You got stocks and you got real estate. And if we have them do battle with each
other and... I'm in my Clubhouse right now. They probably wouldn't appreciate if I
broke these but if these things did battle, which one is going to win? Which one
is actually going to be better?
There are 4 criteria that I think you need to be aware of when understanding
the answer to this question. And what I want to do is give all 4 for you
today. Now, I am going to warn you right now. Spoiler alert, I'm all about real estate,
right? I mean hello, duh, it's my channel and it's all about the power of mindset
in creating wealth and I don't know a faster way to generate wealth and
through real estate because of a huge bonus component that I'm going to share at
the end. But let's just start with the basics, right? There are 4 main
considerations when it comes to stocks versus real estate. Growth, market
volatility, cash flow and diversification. Now, I want you understand, I'm not here
to say that the stock market is bad and in any way shape or form. I just want you
to understand why I am a fan of real estate and what my beef is with some of
the alternative investments out there. First of all, when it comes to growth,
let's just take a look at the S&P 500, right? The S&P of 500 is a collection of
the top 500 companies that people are investing in the stock market. They're
your blue chip companies, they're Apple and Microsoft and the S&P500 long-term is
one of the best indicators of the US economy. It's also one of the best
indicators of the stock market. Now, I'm going to tell you since 1928, since the
stock market came about, just shy of 10% is what this averages year-over-year. Now,
you need to understand there might be a year of 20%, there might be a year of
negative 30%. So, you do want to understand that in stocks, it's not one
of those games with the SCP-500 where you get in and get out and then get in.
This isn't day trading. This is if you're going to play, you got to play long term.
Which means in 10 years. You're going to what? You're going to double your money. 10%
times 10 years is 100%. Real estate. I want you to understand
just like picking bad stocks. In the real estate arena, real estate most people
actually probably do 3 to 8 percent. It's accidental investors, its
investors that don't even know what they're doing. And I would say that... That
is somewhat typical for people. But when you add an appreciation in some of the
big booms, people can even do over 10%. If you're playing real estate as an expert
level then for me, I'm averaging on my real estate somewhere around 20%.
I just closed on four deals where I'm projected to make 26%. I've done another
fantastic deal earning me 18.7%. I'm always over 15% and I'm usually 20 plus
percent. This is compounding and if you understand the benefit of compounding
interest, this can compound. So, for those that don't know what they're doing in
real estate, the stocks might be better for you. But for those you that get some
know-how or work with an expert team, I've got a team for example where I've
helped thousands investors. In the last 5 years my investors have made
over 70 million dollars in real estate. So, if you know what you're doing,
real estate can be superior. 10% is nothing to squawk at. If you want to
go to college, get a degree, work for somebody else for 4 years and you're
just doubling your money every 10 years then here's the cool thing,
40 years from now you can be sitting on a little pile of money. Real estate
has a lot more potential. You know, but this is a real option for people. Number
2, market volatility. Every 8 years the market and the stock market is going
to see a correction. And if you're the long-term player, you just don't care. But
if you were to enter the market with a whole pile of money, when would you want
to do it? After the market tanks. When the market drops 20, 30 percent, you
go in and that's when you slam down money. Because statistically over the
next 36 months, you will recuperate all that money back plus get
some really great growth. The stock market has a corrective cycle every
8 years. Real estate has a corrective cycle every 15 to 20 years. And
real estate's corrective cycle is based on supply and demand.
Basically, we... The economy's going up, people get excited about the increased
prices on real estate and then they build more houses and then people move
in and then they build more houses and then people move in and then everyone in
their dog is building houses and we ran out of people to move in because
population hasn't caught up yet. And then real estate pop. You know the bubble pops
and the market goes down. And then you got to wait several years before the
population catches up. And eventually, people are tired of living with other
people and moving in and having multi-generational homes and they say, "I
want to go buy my own home." And all the sudden, building starts happening again
and the market goes like this but it is going up over time. So, understand that
real estate with the stock market, it will crash 100%. I have a strategy where
I actually avoid that market volatility by buying
my homes underneath the median. Meaning a million-dollar house in a bubble crunch
is going to crash hard. A $500,000 house is gonna crash. $300,000 house is kind of
gonna crash. $250,000 house going to crash a little bit. $200,000 house hardly fills a
bump period. So most of my homes I buy are between 100 and 200 thousand dollars.
