Stocks Investing vs Real Estate Investing
Investing into the stock market and investing into real estate are two great ways to set yourself ahead financially. There are pros and cons to both of these strategies. Both of these strategies can also be fantastic for making extra passive income.
So, let’s look at what they are. Stocks represent ownership in a company. When you buy a stock you are investing into the growth of the company and if the company offers dividend paying stocks they can even bring you some passive income.
There are a few advantages of investing into the stock market over real estate investing.
1. Appreciation
Historically the stock market appreciates faster then any other asset class out there. 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 do not have to monitor the security or put up with bad tenets. All you have to do is to buy the stock and then hold onto it.
Now beginning real estate investing, 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 best part about real estate investing is that it allows you to invest with leverage. While over the long term stocks have appreciated faster then houses, you can buy a lot more with less in real estate. 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.
