. Lately, these types of services have appeared that allow you to copy the results of the experts. She demonstrates how to copy it automatically using that system.
@@corrySledd Thanks for the info, i found her website and sent a message hopefully she replies soon.
OMG - I thought I was gong to get a sales pitch on why I should buy stock from them. Instead a well thought out explanation of the benefits of owning both. Good stuff - thanks
You got it dude. Stay tuned, we've got more awesome stuff coming on the channel.
Trading as a beginner was very difficult due to lack on trading experience, this resulted in losing my funds though I've been able to recover all that I lost, all thanks to Mr Charles_forex09 on Instagram , i never knew good trader still existed till I come in touch with him___
@@dorcasbill5966 well I read the comments before yours and still couldn't see who asked 🤷♂️
Great video though I think you were more biased towards Real Estates! Personally, I think stocks are "better". Major con however is that it needs your time, which is easily countered by working with/through an expert. Made my first million earlier this year through one. Have dabbled into Real Estates more than a few times, won't say I've been so lucky.
Another advantage is that you need relatively lesser capital to go into stocks than real estate.
Lastly, can you do the job of a Landlord? Can stocks call you by 12am about a broken pipe?
This is quite funny but true. Went into real estates sometime last year. Wasn't quite as profitable as I had expected. You mentioned something about an expert. Who's he? Sounds quite amazing?
@@trishawallor A "she" actually "Nancy Lynn Lewis", she was in the news when she revived Grumac sometime in 2018. You can check her out online for more.
@@emersonstagnitta65 Wow I know this little lady. Once attended a seminar she was also in attendance here in Texas,, Great speaker. I still think Real Estates is a safer bet
@@winstonwawrzyniak3925 This right here is the second time I am coming across this name in a week. Came across her podcast and it was lit!
SPAM
The recent housing crash is so bad that I read about someone who had to rent half of her bed with someone just to afford rent. foresaw the housing crisis and sold my property. I then put it in the market. That was late February. I've lost more than 40% of my portfolio's value. It makes me really sad. How can I turn this situation around?
This is really sad. If you're not who understands strategies to invest in the market, why not seek a financial advisor to help you grow your portfolio?
I agree. Having an investment advisor is the best way to go about the stock market right now. I’ve been in touch with a coach for a while now mostly and I made over 95% profit within about seven months or so.
That's impressive! I could really use the expertise of your advisor. Could you recommend who you work with, please?
The advisor I'm in touch with is Sharon Louise Count. There are other good FAs online too, if you look around. You could check her out and contact her.
Thank you for this. I'm gonna check her out and try to reach her. I hope she gets back to me before my portfolio is completely gone.
i love Real estate but i hate having to manage it and worrying about vacancy
Just buy both and diversify your Portfolio..
After an intensive research perusing balance sheets, cash-flows and market capitalizations....And of-course the future prospect of your investment.
I use stock profits to buy properties = convert my digital gains into tangible assets that provide stable reliable passive income on a permanent basis so long as I own them and use that income to further invest in stocks to continue the cycle.
It’s Stocks and REITs all the way for me.
The best financial decision we made was buying a multi unit as our first home. Your ability to save, grow a business, etc is enhanced when your housing is paid for by your neighbors (neighbors you get to pick as a bonus).
Andrew Jones I wish I would’ve done that. House hacking is such a great strategy to build long term wealth. Cheers.
Planning on doing that as well this year! Seeking to get a triplex. Live in one unit, rent out the other Long-term, and rent out the 3rd unit studio through air bnb.
I tried that sadly it didn't work out for me, but the mistakes were mine and very costly.
@@jpherrera2622 just two. I wanted a 4 Plex in the hood, the wife wanted a single family home and we compromised.
I do the same thing! Me and my wife own a 3-level townhouse in the suburbs of northern VA, with a $1450 cost for the mortgage/HOA/taxes/insurance. We rent out the basement for $850, so we get the top 2 floors to ourselves for just $600 a month + utilities. Great value
Well said! So much great information, thank you
Even if you lived in a house that you bought as your primary residence, it saves you the market rental value of that house AND you don't get taxed on money saved.
So good information! Thanks!
Awesome explanation thanks!
