Stocks vs Real Estate

Two great ways of investing your money is through the stock market and through real estate. There are pros and cons to both of these strategies. Actually they can be a good way to make a little extra passive income.

So, let’s take a closer look at what they actually are. Stocks represent a share of the company. When you buy a stock you are investing into the growth of the company and if the company offers dividend stocks they can even be a nice source of passive income.

There are a couple advantages of investing into the stock market.

1. Appreciation

The stock market has historically appreciated faster than any other asset class. If you buy a $100,000 house and put $100,000 into the stock market chances are in 20 years you will have a lot more money in the stock market then the value of that house.

2. Passive

Another advantage of stock market investing is that it is a passive strategy. You don’t have to monitor the security or deal with tenets. The only thing that you have to do is to buy a stock and hold onto it for the long term.

Now beginning to invest into real estate, can be very powerful. It involves buying a house and then renting it out. This strategy does have its advantages over stocks.

1. Leverage

The biggest advantage of real estate is the leverage. While a house might not appreciate as fast as a stock, you can invest into real estate with less. If you are only putting 10% down then you can buy 100,000 worth of real estate where you would otherwise be able to only buy $10,000 worth of stock. This makes a big difference.

2. Physical

Another advantage of real estate investing is that it is a physical object that you can touch. While stocks are normally traded online and all the information is saved on a computer, real estate is actually something that you can visit which is a big deal for most people.

Both of these strategies can make you very wealthy over the long term. It is just a matter of finding a method that works and then sticking to it.

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Tagged with: Advantage • Asset Class • Buying A House • Closer Look • Couple Advantages • Dividend Stocks • Invest • Leverage • Market 1 • Money • Passive Income • Passive Strategy • Pros And Cons • Real Estate Investing • Stock Market Investing • Tenets

Filed under: Future Options Trading

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