Real Estate Or The Stock Market? Where To Put Your Cash?

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It doesn’t matter if you have $1,000 or $10,000 at your disposal. Engage in investment activities. You won’t regret it. Do you think that millionaires like Warren Buffet simply had success? No, they smartly invested their funds. The question now is what you should be putting your cash in. Well, you have 2 options if you want to make a fortune: real estate and the stock market. Opinions are divided on this matter, from the opinion that real estate is better, to that of the supremacy of stocks. Don’t you know which one is right for you? If you really don’t know what to do, you should better continue reading.

Real estate

If you do have cash to spare, then you should be investing it in real estate. As you may already know, real estate investing is highly profitable. You have the possibility to make $50,000 a year, which is more than enough. This may not seem like a fortune to you, but you have to understand that only full-time agents make this kind of money. The good news is that anyone can invest in real estate. This means that you don’t necessarily have to be a savvy investor. But don’t fool yourself into thinking that the process is simple. You have to make a great many considerations and overcome any risks that you may encounter on the way.  Do you want to know something? All the effort is worthwhile. As mentioned earlier, you can make a pretty high income.

How to start investing in real estate

Penetrating the real estate market is far from being complicated. If you have an ample amount of cash, then you might want to consider buying rental property. Sure, becoming a landlord may not be the ideal scenario, but you have to keep in mind that you can earn a great living with a rental property. The great thing about investing in rental properties is that you can double your money in a short amount of time. This isn’t possible with other types of assets, you know? If you’re determined to achieve financial independence and make a fortune from passive income, then follow these steps:

Find a good location – In case you didn’t know, one of the most important things in real estate is location. The demand and price depend on the location, so you should better be careful. What you should be searching for is nearness to important roads, public transport, and educational institutions.

Don’t start big – When it comes to becoming a real estate entrepreneur, you don’t have to start big. Purchase a single unit instead of an apartment building. Afterward, you can sell the rental property and buy a new one without paying taxes. How do you do that? By realizing a 1031 exchange. Basically, you have the opportunity to sell an asset and reinvest the profits. Just for your knowledge, you can exchange the single unit for a rental property of any value.

Choose the right kind of tenants – Did you really think that your job is done when you buy the rental property? No, once you have a single unit or an apartment building in your possession, you have to choose tenants that will make your business successful.   Check everything from reference cards to credit cards when screening prospective tenants.

Stock market

Maybe you don’t want to become a real estate investor. There’s no reason why you shouldn’t invest in real estate, but nobody can force you to do something that you don’t want to do. So, what are you going to do with all that cash? Well, referring to the previous argument, you can invest in stocks. But is this really a good idea? If it wasn’t, then it wouldn’t have been mentioned in this article. While it’s true that the market experiences ups and downs, as a rule, stocks earn you more in the long run. When you invest in stock, you invest for the long term. In other words, you hold the securities indefinitely.

How to invest in the stock market

The thing is that there is no magic formula for investing in the stock market. This doesn’t mean, however, that there aren’t any points to follow. These are the rules that you need to know:

Stock market dementia doesn’t last forever. The market has periods when it’s dislocated from fundamentals. What you can be sure of is the fact that this dementia isn’t permanent. When you have lost your entire hope, the stock market gets better.

Don’t be influenced by your peers. It’s tempting to do what everyone else does. Yet, if you want to be a successful investor, think with your own head. It will be better for you in the long run.

Advance money you don’t need right away. You can just as easily lose money as you make money. So, only invest money that you don’t need right away. Use capital that you won’t be needing for a couple of years.

Don’t let your emotions get the best of you. Even professional investors become nervous from time to time. Somehow, they managed to control their emotions. Follow their example. If you let your feelings get the best of you, you’ll make poor decisions.
Determine how much money you want to put in. Just like with real estate, it’s advisable to start small. Figure out how much money you can invest and buy some stocks. If you want you can opt for mutual funds. You can choose between many products, like equity funds and arbitrage funds.

The bottom line

Neither options will kill you, at least not from a financial standpoint. It’s up to you to determine what type of investment is the best one. After all, it’s your money that is at stake. Don’t rush into making a decision. Carefully consider the advantages and disadvantages.