Mike Andes explains how real estate's illiquidity works in your favor. You can't panic-sell a house when markets drop, so you hold through downturns and build wealth. Liquid assets like stocks tempt you to cash out when headlines scare you.
The one thing I like about real estate when it comes to excess cash is so many of times when it comes to investing, it is simply time in the market, like Warren Buffett always says. And the thing about selling real estate, it doesn't— it's not fast. Whereas I see so many people being so responsive to something happening in the market and they're selling at the bottom. They get emotional with selling in and out of index funds. And you and I are thinking like, hey, that money's there. It's just forever. It's there for years. Whereas a lot of people, it's like, I pull the money out when I get afraid. I see the headlines, I pull the money out, and, or I stock trade. And that's where I see as not only a distraction, but also sometimes the ability to have real estate just where it's not as easily liquid is sometimes actually the reason why real estate becomes the huge part of someone's net worth.
