The debate between investing in property or shares has been heated for some time now, especially as both are designed to create wealth over a long period of time. That said, we may get conflicting answers in the debate over which is the better investment vehicle, but one thing’s for sure, make the right choice, and you may consider yourself wise in terms of your financial experience and decision-making.
The main thing to keep in mind is that both shares and property are good for your financial portfolio. The individual investor needs to make the tough decision between the two and analyse which option is better for their circumstances.
What If I Decide to Invest in Property over Shares?
Investing in a property over shares takes you down the path of debt. While you may not have to make a direct payment into your property each month as you do with shares, you will have to take out a loan to purchase it, which can be paid back over a significant number of years. If you are not in a position of being able to secure a loan, then you will not be able to invest in property, and this could be an issue if you want to earn equity in your home or investment property.
What If I Decide to Invest in Shares over Property?
This may be one of the wisest decisions that you can ever make in the long run. As we have mentioned, both property and shares are aimed at creating wealth, but when it comes to property, you need to wait a long time before you can reap the rewards, which can even be as late as your golden years. For shares, you will not need to wait as long to see the benefits of your investment, as you will start seeing them as soon as your purchase is made.
Shares: If you invest $10,000 in shares and the company turns around and decides to pay out a $5 dividend, you will get $5 for every share you have, which means that you have acquired $500.
Property: If you buy a $500,000 property, then wait ten years until your mortgage is paid off, then you divide the value of the property by what you originally paid for it, and you will see that you have just $50 for every $10,000 that you contributed.
A Viable Decision
The point we are trying to get across is that shares can give you a much higher return, and the sooner you see that return, the better. Even though you may be dealing with an element of risk by investing in shares, it is worth it. The moment you purchase shares and the company does well; you stand to make a lot of money. Many investors have built their wealth on shares, which is one of the main reasons why investing in shares is worth the effort.
It is also worth remembering that shares are not as expensive, and you can buy a lot more shares than you can property, and that is where the real value of investing in shares lies. By purchasing many shares, you have a much higher chance of seeing a return on your investment.
The decision between property and shares is one you need to make yourself, and you need to keep in mind the benefits of both and the drawbacks that may go along with each. While it is tempting to choose property over shares, you have to think carefully about your future and whether or not you will be able to secure a loan with a lender.
By taking out a loan, you will be building a debt, which may not be something you want to do and will only hold you back from making the most of your wealth creation opportunities, thus, making shares a much more viable option by the end.
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