Investment Strategies, Mutual Funds vs. Real Property Investments

Let me be the first to say, I am no financial advisor, so please take this with a grain of salt, as it is simply my perspective when examining the numbers… Let’s take a look at the options when considering where the best place to invest your hard earned money would be.

The only thing constant is change, which is what we experience in the investment game on a daily basis. It’s a full time job to keep up with the fluctuating Real Estate market, but with the right team, the returns can be impressive. The standard of practice in the past has been to put part of your paycheck every two weeks into a 401K or IRA that your employer offers. Anyone made $20,000 in their 401K in the last month? I sure haven’t.

It does require more work and investment of time in the beginning to become educated in Real Estate, so you can make wise decisions. Consider this however, it can provide you monthly passive income and/or large returns in a short period of time. If one were to work part time at this, and do two fix-and-flip properties a year, and make $20,000 per (on the low side), the majority of America has just doubled their salary. In buy and hold investments, you can generate additional monthly income, as well as build equity over time.

I know what you’re thinking… “I don’t have the initial money to invest”. That’s ok. There are a lot of creative financing options out there to explore. Private and Hard Money Lenders are there for this specific purpose. Make sure you have a great business plan before looking to secure these loans, but there is no reward without at least some risk right? Another option is to use the IRA you already have to invest in Real Estate as a self-directed.

So say your salary is $70,000/year, and 10% of this goes into your 401K, which appreciates at 9% a year, that’s $630/year. It would take 31.7 years to make $20,000 this way, or ONE good Real Estate investment. You tell me, which sounds like the better option? ;)