It has become imperative in modern times to invest a part of your income to secure your financial future. In today’s market, they exist so many different alternatives of investment vehicles, from businesses to cryptocurrencies to Startups to commodities to crowdfunding etc.

However, Real estate and the stock market tend to be among the most popular investment vehicles worldwide, that have not necessarily changed with the trends over a long time.

There is still been major debates between the two, how can one choose one over the other?

We wrote this to spread some awareness on, what could be a better option for you, depending on the different scenarios.

  1. In a market crash scenario 

If safety and security of your money is your biggest concern, it is always vital to understand your exit strategy before you enter the market.

Stock markets can be volatile at times and not just in the market crashes. One can see their investment in the shares of a company drastically reduce in value which always yields to mostly 2 choices, sell or hold. Holding sometimes can mean losing half or all your investment in the short term without any form of fall back.

Real estate, on the other hand, has traditionally been a terrific inflation hedge that does protect against losses in the purchasing power. In case of a crash on the real estate market, one will not be necessarily forced to sell at a low; most especially if one is rewarded with rent each month by the tenant regardless market dips.

  1. In terms of returns

Returns are what all investors look at when choosing an investment vehicle, but, these have to be redefined accordingly to short term or long term.

In the stock market, individual stocks and good analytical skills can get you quite far in the short term and it is all possible with small amount of money One can expect returns in excess of 15% in trading Stocks, but one wrong move can dry you out completely.  In mutual funds stocks, one can always follow Warren Buffett principles and earn up to 8 % which would suffice over compounding.

Real Estate returns on Investment, can be judged over a specific period of time. Depending on the strategy, the returns can be different as well. For example, one can choose multi-tenant over single tenant or serviced Accommodation over traditional rentals or flipping properties. Leveraging capital is a big game changer. Real Estate is one of a few investments a bank can finance for you up to 85% which has not changed over the years. With this kind of leverage, one is the position to achieve Infinite returns. (This is when you no longer have any of your money invested in a property, but you still own it and the property is still generating income) which is a dream for many investors because this relieves money for the next investment.

  1. In terms of pension money

As we have always got to learn that government retirement schemes are not always reliable, a need for one to plan further ahead is always advised.

The power of compounding in both investment vehicles makes life itself magical if done right over time. 

One can be paid in dividends from their stock portfolio over time which can be worth living on depending on the stock value and how long they have been investing.

One can also pocket rental income from the property real estate as your monthly pension after retirement


In conclusion

Both, Investment vehicles do have advantages and disadvantages over each other and the right informed knowledge can be a key determining factor on choosing the vehicle, also dependant upon one’s circumstances and goals.

However, we do believe Real Estate supersedes the stock market by far when it comes to options and returns over the long run, especially with what, one can do with leveraged capital that the stock market cannot offer.

Real Estate is the only vehicle where banks can over you 60-85 % of the capital as security which should say a lot.

If you would like to know more about leveraging capital and understand more on Real Estate strategies please feel free to subscribe to our newsletter or contact us. We do offer free consultation from time to time.