Real estate versus other investments.
I recently finished reading Flash Boys by Michael Lewis. It is a great book that truly exemplifies the limited control that we have over the stock market.
In the book, Lewis explains that the general public does not fully understand the inner workings of the stock market world. Additionally, he mentions that many of the big banks and fund managers face the same situation.
The worst part is that these fund managers are charging us hefty fees to manage our accounts. But at the same time, they are constantly getting hit by the faster, high-frequency traders, and losing out at our expense.
This takes us to investing in real estate. This seems to be the only real way for someone to build retirement income that they can count on.
I have been involved in multiple real estate transactions throughout my 11 years as a real estate broker. During this period, there have been numerous increases to average sale prices. This indicates that people who actively purchased properties were able to turn profits, as long as they bought at the right price, properly managed the property and made their loan and tax payments on time.
But we must also remember that market conditions are always changing, and as a result, it is often difficult to predict price performance. Prices may still decrease as interest rates increase. Regardless of this, when we own real estate that has equity in it (i.e., it is not leveraged aggressively) we are ahead and can continue collecting rent and generating cash flow each month. There are very few investment classes that are capable of doing so.