Stock Market

1. 7 Ways to Compare the Stock Market vs. Real Estate/gjergj kol mihilli Stock market The stock market is the market in which part of publicly held companies are issued and swap either through interchange or over-the-counter markets. Also known as the equity market, the stock market is one of the most required components of a free-market economy, as it provides companies with access to capital in exchange for giving coverer a slice of ownership in the company. The stock market makes it possible to grow small opening sums of money into large ones, and to become well-off without taking the risk of starting a business or making the donation that often accompany a high-paying career. Real Estate Real estate is something that you can physically touch and feel – it's a real good and, therefore, for many financiar ,feels more real. Maybe this partially accounts for the high return on the venture, as from 1978-2004, real estate has had an average return of 8.6%. For many time this investment has generated consistent wealth and long term respect for millions of people. Compare the Stock Market vs. Real Estate

2. 1. Compounding Growth If you made a 20% down payment, and the property value rises 5%, you made a gain of 25%. Although the bank owns 80% of your property, you get all the gains, so the 5% rise in overall value is a 25% rise relative to your 20% down. The best part is this is just after year one. The growth compounds significantly after you have held a property for a certain amount of time. There isn’t anything like this in the stock-market. 2. Long-Term Returns Stock index funds can underperform inflation over certain time spans. These time spans can include several decades. Real estate has never underperformed inflation over a decade. 3. Taxes for Income You get to deduct your mortgage interest and depreciate your property on your taxes. This can mean that you effectively break even on your property, even if the rent doesn’t cover the mortgage. The stock market does not have these advantages. 4. Taxes for Selling When you sell a stock, you pay capital gains taxes. However, when you sell real estate, you can put the proceeds in a 1031 exchange, whereby you can defer paying the capital gains tax. Therefore, buying another property within a certain time period helps you compound your growth faster since you have more funds. In America, there are two tax systems: one for the informed and one for the uninformed. Both are legal. Click to Tweet 5. Inflation If you get a fixed-rate mortgage, you have locked in your biggest expense for 30 years (or less depending on what type of mortgage you get). Thanks to rent increases, your cash flow profit margin should improve year after year.

3. 6. Leverage You can buy stocks on margin. However, margin interest rates are substantially higher than interest rates for loans related to real estate investing. Additionally, margin loans can get called if your stocks fall below a certain level. Real estate loans are only called if you stopped making payments (generally speaking). 7. Digital vs. Real I will never forget the night that I had to cancel a date with my wife and stay on a conference call until 10 p.m. because a CFO mis-accrued revenue numbers, and the company was going to have to restate their financials. The stock went down 25% the next day, and there was absolutely no way we could have known about this. Logging into the company’s account wasn’t fun that day. I also don’t know how fun it would be for my 4-year-old boy to log in and look at stocks and bonds. But it can be fun to drive by real estate. I like taking my kids to rental properties and having them help me fix places up. I think it’s good family bonding and teaches a good work ethic.