Real Estate Vs. Stock Market Returns [Best Asset To Invest In]

A lot of people have biased views of which asset class is the better one to invest in.

In today's video, I react to a very biased tweet about Real Estate being the best asset class. I unpack the difference in returns, nuances to watch out for, and more!

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Disclaimers:

- This information is for educational purposes only and is not personalized in nature. Nothing I say is meant to be a recommendation to buy or sell any financial instrument. Do your own due diligence, and take 100% responsibility for your financial decisions or consult a financial professional to help you.
- I will NEVER ask you to send me money to trade or invest for you.
- There are no guarantees or certainties in investing.
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[CameronFussner]

Sometimes Protecting your capital is much more important than making money. Basically because if you lose your capital, making money is much harder. ''Missing the train'' vs. ''losing your money''. There are a lot of trains, but if your money is gone, it's over.

[RoseBalerus]

I've experienced market fluctuations in both real estate and the stock market. It's crucial to stay informed and adapt your strategy.

[thomaswolff]

Im a stocks guy. I have a taxable portfolio of singles stocks and a retirement account of passive index funds. Both have done well, especially since i bought Nvidea about 1.5 years ago. I love stocks, but a some point bonds will make sense. I own my home and that completes my interest in real estate. Liquidity rules!!

[obrienortega]

Kinda remind me of those life insurance agents saying that life insurance is better than stocks knowing that they take your money and invest in the markets 🤣

[Pouncer_Fox]

Real estate is indeed a lot of work. That's why my parents, who believe in real estate above all else, have a real estate management company to handle everything for them.

The problem is, the company takes out 2% of their annual profits from their bottom line, thereby NOT beating out the stock market by comparison.

Yes, the stock market has market risk, but with real estate, you have tenant risk. You ideally want to find tenants that will always pay on time, but in real life, that is not always the case. Worse yet is if you have vacancies, but you are still on the hook to pay for everything associated to the real estate: Taxes, insurance, HoA, etc.

[BrandonIvan-ce]

Amazing video, A friend of mine referred me to a financial adviser sometime ago and we got to talking about investment and money. I started investing below the $100k mark and in the first 2 months, my portfolio was reading $234, 800. Crazy right!, I decided to reinvest a huge percentage of my profit and it got more interesting.! For over a year we have been working together making consistent profit just bought my second home at the beginning of summer.

[jameswilkerson]

Do both. My networth is 50% retirment accts. and 50% realestate equity. I use my w2 income to contribute to retirment accts. And use my real-estate money to purchase more real-estate.

[Someone-tnur]

S&P beats the snot out of the real estate funds I've looked at over the last 10 or 15 years. Not even close. If you are looking to own real estate directly, and you are able to do the work, you can make a lot of money, and you might be able to beat the S&P, but not without putting in a lot of work.

[mattbillenstein]

I mean, also just the hassle of owning property - your time is worth something and being a landlord is a thankless job to some extent.

[knottheory]

This is like me claiming accounting is a better investment than stocks because my salary goes up faster than the S&P (it doesn't actually lol).

My grandfather started and ran all kinds of businesses. A gas station, grocery store, pool hall, fireworks stands, etc. The only thing he ever abandoned was renting houses, he said it was too much work for too little return.

[idkmybffjill]

Guys guys guys, can’t we all just buy reits? Everyone happy

[TheTrueHardcorefrk]

I feel like there's more control in real estate than equities. With control comes work to understand and execute.

[larrykhooper]

The article was referring to income taxes, not real estate taxes! Another words, he saying that if he accounted for the income tax savings rate of return would be even higher.

[lengerer]

Dollar for dollar stocks are better.
Taking into account leverage, property is better.

I have both.
Property is a lot more work, stress and needs attention.
Stocks/etfs are stress free, require no effort.

As soon as I stop work I’ll start selling my properties, keep the new ones (no to little maintenance) and put everything into high dividend etf, bonds, high interest term deposits etc
Eventually sell all properties as I age.

I’m lucky enough to been blessed to buy property before the massive increases.

I’d recommend young ppl now to DCA into ETFs.

[larrykhooper]

Is true, that an investor should diversify into many different kinds of assets. But it is undeniably true, that the best rate of return is through leveraged real estate ownership. And, bottom line is rate of return, is what increases your net worth

[tamwilfred]

I am no expert in real estate, and it seems like there is a steep learning curve to making a profit. In contrast, with stocks, I can simply invest in an S&P index or total market index and relax. Additionally, real estate requires a significant amount of upfront capital. The stock market appears more transparent compared to real estate; I would need to monitor migration trends, stay updated on local laws and regulations, worry about increases in home insurance, and more. I still want the flexibility to move around, so real estate might not be for me. In the future, I might own a property or two, but I would prefer to keep most of my assets in equities.

[LA-xjtz]

Do you know that you have to pay property taxes, insurance, repair, and maintenance?

[aj]

Total market index funds: Great industry diversity. Totally passive. Instant liquidity with the click of a button.

[nmr]

You are so right. I was one of those people who listened to the gurus and 10 years ago no would have told Real Estate beats everything. Not true for everything. I like what you said about real multimillionaires a pretty well diversified. They just don’t own real estate and that’s it. They own Real Estate, stocks, bonds, and other businesses that cash flow and can be sold for profit…. Real Estate also does not fit for everyone’s personality.
I like Real Estate because it’s tangible, but I also realize it’s not bullet proof and a lot of maintenance and upgrades need to be done on properties you own overtime.
It’s not set and forget and collect checks. Yes, you could do maintenance 1 to 3 times a year and that’s it and that beats a 9-5. But you still still need to prepare yourself for a lot of work with the gurus didn’t tell you about….
And tenets and toilets are just the tip of the iceberg. And fix and flips can be a lot more challenging then what they show on Flip this House TV and the other shows on TV to get people motivated…

[asdasddas]

Oh wow, this is the first time I didn't hear the "I'm not a financial advisor" line