Thanks so so much for information and research!!!!
A rental in a good area is a money maker ,up keep of the property ,taxes ,insurance ,keeping good tenants .Stocks should always be be part of the pie
Short answer: Yes. Diversify.
The table in 6:30 is missed up. S&P 500 is the one performed 619.7% from 500ish points in 1996 to 3000ish. The inception date of May 13, 1996 is referred to VGSIX which was 10 back in 1996 now is 30 (213.1%)
I've gone through many vids...this is one of the best by far. You given facts not bias and you left to decide. Excellent!
Totally correct about real estate being highly localized, in my area property taxes are tax deductible were 2.5% put a big drag on cash flow and gains like stocks are subject to capital gains plus depreciation I enjoyed was recaptured in summary in my area property taxes made real estate investments difficult
super helpful video. diversification is definitely the secret sauce on average. too many anecdotal n=1 success stories from both stock pickers and real estate investors...but like most things, the answer is likely somewhere in the middle.
Great Job!!! Thanks for the very clear explanation.
Thanks, nice vid. I have a question - if you have cash and don't need a mortgage, does that have any impact on which will be the better investment?
Hi Philip, It's probably best to still take on a "Buy to let" mortgage that way you can purchase multiple properties with the same lump sum of cash. Check out my comparision here ua-cam.com/video/7uF0Co1xxmo/v-deo.html
Nice Comparison. Keep good going
Compounding stocks and ETFs for over 2 years before I could hit six figures in the market, Investing is interesting especially when the ROi is high. I do better at stocks
The market i must say is a goldmine with very few miners. so it's best to exploit
In such terms, A miner without the right tools will be stuck my trading service helped a lot as i was a newbie when i got in. Alexander Payden service with such outstanding expertise and good results that's how i made it through
I want to go into stocks because of the lower tax and lesser work, which way do i get in.
How many transitions does a video need? I can’t handle how many graph lines are in this video.
really? I did not know attention deficit disorder was this popular.
Real estate involves some legal certifications and also so much money, Buying stocks is most preferable to me as an investment starter it helped me make so much money. In stock a $15,000 can go a long way but in real estate $15,000 is nothing but a mere joke
Earning from stocks can be done from home but as for Real estate a lot of money have to go in, and you have to know some other realtors
I got into the stock market some time ago and i must say it's really profitable
I will advice everyone to try out the stock market
But we all know not everyone knows how to trade stocks
Been really trynna get into this stock market thing but I just don’t understand the market
When comparing these two forms of investing, if considering the rental income aspect of real estate, did your stock return evaluation include the dividend component in its calculation?
When they talk about s&p return over years, that includes Dividend reinvestment usually.
@@sdbw1990 Who says?
@@jimross2101 I'm just saying that is typical. Otherwise when they talk about return they are missing about 2-3% of the total. I can't say what they actually are talking about in this code
Stock dividends cannot be compared to real estate cash flow. Dividends are a complete joke. Tell me why I need over $1 million invested in a stock like JNJ or KO to make $30K a year when I have a 360K property cashflowing the same amount with only around 80K out of pocket?
Own BOTH! #Diversification 📊
Exactly my thoughts! Check out my review here: ua-cam.com/video/7uF0Co1xxmo/v-deo.html
I compared vanguard real state etf with s&p500, my results was different. The plot shows s&p was much more
profitable. I used yahoo for the data, and VNQ, VGSLX, and VGSIX for mutual fund. Any ideas? And yes.... I do believe in investing in real state and stock market
Very informative. It's like Army & Air force. You need both. I too have both.😎
consider reinvesting or inflation
What about leverage or rental income?
I agree. The data they use seems wrong. I own both vnq and voo and when you plot them together. Voo outpace vnq by huge margins long term.
A real estate etf doesn't give you leverage, doesn't give you property ownership, and doesn't give you rental cash flow... nor tax breaks/write offs... and you can't leverage your equity to purchase additional properties
Hello editor, is this your first time using your editing software?
Very informative video. I like how you compared both.
Another thing positive thing about real estate is debt pay down for rentals. Your tenants are paying off your loan while you gain the net worth from it.
