Deciding whether to invest in stocks or real estate requires being honest about your risk tolerance and lifestyle preferences. Both investment strategies have their advantages and disadvantages, so it really comes down to your financial goals and budget.
Investing in real estate means you acquire a physical piece of property. Regardless of the type of real estate investment you make, most investors make returns on monthly rental income and/or when they sell the property on account of it being an appreciating asset.
On the other hand, when you buy shares of stock, you purchase a piece of a company. As the company’s value grows, your stock value also grows. You can also receive income in the form of dividends on your shares if you hold onto your stocks over time.
To buy stocks, you will have to go through a broker, or an entity authorized to buy stocks. You can use a brokerage firm, individual broker, and even online platforms or robo-advisors to learn how to invest money in stocks.
There are numerous ways to invest in real estate, from long-term and short-term rental properties to fixer uppers and house hacking.
Understanding your budget, finding the right lender and knowing the amount of work you want to put into your investment ahead of time will help tremendously.