Anonymous
Anonymous asked in Business & FinancePersonal Finance · 1 decade ago

What is the best and safest way to generate long term wealth, stock market or real estate?

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  • 1 decade ago
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    Owning real estate does not generate wealth. The price people are willing to pay does often go up, even for long periods, even more than the rate of inflation. But it is an illusion that real estate always makes you money, after paying tax, insurance, depreciation, maintenance, interest, AND then facing the possibility that your real estate market will subside, or your local area may become out of favour.

    Your real estate may even completely self destruct from perils you are not insured against.

    Now, if your investments in real estate are diverse, widespread, you may be able to tolerate some of the risks in real estate.

    Similarly in the stock market you may survive by diversification. But there have been decades in which stock market investments have done nothing or worse. In decades when the stock market has not fared that well, some have made out well with real estate.

    You are best to build a portfolio of real estate and stocks, and maintain a constant ratio between market values of both. Take money from the sector that is growing fast to invest in the sector that is declining. (As counter intuitive as that may seem.)

  • Anonymous
    4 years ago

    Well I have no idea what quantity of money you have got to make investments. If you may have adequate cash for truly property then I'd opt for truly property first. But why now not each? Investing in the longer term is undoubtedly a definite technique to construct up wealth.

  • 1 decade ago

    I would go with stock market because it is liquid - you can get your hands on the money if need be without waiting to have to sell a house.

  • 1 decade ago

    Stock market by far.

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