Debt pay down combined with leveraging debt several times over with the BRRR method of real estate investing means exponential growth to your net worth. With, for example, 70k up front you could buy a house, fix it up, rent it out and refinance to purchase your next property. The cool part is that it doesn’t have to be your 70k and could come from a friend, family member or whoever.
Jackson I completely agree this chick has no comprehension of real real estate deals!
@@jacklan4103 Name one person who doesn't need a home to live in... I'll wait...
Excellent video. Our clients prefer real estate despite the fact that it is not as liquid as stocks and you need significantly more funds to get started. However, some properties are like regenerative income producing assets with the added bonus of capital appreciation. All the investor needs to do is choose wisely.
I’m 30 years old, and me and my wife own three rentals. I feel like they’re the best investment for people who are “upper middle class”. We make about 200,000 a year income. Once we have 6 rentals, then I’ll start putting any extra money into dividend stocks
Basically, yes, the rentals are a lot of work, but they’re also worth every penny
@@charlesg7926 every billionaire has money in the stock market, its not suited for a certain class.
Stocks for me. Liquid, better returns and less taxes.
Arent there actually more tax benefits with real estate? Can't you write off depreciation as well as loan interest? Other than that, both options still have to account for capital gains tax i believe.
It’s so not true
@@bubblebuddy8815 I buy and hold, so no capital gains tax. I usually dont buy dividend stocks so no tax on that. So in effect the taxes I pay on stocks r minimal if any.
@@Crybabehot that's been my experience
@@InvestingEducation I gotcha. Makes sense. I forgot property taxes must be paid each year even if you buy and hold with real estate. Happy investing!
Probably one of the best video on comparison on this.
The orange, purple, and green value-line transitions are REALLY annoying. Just transition to the next slide or graphic without these PLEASE.
From the 5:40 mark to the end, I counted 18 of these flash transitions bridging the transition to the ACTUAL information; the video even ends on one!
Yeah, this is super annoying. Maybe to keep millenials' attention. Good content, well delivered, otherwise.
ETFs might be the answer:
QQQ: 20% per year return last 10 years
SPY: 10+% per year last 10 years
As a starting invester, stocks are easier to get in to. Real estate is like a marriage that you really have to know, understand, and commit to.
But to answer the question, having BOTH is the best option
Stocks for sure. Because it is fun.
I think its kinda like saying "do you like cherry pie or apple pie"? They are both good, with their own pros and cons, and both are better than none :) That being said, I've done residential and commercial real estate, and I've done stocks... and for me personally, I way prefer investing in quality dividend stocks.. Though if I were going to do more real estate, then I'd prefer to do NNN Commercial (over residential) due to its better passivity.
GenExDividendInvestor
I dont like cherry pie at all...
Guys! You have to buy and use both stocks and real estates! You can buy stocks with as little as 1$! If you buy real estate you need as much as 10%/20% of the purchase price. The benefits of stocks are you can withdrawn money from your Stockporfolio without applying a mortgage. You can use this for more real estate of to pay for repairs. You can use the monthly rent for paying of your mortgage or for investing in your stock portfolio. 📈📈📈
Return on cash is much higher in private real estate, but it’s also more work and a different set of risks.
Thank you for the video! The only reason why I choose stock investment over real estate investment is you can do everything with stock over the internet. When it comes to real estate you have to be on the spot.
That’s not entirely true in my experience. I have 3 properties across the country from where I live (will be adding more in the future). I found a property manager online (vetted with yelp and biggerpockets.com) and communicate with them via email. I did travel out there when I was nearing closing, but it wasn’t necessary. You can manage real estate successfully from anywhere in the world. Many investors do it.
With investing in an individual property you can add value using your time though your far less diversified.
If you have the time and know how to add a lot of value in exchange for your time it might be a good investment if not it might be a bad one.
Location is everything but you can hire a management company
What if you lose that person o r company?
please explain how reits crush the sp500 as i just deleted stocks from my roth, replacing them with reits based on this philosophy
S&P 500 crushes property.
@@patbateman2088 Have fun waiting until you're 65 to see your returns LOL do you find it odd how "S&P 500 crushes property" yet real estate has produced more millionaires than any other asset class
There's no better or worse. Comparing apples to oranges. Or just invest in an REIT.