Which is why in 2008, the last mega crash, my company and my real estate was
growing head over tail. So here, you can't do anything to really protect yourself
from the market going down. So, the market is going to go down. And here, the market, you
can actually get it to go flat and up instead of just up and down. So, that's
the difference there. Number 3, cash flow. The stock market is not going to be a
playing you cash flow. You might be able to collect on some dividends here and
there. But for the most part, you're just throwing your money in and speculating
that it's going to go up over time so you really don't have that cash flow
component. Real estate on the other hand, depending on the market that I'm in. I'm
usually getting a cash on cash return between 5 and 10 percent. Now, that's
part of my 20%. What I want you to understand is I'm actually getting paid
every month on the homes that I'm buying and that is super attractive. Because my
definition of an investment is something that pays me instead of something that
doesn't. Lastly diversification. In the stock market, the SCP500, that's what
diversification is. It means, that you're investing a little in this company and
this blue chip company and this one and that one. And some are going to tank and
some are going to crush it. But if you're investing in the most successful
companies over time, they go up in value. So, you have tons of diversity... Diversification
over here on the stock side. Real estate, you don't have the kind of
diversification that you have over here. The diversification comes in not putting
all your eggs in one commercial property or one apartment complex. For me at least
it's I have a stake in several single-family homes. In several different
markets and that's my diversification. Now, Warren Buffett did say this, Google
this. He said, "Diversification is for people that do not know what they are
doing." To some extent, I have found that true in real estate. Don't get me wrong. I
have some diversification. I do invest in some different things. I do some
cryptocurrency, some commercial. But single-family homes, this is my
I jam where I'm buying hundreds of homes personally every year and I'm growing my
net worth whether the economy is going up or whether the economy is going down.
Now, I did say there was a bonus so I'm going to end with this. The last big
difference between stock and real estate is that real estate can do something
that stocks won't and this is where I can literally add an extra digit. A third
digit to what I'm doing over here. Real estate has this cool thing called
leverage. And leverage done correctly is your friend.
What is leverage? Dude, if I want to buy a hundred thousand dollars worth of stock,
I have to get a hundred thousand dollars worth of stock and I got to put a
hundred thousand dollars worth of stock in. Real estate, if I want to have a
hundred thousand dollars worth of real estate, I can put 20% down. 20 grand and
buy a hundred thousand dollars of real estate and have that hundred grand grow
the way that it does. Stock market? More-or-less other than some options and
puts, your putting dollar for dollar in but in the game of real estate, you have
a huge game of leverage which means you can start playing with a whole lot more
money than you actually have. And that leverage, what that really does
is when you start really crunching the numbers, this blows this out of the water.
It's not that I don't like stocks and in truth, I don't have any money in stocks.
And good conscience, I just can't because I'm making way too much money in real
estate. Doesn't matter if the markets going up or down. It's a strategy that
works. By the way, if you want to know what that strategy is or taught to a
member of my team that can actually lay it all out for you, all you got to do is
click the link in the description below and you can actually read up on my
strategy, you can learn how I'm earning. 250% higher,
two and half times more than regular rentals. How I'm crushing it in the real
estate game. And for those of you they're like, "I don't know if I want to even
learn real estate but I want to passively make the money from it." Like
the stock market. I've got options on how to do that too. All you got to do is speak
to a member of my team. Let them evaluate your financial
situation whether you're starting with nothing or a lot because I started with
nothing. And they'll build a game plan for you and let you know exactly what
your options are. And finally, if you are not a subscriber and you like this video,
you've made it into the video so you might be liking
the channel. I produce videos like this every single day. In fact, if there's any
topic Under the Sun on real estate, wealth building and being successful in
the mindset of the wealthy, you're likely to find it on this channel and that's
what I'm dishing up every single day. So make sure that you do subscribe and I
will see you on the next video.