Buy $20,000 worth shares of stock or a mutual fund, and what do you have? Well, unless you are Warren Buffet, you probably just bought a minuscule, tiny, microscopic piece of the company or mutual fund. You get the idea - like 1/100th of 1% (or 0.0001%) of a mid-sized company valued at $200 million.
As you can imagine, it is hard to have much of a voice in how a particular company is run, when you own such a minority share of the company. Most investors in stocks have never even seen the corporate Headquarters of the company they are invested in, nonetheless been in the Board Room when key decisions regarding their investment are made.
Contrast that with a $20,000 investment in Real Estate. Here you have much more control over your investment. Here's why:
It is a truly tangible investment that you can see and touch;
Roughly 20% of the value of a typical investment home is land, and land is practically indestructible, so this portion of your investment is quite safe;
The remaining ~80% of the value is the structure(s), and even should it burn down, your replacement value insurance will completely rebuild it for you; and
YOU decide how to manage the property, what type of tenant you want (this should cover your new mortgage payment and provide extra monthly cash flow), when to sell the property, etc.
After the tumultuous ride that so many former Wall Street darlings have seen this past year, weighed down by poor corporate governance, excesses, and bailouts, do you prefer to let them be the custodians of your financial future, or do you prefer to be in control?
by Mike Lima, Owner of Freedom Achievers, LLC