REITS are a great option Robert, I just like being able to add value to a property! Check out my Stocks vs Property investing here: ua-cam.com/video/7uF0Co1xxmo/v-deo.html
The problem with real estate is that the market is quite efficient.
You're not going to know much more than the residence around there.
Hence the lower opportunity for arbitrage.
Not to mention the high upfront cost too.
I use real estate to fund my stock investments! Leverage and liquidity is the key here.
extremely smart
Same here. Part of my monthly cashflow from my self-managed rentals automatically gets deposited into my quest trade account each month and my dividend accounts in quest trade all have drips setup to automatically add more stock with those dividends. I don't care to receive those dividends right now. I just focus on my active business which is what buys more cashflow real estate, which then buys more stock.
It's strange you are using the Vanguard Real Estate ETF as a benchmark comparison to how well real estate is doing. The Vanguard ETF contains mainly commercial property, storage facilities, hospitals, ect that has very little to do with the house I'm about to buy down the street. Commercial properties tend to command higher rent, are generally located in hot busy areas with high traffic. Based on your argument, a person is better off just buying a REIT ETF, which is actually still consider an ETF stock purchase.
Both
Okay I get it. Do both! ... but which one first?
Most newbies fail simply because they don't understand how the market works in general or in particular how the market relates to stock/forex or currency pair they entering. If a retail trades doesn't grasp what the market makers are doing and when they are doing it, the greatest strategy in the world will fall. For new traders the markets are like entering an F1 race before you've passed your drivers license test. One more advantage is the possibility to benefit from repetition. Without this type of strategy, you probably won't know what worked or why it worked and even if you did, it would be hard to repeat therefore for you need a perfect mentor to teach you perfectly to enable you invest and trade accurately on your own, which i highly recommend you Mr Hercules He guides me with the exact time frame to trade and now I just received my first withdrawals of $30k in my bank account today I'm very happy, my advice is for you to contact him he will guide you perfectly well, and thank me later, I guess this is a good way to show my heartfelt appreciation for literally breaking the chain of my financial debit when I needed it most, you can contact him on his email 📧
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Everybody is different, of course, I will tell my story.
I was born and raised in California. I made the decision not to leave California until my parents died.
My mom died a little over a year ago. My current situation is that we are paying a large land lease on a cheap mobile home that my wife had purchased 7 years ago with her inheritance money.
When my mom died I inherited a good amount of stock. I was almost at full retirement age, and decided to retire. I took a little over 1/2 of the stock, purchased a home in Georgia in one of the nicest areas 40 miles from Atlanta. The home we purchased would have been 5x the price in an equivalent area in California. The point is that we do not have the huge land lease, and utlity prices, and can easily afford the home expenses in Georgia on Social Security. Yes, I could have stayed in California and paid all our expenses with the stock and SS amount, yet I prefer what we did. California is not what it was like when I was younger!!!
One thing they don't mention is real estate has risk from your tenants. Unless you pay someone else to manage the property
If you are into business, finance and real estate,check out this great podcast, which you can access here: anchor.fm/christopher-anastasio
Lets say you do not own any real estate but have $500,000 cash to get started. What course of action would you recommend? Would it make more sense to pay cash for 2-3 properties and not have a mortgage and generate (hopefully) around $5k/month of cash flow? Or would it be better to put 20-25% down and buy 8 properties? Is there a video, or something I can read that compares these approaches?
If you're happy with the 5k month buy the 3 houses and manage yourself
If you get good tenants (which you should if you're in a decent area) they don't need "managing" all that much
Want to expand and have growth, buy more by borrowing money but then you have more houses which = more responsibility and your time (unless you pay someone to manage) but remember a management firm never cards about the property like the owner does
Starting out most need to borrow money to get into property but you have the luxury of buying 3 outright and there is no better feeling than having property that you can say "they are MINE"
No worries about mortgages or interest rates
Also if you do decide to change your mind and you want to buy more 2-3 years down the line you just borrow against your existing properties
Hope this helps 👍🏻
The way I see it. Is if you have 500k and decided to buy X amount of properties that means that you have all your money tied up in those houses. Your ROI will be small. Let's just say 10%. That means it'll take you about 10 years to get your 500k back (50k is 10% of 500k) and reinvest that money. Now if you only put down say, 100k that means that you'll get your money back in 2 years thus being able to reinvest and make more. Yes you'll be in debt but tenants are paying your property slowly. Hope I explained myself correctly.
