I was recently in a debate about which
investment vehicle is the best one to invest in. More specifically I
made the comment that real estate is the "fastest" way for people to
become wealthy. I said this because no bank will ever give you a loan
to buy stocks, however they will gladly give you a loan to buy a
property. This key difference is why you are able to make money faster
through real estate, you are leveraging the bank's money to get more
valuable assets. Buying stocks overtime will make you wealthy but
buying a valuable property at a low price gives you instant equity.
There
are ways of building your wealth through dollar cost averaging and
buying stocks over time, but real estate in my opinion is the fastest
way to wealth. There is one caveat here, buying stock options might be a
faster way to gaining wealth. I however don't recommend everyone buy
options and try to build wealth that way. There is more risk in buying
options because you are not buying the underlying asset. You are buying
an opportunity to buy something. You can however leverage your money
in a greater way through options trading which will generate larger
amounts faster. That said I do not think the everyone should use this
as a vehicle. I think if you are dedicated to learning about it and
doing the research then by all means see if you can master it, but it
takes skill and a lot of research.
In
essence buying properties at a discount, fixing them up to gain equity
and renting them out, is a great way to build wealth quickly, and if you
supplement it with buying dividend paying stocks using dollar cost
averaging then you are well on your way to financial freedom.
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