Real Estate Investment vs Stock or Gold


In a recent article, there was a discussion about the best investment options for Singaporeans. The debate seemed to take a personal turn, with no definitive answer as to which venture line someone should choose to put their money in. And that is precisely what we are trying to emphasize in this writing today.

When it comes to investing, it all depends on someone's lifestyle, pocketbook, risk tolerance, and the requirements in each venture. Nobody should convince you that the real estate market is more profitable than stock or gold. It is your choice to decide where to put your money and get more returns.

Let's put it straight; many investors would tell how traditionally, the stock market was the primary source of wealth to many people. Many investors inve sted in the stock market, and, undoubtedly, they made excellent cash from the busines.

House Handshake


There was no idea like real estate investment as people only valued their homes. On the other hand, gold was the main line asset in India and was viewed as a wealth store that families could pass to the next generation. It offers and still provides flexibility up to date. Gold investors will tell you that they can buy any gold amount, depending on the amount of money they are willing to invest. For instance, one can get 1 gram, 10 grams, or even 1 kilogram, provided they have enough cash. However, because you deal with one type of investment does not mean you should overlook other options. No. There are also various opportunities that you might be missing by not trying in the next option. For example, many investors valued gold or stock markets more than real estate investment because they had not tried investing in the rental housing market. They didn't know that they could buy a single rental property and have a regular cash flow for the rest of their lives, and enjoy happy retirements. This means that you must get a big picture of the business operations and any drawbacks you are likely to face before investing in any business. We shall look at some of the differentiating features between real estate, stock market, and gold market investing


Real Estate Investment

Effective communication is critical for any real estate business.

Investing in real estate involves buying, selling, managing, renting, and flipping rental property to profit. When investing in real estate, you will profit after deducting all the expenses needed to maintain the property, such as utilities, property tax, and repairs. You are also likely to suffer losses if the building remains vacant without generating any cash, yet you have to pay for its fee as you wait to resell it. However, real estate investment benefits surpass its losses because you are guaranteed steady cash flow and less costly when no or fewer repairs are needed.


Why Invest in Real Estate

Investing in real estate comes with various advantages as outlined below;

  • Size of the market: Real estate industry has a vast market with numerous opportunities for both beginners and experienced investors. Its limited resource, land, has a growing demand over time with new prices, making it suitable for short-term and long-term investment options.
  • Cash flow: The investment has a promising regular passive income earned through rent if you rent it out. This cash can be used to pay off the mortgage without using your money outside the investment.
  • Volatility: The rental housing market is subjected to low volatility as compared to other forms of investments. The market is not affected by market factors such as inflation.
  • Tax benefits: Investors in real estate are said to enjoy low taxes on their property ownership. These benefits include; depreciation, low mortgage rates, building insurance, and reduced cost of maintenance.


Demerits of Real Estate Investment

  • It requires a lump sum of money during cash payment or even down payment due to the market size. This may force you to land in huge mortgages.
  • It requires more time in terms of liquidity. It may take days or months due to much paperwork needed.
  • Sometimes there are no past data available when transacting in real estate.
  • Appreciation is not guaranteed, especially when the property is not well maintained.


Stock Market Investment

Stock market investing involves buying shares from the company. As the value of the shares in the company grows, your stock value also grows. The cost of the dividend is calculated by the board of directors, who watch over the company's management and help allocate profits to the invested shares. The good thing with the stock market is that you can reinvest the money earned through dividends, expanding your business empire

Stock market chart


Why Should You Invest in the Stock Market?

The following are the advantages of stock market investment which can pull you to buy shares from the company;

  • The stock market has a long history of operations, with over a hundred years of proven research. Reinvesting cash dividends is one way of creating wealth.
  • Investing in company shares requires less work since its directors do most of the work. You only benefit from their work.
  • Apart from the increase in the value of the shares yearly, there are regular cash dividends that you stand to benefit. Holding longer on to your stocks and reinvesting the dividends payouts grow your wealth significantly.


Demerits of Investing In Stock Market

  • The stock market is profoundly affected by the emotional factor. If investors happen to be undisciplined or act too irrational to the directors, they may lose the cash dividends and even all the shares.
  • The market is prone to experience short-term volatility. This can work against you if you want to sell your shares in a time of need. The fluctuation in prices of the stocks is exceptionally high.
  • The stocks are likely to be stagnant if you invest in a company with fewer innovations and a slow growth rate.


Gold Investment

Investing in gold is buying and selling of gold coins and jewelry. There are many reasons why investor choose to buy and hold on gold, including;

  • Gold is a store of value. It is ranked as the most precious stone over the decades, and its value appreciates over time.
  • It is not affected by market inflation.
  • They are portable and liquid in value, meaning you can carry it anywhere and sell it at any time without much hustle. This is because they are highly demanded globally.
  • No maintenance costs are needed when dealing with gold coins or gold bullions.


The Bottom Line

Although the article might not be comprehensive enough to help you choose which investment to start with, it demands you to make a sound choice when dealing with money. Every investment has its drawbacks that you must learn about before putting your cash in. Most importantly, stick what venture works in favor of your financial capabilities. Do you need to learn more about investment? Check this site;