Real Estate vs Stock Market - round 1!

19 Dec 2023 · 2 min

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2:01

In this brief, informal segment titled "Drew 2," Andrew Postell (NMLS# 392627) contrasts investing in the stock market with investing in real estate. He explains his personal target of a 7% annual return for stocks, noting that such a rate would double money every seven years and could grow $10,000 to $160,000 over 35 years without additional contributions. He highlights the limitation that most people start investing too late, resulting in an average retirement nest egg of about $90,000—insufficient for comfortable retirement. Postell then shifts to real estate, arguing that even if a property's market value declines to zero, the physical asset still exists, unlike a stock that can become worthless. He cites data showing the average homeowner’s net worth (~$250,000) vastly exceeds that of the average renter (~$6,300), emphasizing homeownership as a wealth‑building tool that bridges the gap between long‑term financial goals and present capability. The segment concludes with a personal sign‑off.

Chapters

Hey now, Drew 2 time. Happy holidays. Certainly hope your holiday season is going very fine. We are going to have a comparison today of real estate versus the stock market. It's the new monster movie. So, Drew 2, 2 minutes or less. Let's hit some concepts here. Whenever I invest in stocks, my goal is 7% rate of return. Why 7%? Because if I have a 7% rate of return, that means every 7 years, My money doubles. So I can start with 10 grand and turn it into $160,000 with a 7% rate of return. It would take me 35 years to get there. And that's if I don't contribute anything else to it. So if you do invest in stocks, you would contribute over the years. But just know that 7% is your rate of return. Matching 401s help us. The drawback to this, most people don't start young enough Doing it takes you 35 years to get there. The average person of retirement age— I don't mean millionaires and billionaires, they're different— average person has $90,000 when they retire. You're not going to make it with $90,000, which is where real estate comes in. All right, so real estate. I want you to understand, when even if my value goes to zero with real estate, I still have real estate. It's never gone to zero. If my stock goes to zero I'm out. But the other piece of it, the average homeowner right now is worth $250,000. The average renter is only worth $6,300. That's a huge difference. Homeownership bridges the gap between the long-term plan and what you can do because homeownership is so hard and houses are rare. If you rent, you make me money. I don't mind it, and I rented many years. But if you own, now you're investing in yourself. Hope this makes sense how I'm describing it. I'm Andrew Postell. Thanks for watching today's Drew 2.