Building up Cash vs buying Stock

[Noah Levenson]

I’ve been going back and forth on whether to dedicate 100% of my extra cash each month to my real estate account OR continue dedicating some portion to dollar cost averaging into the stock market (via Wealthfront).

I’m curious what others think? And how people distribute their investments.

From the cash angle, I’m looking to make my first few RE investments as soon as the right deal comes up. So it makes sense to build up the largest possible stockpile.

From the equities side: dollar costing in consistently over time into highly diversified indexes is a pretty proven long term strategy and by getting out of the market right now, I’m risking have cash on the sidelines that could grow and compound over time.

Thanks in advance, looking forward to hearing what all you smart folks think!

[Brian Burke]

I do both, but the good thing about stocks is they are liquid.  If you build up a position and subsequently find a real estate opportunity that is too good to pass up, you could always liquidate your stock position to take down the real estate.  

It could also happen that once you find a property you want to buy, there will be other sources of funding available to you and you can keep the stock position and continue to build it.  You just never know...

The two disciplines aren’t mutually exclusive.