500K gets you roughly $2.5 million worth of real estate that would cash flow anywhere between $180-250K/yr
Stocks for long term retirement fund, Real Estate for passive income and cash flow
Real Estate for personal use, stocks for growth, maybe REITs for passive income and cash flow.
Lorenz Müller Completely agree
No real estate is better because you need a house to live in unless you wanna pay rent for 70 years or for life
Well Done !
You missed the MOST important tax advantage: 1031 exchange. This is how RE beats stock in a very long run. You paid no taxes from rental income thanks to depreciation and no tax from selling thanks to 1031. May be you are not mentioning it for some reason?
You, or your heirs, will likely pay stiff capital gains and recapture taxes when the property/properties are eventually sold. Taxes will merely be deferred until then.
link to free pdf?
You can get into real estate with zero money down if you find a motivated seller. Take over their payments on their current mortgage or owner finance. Get a tenant in quick and you’re making money.
I need to learn this option because I have good credit, no proof of high income to get a loan, but have cash to Inves for down payment.
Leasing option agreement, look it up
Really good video!!!!!
I started investing in property in 1996 with 0 down. I can say if a person can’t comprehend all the profit centers in REI(rent, appreciation, amortization, tax breaks and reinvestment), they really shouldn’t invest in property. In fact, a better choice would be to invest in the stock market, pay taxes on the gain as they cash out and rent where they live.
His success stories are everywhere 😱
This is a very interesting topic. Unfortunately, it would be far more helpful if it's from someone's personal experience. A lot of people without the actual hand-on experience talk about it, but in reality they are far off. For example, when talking about the stock return, you can't simply look at a long-term SPX chart and say about 10% annualized gain, because not many people actually go for the not-effective buy-and-hold strategy. The real estate investment is a lot more complicated, it's almost impossible to understand it without the hand-on experience.
Hey there -- we focus on the the long-term gains because buy and hold is exactly what we tell people to do when they invest. Put the money aside and set it on a vacation for the next few years/decades. That's how you build long-term wealth.
A single family home is not a investment. It does not pay you . You pay to live their. The bank owns your house not you. Even if you pay off your house but don't pay your taxes you lose your house to the bank. How is that right.
Both are better
I don't understand the "leverage" benefit because if you put 100000 down on a 500000 property and it goes to 515000. The amount of commissions and paying for the transaction seems to eat away at that 15000 difference and then on top of that you are paying an interest rate on the mortgage to have the benefit of paying into an asset of 500000 dollars so that if you take out a 30 year loan and put 20 percent down you have to have saved up 100000 dollars to avoid PMI, interest on that 400000 loan, learning about landlord rules and regulations, and then your asset will have things that will need to be fixed. It seems like to the average person working 40 hours a week, real estate is too active, when you can put it into an etf and put it into a roth it accrues tax free and pays tax free seems like a no brainer for me? And I don't have to keep up with rules and regulations for eviction processes or other things that can tie up your time. It's a career to invest in real estate not something to just do on the side.
Actually you are fundamentally right. For the working person. But if you have a business, you Made a million bucks in profit, you can effectively pay 0 tax by buying a 4 million dollar property and boom.
Stocks are like Bitcoin or gold, until you hold them you can feel richer, but to really get profit you must sell portion of them (not dividend stocks). Rental profit is real value, you dont ever need to sell your golden goose. I doing both and some physical gold and silver too.
Richest people in the world.......stocks win, hands down
because they have money to spare. try with your college loan and see fire
The richest guys in the world are not rich because they get a mortgage and pay it down. They get involved in business ownership aka stocks
The richest people in the world own businesses in many industries from tech to agriculture, real estate, banking... They did not make their money as retail investors buying index funds😂
@@stormblade1199 stocks Warren Buffett .....need I say more? Ever heard of him? Bezos hedge funds before Amazon, gates ......u doing ok there...? Might want to check what your smoking, might be laced
@@stormblade1199 read a book on how these guys got started smh lol
REITS for me!
