Which sounds better to you? An investment in the stock of a company upon whose management you will have to depend not to cheat, lie, steal, or simply be ineffective in marketing their product or service, in a stock market which is hysterically sensitive to the fluctuations of world events over which you have no control?
Or an investment in a piece of real estate in which you may be able to live, or rent to someone else for income, or simply go an walk around on, knowing that you have purchased something over which you are in control about which you can make all the decisions?
Land ownership had, until the twentieth century, been the measure of a mans character. As archaic and unfair as that practice may now seem, land is a limited commodity without which no other business can function, and which has inevitably increased in value for those who remain patient. While millions of people have turned to the stock market as a way of growing their assets, real estate investing, for a longer period of time, has proven itself the much safer way to accumulate wealth.
The New Era Of Real Estate Investing
Up until the 1960s, in fact, real estate investing was the exclusive domain of the very wealthy and international conglomerates that had the financial substance to purchase and develop land for commercial uses like industrial parks and shopping centers. But today, with the arrival of the Real Estate Investment Trust, or REIT, the small investor can join with many other small investors and experience the benefits of real estate investing without ever having title to a single piece of property.
The secret to succeeding in real estate investing is to do it with OPM, or Other Peoples Money. You leverage a little of your own money with a lot more of someone elses. And you can buy more property than you would ever be able to afford on your own. Your risk is much lower, and your chances of profiting are much higher.
Leverage Vs. Margin
Leverage is to real estate investing what margin is to the stock market, but without the volatility. Stock market trading has violent swings on a daily or even hourly basis, but the pace of change in real estate prices is seldom above a crawl.
For those in real estate investing to see their portfolio values rise ten percent in a year is an almost unheard of event; but on the other hand, while the gains from real estate investing be small, they almost never become losses. Those who can get into real estate investing when everyone else is getting out, as is happening now in the housing market, and who can stay invested over time, are looking at the chance of an investing lifetime.