Real Estate Vs Other Investments

[Nader Hachem]

Curious on what investments people have out there. I'm heavily involved in index fund investing in like 401k and Roth IRA.

Is real estate your favorite type of investing? Why or why not? Why would you prefer it against the other types of investment?

[Jody Sperling]

I can't think of a single benefit to the 401k. Someone convinces you to separate yourself from your money, you then give it to someone who charges you a fee to manage the money, but the only managing that's done is sticking it in a "diversified" fund of some sort. If you're "lucky" your employer matches up to a set percentage, but all that money is eaten by fees, so it's kind of a bummer. Then over the course of however long, people try to make you feel good about your investment by using fake numbers like average rate of return. Smoke and mirrors.

When it comes time to withdraw the money, someone gets to tell you how much, when, and at what future tax rate. Deferred taxes guarantees you pay more to the government than you would have. That leaves Roth IRAs, but they cap how much you can invest, and you still are forced to part with your money for decades.

I'd far rather put as much of my money in an appropriately designed, high cash value, whole life insurance policy, borrow out from the policy and buy real estate. I treat the policy as a bank account and repay it through my real estate rent. The policy grows tax free, not deferred, for the entirety of its existence. I have access to the cash to invest it from day one. If I die unexpectedly, my family is taken care of.

Retirement accounts were meant to replace company pensions by reducing employee income during employee working years to save businesses money. Sorry. I won't play that game. Last year, I grew my net worth over $300,000, but when I file my taxes, I'll show a loss. If I liquidated my assets, that "loss" would be worth $300,000. If I'd invested like a good employee in a 401k, I couldn't have touched that kind of growth. Seems like a no-brainer to me.