Summary: Decisions, decisions! Let’s learn about the main differences between investing in real estate and investing in stocks, so you can decide what’s best for you. Plus, we’ll get you started on the right track.
There are plenty of opinions out there about where, how, and when you should invest your money.
We know it can be a lotttt when you’re starting out.
So, today we’re focusing on two main assets that will take you in very different directions. And to be honest, there’s a bit of a debate about which way is the BEST way…
Should you invest in real estate or stocks?
It’s important to understand where these assets take you before making the decision, and of course, there are pros and cons of each.
Soooo, let’s play a little game of “this or that.”
Because eeeeverything is more fun as a game. 😏
We’ll compare real estate and stock investing in detail and get to know what they both have to offer you as an investor. Then, once we have ALL the deets, we’ll look into specific ways you can get started now!
Curious which asset will win? No cheating! Let’s start with an open mind, so you can see all sides to this debate.
By the time we get near the end, you’ll have a pretty good idea of how you want your money to work for you.
You miiiight even be ready to get into the action yourself. 🤩
Here’s what we’re learning today:
- What is stock investing, anyways?
- Now, what’s real estate investing all about?
- Getting deeper…the pros and cons of stock investing.
- Pros and cons of real estate investing.
- How to start your investment journey.
What is stock investing, anyways?
The beginning is as good a place as any to start…so here we go!
Stock investing is all about buying shares of ownership in public companies.
It’s how normal folks (like us) can get a slice of the pie in the continuous money exchanges of the stock market.
And don’t worry. If simply reading “stock market” gets your heart racing a bit, you’re not alone. 😅😅
The hope is that the companies you invest in will grow and thrive over time, producing a profit for those who decide to sell their shares with the increased value. But, as you probably know, the stock market fluctuates constantly, making it a biiiit stressful if you’re watching potential profits go up and down.
That’s why there’s more risk in stock investing than others, which we’ll get into later on.
Now, what’s real estate investing all about?
Investing in real estate looks a lotttt different than the fast-paced craziness of the stock market.
Real estate is more of a long-term investment because it relies on the purchase and sale of a physical property. 😌😌
It’s not as simple as just clicking a button to transfer ownership of an entire apartment building, for example.
As far as the type of properties goes, the list is pretty extensive. A property can be anything from an empty lot, to high-rise apartment building, to a single family home. There are also commercial buildings, factories, warehouses, restaurants…you get the idea.
It’s important to note that real estate is appealing because of the diversity and options it offers investors. It’s also not as affected by the changes in the economy as the stock market.
Speaking of the stock market…let’s get back to stocks and take a closer look at why you might invest in them or not.
Getting deeper…the pros and cons of stock investing.
Now we’re getting to the nitty gritty, so hold tight, okay? We’ll look at the benefits of stock market investing, and then discuss the notttt so great parts.
Here are some of the main pros to investing in stocks:
Quick to buy and sell
Newbie investors really love the simplicity of getting started in stock market investing. The liquidity of stocks allows investors to quickly get into the action, and simply exchange ownership of stocks at any time.
Low cost of starting
It’s also very affordable to get started in the stock market. Investors don’t need a ton of money to begin, which is one of the most appealing parts of this method.
Easy to diversify
Being able to buy shares of lots of different companies gives investors a ton of diversity to expand their portfolios.
Potential for growth with economy
A thriving economy offers a huge benefit to investors, because the stock market is directly tied to economic expansion. When customer demand rises, sales increase. When companies’ sales increase, the shares go up, which means more money for shareholders (investors).
As you can see, investing in stocks has its own unique benefits that make it appealing to investors. Butttt there are always two sides to every invested coin 😉, so let’s look at the drawbacks as well:
Risk
The stock market is directly affected by any and all changes in the world and economy. It can be pretty volatile in how quickly it goes up and down.
Not for the faint of heart
Watching the stock market closely brings a biiiit of stress for many investors. As easy as it is to buy into a company, it can be JUST as easy to lose your money when the stock goes down. Get ready for an emotional roller coaster if you are monitoring your investments.
Taxes
Depending on the growth of an initial investment, stock market gains can bring significant taxes for investors. Need we say more on this one?
The pros and cons of real estate investing.
Okay. Are you still with us?
We’re hitting you with a LOT of info today…we know. But hey. When it comes to investing, the more you know, the more money you can make! And we want you to have the info to make the best decisions for you. 🙌
So, here we go with the main pros of real estate investing:
Hedge against inflation
Real estate investing really shines when it comes to inflation. Unlike other assets, properties are not hugely affected by inflation. This provides a way for investors to continue to make a profit, even in a bad economy.
Tax benefits
Certain real estate investments can offer huge tax breaks to investors – saving tons of money to funnel back into more investments.
Value appreciation
While real estate investments can be long-term, this is a good thing for investors. Properties continue to increase in value as time goes on, resulting in quite a pretty penny when the property is eventually sold for profit.
Land will always be a necessity
With housing being an essential need, there’s less risk associated with real estate. While there’s always SOME risk in investing, rest assured that there will always be a market for places to live. The tangible aspect of real estate provides a level of financial security to investors.
Lots of diversity
Investors can get portfolio diversity by investing in all different types of properties.
There’s quite a lot of potential in real estate investing. But, since we’re showing you all sides to each asset, here are the drawbacks:
Longer term and less liquid
Long-term investments can yield a large return, but patience is a necessity in real estate. Investors that want quick turnarounds should look to more liquid investment options.
High transaction costs
There’s no way around the “takes money to make money” part of real estate investing. Purchasing, fixing up, and managing properties comes at a high cost. Getting started in real estate investing is not cheap, and it could take a long time to see any return.
We hope this offers you an idea of which investment asset might work better for you.
Baaaasically, if you have time and lots of money to invest, you could see a significant return from real estate investing. But, if you prefer to get started without much money, can handle constant fluctuations, and want liquid investments – stocks are more up your alley.
How to get involved in real estate investing
We’re a bit biased towards real estate investing over here. So, if you’re leaning that direction, we’re your go-to gals!
There are several options for getting started in real estate investing, like house-flipping, owning rental properties, apartment syndication, and REITs.
The true winner for us is apartment syndication. 😍😍 If you’re looking for passive income investing (big reward with none of the toilets, trash, tenants) on your way to true financial freedom…look for further!
Apartment syndication allows you to pool your money with other investors to purchase a property, while your syndicators or sponsors do ALL the behind-the-scenes work.
Sounds pretttyyyy good, right?
Learn more about apartment syndication here:📝 Apartment Investing and Apartment Syndication 101: Start Here.
We’re here to answer any questions, OR to get you started on your own real estate investment journey. Reach out today!
GET ME ON THE KITTI FREEDOM CLUB
………..
Rate, Review & Follow!
“I love Cashflow Multipliers.” ◀️ If that sounds like you, please consider >> rating and reviewing our show! This helps us support more people — just like you — move toward the financial futures that they desire. Click here to let us know what you loved most about the episode!
Also, if you haven’t done so already, follow the podcast. We’re sharing the best tips, tricks, and secrets in owning your own time so achieving financial freedom early and permanently becomes easier. Follow now!
Comments +