Wednesday, 12 October 2016

Real Estate vs Stocks ?

Being in this industry for a couple of years , many people came to me and asked me , " why aren't you investing in property ? , " why don't you get yourself a license to be a property agent ? , " why not getting yourself a house ?" ,  " house is an asset"

Well house is an asset ? To me that's depends on how you see it or view it. However I will discuss this perhaps next round.  Comment if you want to hear my opinion.

Of course living in the Asian country we all grow up in listening to , we should get a property , it's an investment that never goes wrong and never fall.  It will definately gets a return over time. Well to be honest, yes all invest,net will definately gives you a return over time.

The thing is I don't disagree 100% what people say here. Yes property does gives a return and yes it could be very good returns and yes it could be never fall. However , I believe everything draws into a word call preference.

Today I'm gonna discuss about the pros and cons in both classes of assets.


  • It does gives us a sense of ownership especially when it is tangible. We are able to see it feel it touch it and even show it. 
  • We are able to control it as we can always to a checking on tenants , inspect on our property , value on our property , run it. Basically we have control over it. 
  • Leveraging. We all know the power of leveraging is good. We can actually leverage on the bank and that's good because we could purchased it at a lower price and slowly pay back the bank. 
  • It gives a sense of security especially when the market is down because we could use it as an instrument for hedging. 
  • It gives us monthly income if we are renting it out which hence , we are having an additional of side income while doing nothing. 
  • Lesser volatility
However ....
  • It is a cost to use if there are vacant in the property 
  • We are bound by bank debts or loans
  • There are bound to be a cost of maintenance 
  • Handle the necessary maintenance problems 
  • Might not be able to liquidate quickly 
  • Need a bigger capital to kick start 
  • Commitment of time to manage and maintain the property 

  • The ability to reinvest and the ability to gain from dividends in a longer run 
  • Managed by professional , hence save the hassle of monitoring 
  • In a longer run it is proven to be one of the greatest wealth creator in the world
  • Easier to diversified our portfolio because the cost are usually lower or to startup is takes a minimum of RM1000.  Therefore , it is more affortable 
  • It's allows us to take into the account of dollar cost averaging by investing it on a more consistent basis such as monthly , quarterly , semi annually with as low as RM100 per month in order for us to take as rage of the market. 
  • It's also creates a better liquidity as compare to property
However ....
  • Stocks has a higher volatility as compare to property and its usually doesn't see any profit in their short term
  • In stocks we often see a paper lost especially each time after a dividend is paid up encases the share price will reduce. However we are actually gaining in real terms 
  • We can't be able to feel it nor touch it as it is a paper investment
The thing is both asset classes has its own benefits and disadvantages , to me it is just a preference I personally prefer to hold paper investment because it is more in the market and it gives me the return which could be as similar as property investment in the longer run. 

Hope this helps you or if you have anything to add one do comment below. It is always good to share so,e ideas and insights because in investment there's I sing any right or wrong. We all have different experience in different classes of assets. 

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