Ken Williams' success tips

Why People Should Rent/Invest Savings In Stocks

I had another tip planned for you today until I read an article on my MSN page which totally refocused my thoughts.

It was entitled Why People Should Rent Put your Savings in Stocks Not In a House

In all fairness to the author he provided many thought provoking points of view regarding his claim that renting was a better financial plan for both home owners and investors.

Hey, I am a fair guy, I try to give people the benefit of the doubt, however, I see things totally differently than the author of that article.

Let me preface my response with an acknowledgement of the obvious. I do not have before me a stack of mind boggling statistics going back to 1870 to support my point of view as the pro-stock writer evidently did.

What I do have is real world common sense knowledge and experience in the trenches of real estate investing. I have witnessed first hand how owning houses to be parallel, has improved a family's entire financial future in less than 45 days.

Funny how the author only picked on houses to compare to stocks as investments, no mention of other types of real estate. Hmmmmm?!

So, I will stick with houses. I think I am smart because I know what I do not know. Stocks have never been my thing. Never had the patience to figure out the details enough to bet my money.

My mutual funds and IRA investments are the closest I have come to dipping a toe into the tricky waters of the stock market.

Now houses I know! So does the typical adult in this country. We all have a good idea how renting a house for more than your monthly expenses is supposed to work. It is called cash flow.

I believe you could stop the average Joe on the street and ask which he understood more, the stock market or rental houses.

I would bet my money that rental houses would be far better understood by most than the stock market-all day long.

The premise of the article was that you would be much better off renting an apartment and investing your difference saved in the stock market. The stock market would realize you a better overall gain with no expenses to maintain. I have simplified the point but that is what states.

Well, that sounds a little like the idea behind whole life insurance. Pay a bare bones premium and invest the difference.

Sounds logical, however, how many of us has that discipline required to keep our paws off the difference and NOT run out to buy a new car or other toys?

Not only that, but the research involved with choosing a winning stock is not something most people will find enjoyable. In comparison, choosing a winning neighborhood to buy a cash producing rental property would be far more appealing.

Owning vs renting. I believe most families will be better off owning their home. Renting would leave you vulnerable to the whims of far more arbitrary forces. Owning your home gives you more control over your residential destiny.

Now when I turn my thoughts to comparing stocks and houses as investments, there's no comparison. NONE!

With stocks you are at the mercy of the invisible others who are calling the shots. One bad CEO or management team and there goes your money in his/their severance package. With houses YOU call the shots.

Also, you as my savvy subscriber know you will never purchase a house at retail price as a rental. Your strategy is not as was implied by the article, you are not buying rentals to sit back and wait on appreciation or a good economy.

As real estate investors we create our own appreciation. We buy low, sell high. We do not wait on market conditions to make money. We seek out situations where we can solve someone's real estate problems to be rewarded with a BIG check.

Our approach is totally hands on.

This suits us fine. We do not conform to conventional wisdom. Rather we seek it out to know what to do to the contrary. Call us what you will, Renegades, Mavericks, Wildcatters, or whatever, just do not call us late to settlement. We want our money, NOW!

Nothing makes me cringe more than when I bump into a person who refers to themselves as a real estate investor who buys everything retail and waits for appreciation and/or tax write offs to take care of them.

In my world given the choice between stocks and real estate, there is no competition. Some day I may look into stocks as another passive stream of income. Maybe.

For now I prefer real estate investing as an active and passive investment. I even prefer the two MLMs I am involved in for passive monthly income. At least I can have a hand in what happens day to day. No offense stock investors.

I just had to vent today!

To YOU, my action oriented subscriber, I say remember to always.....

Take Action!

Ken Williams
www.thewholesalewizard.com

PS. Real estate investing offers more hands on opportunities than any stock.