Which one do you like? I'm currently hedging through owning some Store Capital STOR.
@@lorenzmuller3542 - I have a REITS Index Fund in my portfolio with Fidelity.
@@lorenzmuller3542 VGSLX or FSRNX is the way to go ~
Why not do both if you can afford it !
UA-cam says nobody ever loses money in real estate
i had 100k. I purchased a multi family at a sales price of 800k. I net 4k per month minimum. 5 years ago i refinanced and took out 150k cash. I since have purchased a mobile home park netting near 5k per month. I will fill some empty lots and soon i'll be making 6,500 per month. both properties will be up again for refi in 4 to 5 years... tenant will pay down my loan... I don't have any friends of mine that are now retired who are invested in the stock market ...I'm not sure i know anyone retired at 45 from living off dividends... what am i missing here... I know several retired real estate investors a little older than I too
@@jacklan4103 You'll need a few million dollars in dividend stocks to make the equivalent cash flow... $2.1 million approximately if you invest in one of the strongest dividend stocks out there (KO)... see you at 65!
This is apple and orange comparison. It should be reits vs stocks, and real estate vs a business.
So basically stocks are for less rich people and more risk and short term and long term gain, and real estate is for the rich people who have the money and has less risk.
%10 in stock - and %90 in real estate. Thank me later.
I must buy stocks with my money. I buy rentals with only 15% of my money.
Stocks are good but crypto is more profitable
Yeah
Despite the economic crisis, this is still the good time to invest in Gold and Crypto
The rich spend less and invest more.
Investing in this economic crisis will be one of the best things to do.
You are right I think Gold and Crypto are the best to invest on right now.
Golds are good but Crypto is better.
I wanted to trade cripto but got confused by the fluctuation in price
Billionaires have very FEW income producing properties in their portfolio.
Stocks & commercial property are the best avenues to create wealth . Residential property is never an asset it's a necessity. You can't sell your bathroom .
Buy both, just remember they aren’t making anymore land
actually they are, check out monaco. All the good spots are filled, so they are just making new land on the coast to build new real estate on
It’s easily answered ... stocks.
You are losing about 15% in the beginnng with property.
So Stocks is the way to go.
Not always true
How are your stocks doing now?😂
Great content but....
This woman needs more personality. And the graphics guy needs to have text on screen for longer, and not use the flashy animation quite as much. It was a bit overused.
Matt Collins 😂😂😂
She is from real estate....only fool trust her.
1. Maintenance cost, building is just like a car. Foundation and roof might reach closer to its Lifespan.
2. You can use leverage in stock. Leverage in real estate has a ceiling.
The best thing to do right now. Be the private lender, when real estate investor bust, you can take over.
AKEWSD build maintenance projections into your decision to buy or pass on a property. All of that should be accounted for with good cash flow. Look for at least 1% rent to purchase price and you’ll weed out the majority of unprofitable properties.
you don't have a clue about real estate investing...
Bitcoin is the feature investing in it now is the wesest thing to do now especially the current rise
Despite all the economic crisis this is the right time to start up an investment
Stocks are good but crypto is more profitable and preferable
I wanted to trade crypto but got confused by the fluctuations in price
That won't bother you if you trade with a professional like Mr Williams
I heard that his strategies are really good
STOCKS!! Real Estate is to damn expensive!
Takes money to make money. Use stocks to get money then invest in real estate.
Jackson
Well, your not wrong 👍🏿
if I would have invested what I did in the stock market and not real estate I wouldn’t have been living for essentially free, getting a cash flow and if I sold it all today, I’d have 3-4x as much cash as I would in the stock market. I invest in both but without having any facts to backup your claims you really have nothing to base that argument on. Can you elaborate?
@@Jacksonh_56 Yeah... have fun waiting until you're 65 to do that LOL
That 15% return on real estate return at 4:25 is such a joke and misleading information. If your mortgage is 4%, the real return is even less than 3%.
