One of the factors that we believe makes real estate a superior investment to stocks is you can use your hard-earned money as leverage to control an asset worth much, much more than the amount of money you actually have. We call this the down payment and, these days, if you’re interested in buying a $100,000 house as an investment, you need only come up with about 20% of the total in order to control the entire asset.
With what other investment are you going to be able to do that and live to tell the tale? If you even think about saying the Forex Market, we’re going to suggest you get a good long head examination. Sure, brokers in the bucket shops will be wetting themselves at the prospect of loaning you money, called margin, to roll the dice and see if you can stay in the game more than 20 minutes. It might seem like a low interest rate loan until you realize it’s calculated on a continual basis, second by second.
Stock market? Not much better. Yes, these slick operators also love to let you buy stocks on margin. Nothing makes their morning quite like an investor getting swamped by a margin call and having his/her entire portfolio automatically liquidated by a process no one really understands.
The previous two examples of borrowing money to subsidize your gambling…er…stock or forex market habit is simply ignorant. You are going to lose. They are going to win. That’s how their “investment” games are really played. In real estate investing, as long as you make your payments on time, you will not have your property randomly sold off to satisfy the cravings of Wall Street’s perverse greed.
stock.xchng / PocketAces
