Most of us dream of making it big and becoming rich; if not that, then at least being secure financially in life. So many of us think of making an investment; but what is an investment? It is that amount of money that an investor places with an expectation of profit. There are two more popular types of investment: real estate and stocks. Let’s take a look these types of investments.
Stocks have the potential of making you very rich. The richest men in the world have gotten their fortune through stocks. Buying stock is buying ownership in a company. So you end up owning a part of the company. When buying stocks, you should try to find undervalued stocks. It may also take years, ten to twenty, for your money to grow. It will also be necessary for you to hold on to stocks for a long period of time, hoping that the company will make it big and thus making your stock more valuable.
There are some disadvantages in getting stocks. One is lack of control, and the other is lack of financing. Although you may be part owner of the company, you may not have enough stocks to gain control of that company; thus, you are at the mercy of the directors that run that company. Also, it would be very hard to find a creditor to lend you money for you to be able to buy more stocks and gain you of the company. Find companies that have impeccable records, both in the performance of the company and the people who run the company, as you would not want to be a part of a financial meltdown. You may want to look into investing in ETFs (Exchange-Traded Funds) – like the gold or silver ETF. These are great funds for less experienced investors to invest in when you want to get into a sector, but not a specific company.
Buying real estate also has the potential of making you really rich. Try to find properties that are undervalued or those that are in need of repairs. This is especially true if you are one who can make those repairs. When you have repaired the properties, all you have to wait for is for someone to rent or you can sell it at a higher price.
For the average Joe, the advantages of investing in real estate are clear. You have more control over the investment. There is a faster rate of return when you do all things well. This is especially true if you have a good mortgage provider. When renting out, you will be paying your mortgage from the rent and the house will become yours without you dishing out any money. Although it is true that stock can sometimes appreciate faster than a real estate investment; for the average person investing in real estate is the way to go.
Whatever your financial planning goals are – you always have lots of options for investing your money in either real estate or the stock market – just make sure you plan well and do it wisely. You’ll be sure to come out ahead.