All-Out Battle for Best Investment Opportunities
Real Estate vs. Precious Metals
Typically when people talk about investing in precious metals they mean buying and selling gold, silver, and/or platinum. These metals are traded on the commodities market. You can either, physically buy precious metals and store them somewhere for safe keeping, or you can buy them as Exchange Traded Funds (ETF). This essentially means you would buy them as a stock whose price is tied to the current value of that metal.
There are certainly some advantages to investing in precious metals. As it’s not readily available everywhere in the work, it’s a limited commodity which adds to its value. As stated above, you can also physically own a piece of a precious metal. You can’t say the same for paper stocks and bonds.
On the flip side, as investment opportunities, precious metals can be volatile. This means they can be higher risk. They can be balanced out though with other more stable investments. If your portfolio is diversified and made up of several asset classes, then precious metals might be something you want to include in your portfolio.
But don’t be so quick to sink you hard earned money into these assets, when you see what investment opportunities exist in real estate.
6 Key Reasons Why Real Estate Investment Opportunities Could Make Precious Metals Throw in the Towel.
1. Unlike with real estate investing, there is no financing component with precious metals. Hence it precludes you from benefiting from building wealth with leverage.
2. Precious metals like, gold silver and platinum is for all intents and purposes, money. As they are equivalent to paper currency, they are susceptible to the drawbacks of money/currency.
3. Unlike with rental real estate, with precious metals there is no easy way to produce cash flow income. Once you invest in these metallic commodities and the investment is completed, the profit you make is static. This means to make more money you need to buy more. Then the price you once had may no longer be as desirable. With buy and hold rental properties, investors receive passive cash flow that can last for years. Also, they will also receive additional profits upon the sale of the property that could be tax-free if set up properly. An investment that provides an income stream is certainly a great way to build wealth. It can get you that much closer to financial freedom. Using velocity of money, you can continually use that same down payment to purchase multiple properties.
4. Investing in precious metals does not provide the amazing tax advantages of rental properties. i.e. 1031 exchanges and depreciation. Profits on precious metals is taxable whereas real estate can be bought and sold tax-free using permanent tax deferral techniques.
5. If the value of precious metals increases it’s typically because it corresponds with the devaluation of the dollar. With real estate, even if the dollar devalues, the value of your rental property can be appreciated with inflation and/or forced appreciated . This puts more money into real estate investors pockets.
6. Precious metals, due to their liquidity can be bought and sold quickly which translates to a more volatile investment. On the contrary real estate is more illiquid. This lack of liquidity helps make real estate a more stable and an appreciating asset.
As shown real estate investing has many advantages over other investment opportunities like precious metals. The ability to receive passive income and its tax benefits makes it a favorite option for many investors.
We here at Simple Acquisitions are not accountants nor do we give investing advise. Before making any investment decisions it’s wise to consult your investment specialists. We can’t think of better investment opportunities than with real estate.
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