Real estate or stocks? That is the question so many of us want to know in order to get rich. As an investor of both asset classes for decades now, the answer comes down to your financial means, risk tolerance, personality, and ongoing returns. Your preference for real estate or stocks will also be highly dependent on where you are in life as well.
We’ve got real estate tycoons and we’ve got stock market tycoons. We’ve even got wealthy bond investors such as Bill Gross who pulled in over $100 million a year when he led PIMCO. Therefore, obviously, you can get rich in real estate, stocks, and bonds.
It’s important to realize there are no renter or cash tycoons. The return on rent is always -100% every single month. Meanwhile, we can only get ~0.5% or so on cash these days, which may not even beat inflation. To get rich, you must take calculated risks.
Even though I worked in equities (stocks) for 13 years, for the average person, I still prefer real estate over stocks. Perhaps it’s because I had a front row seat watching so much carnage during the 2000 dotcom bubble and the 2008-2009 financial crisis that has me jaded.
That said, I firmly believe everyone striving for financial independence should own both stocks and real estate. The percentage weighting of each asset class as part of your portfolio will then be up to you to decide.