Real Estate or Stocks?

The case for Real Estate: 5 points

#1

Suppose 5 years ago two individuals made a purchase. One bought a 500-thousand-dollar house and the other bought 500 thousand dollars in stocks. Now let’s say both of their investments doubled in value. The difference is that the individual who bought the house had the luxury of living in a nice, beautiful house over the last 5 years, whereas the stockholder got nothing over those five years other than the stress of always wondering if his/her investment would go up or down in value.

#2

Now let’s suppose both individuals decide to cash-out so to speak and buy a sailboat and sail around the world. The individual who cashes out his stocks would be hit extremely hard by capital gains taxes. But the house owner would not have to pay a single dollar in taxes.

#3

Now let’s go back 5 years when they were both making their initial purchases. To buy the 500 thousand dollars worth of stock that individual had to have the 500k in hand. The other individual only had to put 5% down but was awarded the increase in value on the entire house value of 500k!

#4

Again, the stock certificate provided no value over the 5 years before cashing out. However, a piece of land can produce crops, or a city property’s basement can be rented out to generate secondary revenues and income.

#5

And lastly, when buying stocks, the most you can lose is 100% or nearly close to that of your initial investment – think Blackberry, Worldcom, Enron, Blockbuster and Nortel etc. No one ever bought a piece of property or a house in which when they were ready to sell it was worthless and had No value at all. Hence the phrase REAL estate.?

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