Bo Fu The amount paid to the mortgage is a factor of the return, however for the purposes of this video and real estate investment, the mortgage is paid by the tenant, not the investor unless the property is in an over inflated location like California or New York. The investor receives a return from the mortgage in the form of amortization of the loan. Add the return on investment percentages from annual amortization, annual cash flow, and annual appreciation to the initial investment and then it should be a clearer picture. On top of that tax breaks and deflation of the dollar make real estate a very important investment. Apply stock principles like compounding and dollar cost averaging to real estate and it can literally retire a person from their 9-5 in 5-10 years and create generational wealth for grandkids and great grandkids.
Common return for professionals on real estate: 1% per month =>annual 12% plus the property value goes up yearly 3% so that's 15% already PLUS don't forget the mortgage principal is paid back so that counts also some percentage... And yes you can deduct the variables if the property needs to be fixed etc but still that doesn't happen every year.. I prefer Real estate=> BRRRR
She double talked real estate PROPERTY returns into STOCK EQUITY REIT's. So all the information she provided about depreciation and RE leverage does not apply to REIT's. LOL
STUPID QUESTION!!!
You CANT LIVE IN YOUR APPLE STOCK!???
Love that one! Haha
this is an idiotic analysis... leverage has a cost of capital in the range of 4-5% so you're paying for the use of that capital. Leverage isn't free. If the ROI is 1.5% real and you're paying 4.5% for the cost of capital (interest) then you are losing money with this leveraged "investment", I think Motley Fool needs to understand Math better. In addition, Real estate has very high transactional costs, maintenance costs and other risks too involved to get into in this comment box. Ben Felix (PWL capital) computed that the unrecoverable cost of owning Real estate, very broadly turns out to be around 5% which is well over the typical rate of appreciation.
Who says cost of capital is 4 - 5%? Who says ROI is only 1.5%. That's ludicrous to assume.
Your numbers are way off but I won't even get into that. You seem to forget that all associated property costs are in fact charged in the tenants' rent so that's a non issue. What else do you have?
My eyes! Stop the transitions for god's sake!
first
Real estate is for mugs !
Stocks posses an imaginary value. Real Estate is a real value. Case closed.
Perry so right!!! Until one hold on stocks he can FEEL richer (imaginary), but to make it real profit he must sell portion of asset (stock). Rental profit is REAL without need to liquidate yor asset.
Dividends
Lies and misinformation in this video - Depreciation isn't free again, when you sell that asset you will be hit with massive capital gains taxes as it will be from the depreciated cost basis. The tax man will get his money at some point, you're just deferring it until you sell it. Quit misinforming the public. Also as in my previous comment, your example of 15% ROI is completely ridiculous and false. In that period you pay interest on that $500k at 5% annually so you are losing money not gaining 15%. MATH again, learn math. Also comparing REITs and personal real estate purchases or investing is ridiculous, REITs largely involve commercial Real estate which has much different characteristics than residential so again more ridiculous nonsense in this video.
U are very stupid, don’t talk if you have no idea what your talking about
Investors have to get creative and examine firms across multiple (perhaps overlooked) industries to find bargains. it has become even harder to find good growth stocks that aren't overpriced.
Picking the right stocks for my portfolio has been a big challenge.
@@geraldbenzinger9703 Choose stocks that satisfy the level of risk you want to carry in the equity portion of your portfolio.
Throughout the entire portfolio construction process, it is vital to maintain diversification above all else. It’s not enough simply to own securities from each asset class; you must also diversify within each class.
The right trade can rapidly increase one’s portfolio.
@Scott Riley I’ve seen a review on Frost Hilda’s trades on various investment forums I’m on, how much impact has he made on your portfolio?
It's a shame a-lot of traders still try to find comfort in this unstable market either in *STOCK or CRYPTO* of lately, but the truth is that most traders tend to gamble with their assets this days by not taking advantage and proper study of the market to know where is right for them to invest. Although bitcoin has been unstable for some time, it is still wise to go into *day trading* now so as to grow the little we hold ahead of the upcoming bull market. so far have been successful in trading since i started following Elvin Richard daily signals and guidance* ..... Winning has been on my side and have been able to grow my portfolio 💼 strongly, In 8 weeks i was able to grow my *0.9btc portfolio to 7.5 btc* .... thanks to him.
For contant assistance
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Appreciate the insight will check him out, i have to start trading because holding is so dangerous