As an investor, I’m constantly looking for a strong, long term investment.
I don’t want to take on a huge amount of risk, or debt, and I want something that is going to provide me with a passive income for life.
Both shares and property have a solid, long term track record in Australian, America and Europe.
I like the idea of both, but I have been attracted to the property since reading Rich Dad, Poor Dad, when I was 23.
For some reason,
Pros of investing in property
– With 70% of Australia’s owning property to live in,
– Australia’s population is expected to exceed 50 million people by 2066, according to the ABS, providing strong future demand for housing.
– Banks can lend up to 90% of the value of a property.
– You can physically see and touch property.
– A quality property can provide strong, long term capital gains, along with strong cash flow.
– A quality property can be an extremely low maintenance investment, with the right team in place.
Cons of investing in property
– You need a large deposit to buy a property.
– Property is a long term commitment.
– You will not get rich quick investing in property.
– It can take months to sell a property.
– There are costs involved with buying, holding and selling a property.
– Property values rise and fall, like any other asset.
That said some of my friends have done really well out of the share market.
Pros of investing in shares
– Shares can provide strong dividends.
– You can pick your shares, based on your personal risk profile.
– You don’t need a huge amount of money to start investing in shares.
– You can sell shares quickly.
Cons of investing in shares
– Share values can fall dramatically.
– A shares value can fall to $0.
– You are reliant on a company and its employees to continue making a dividend.
– Share values fluctuate daily and must be watched carefully.
– Understanding the share market takes time.
– It’s more difficult to get finance for shares.
Property is more suited to people who like are looking for:
– Lower risk
– Long term gains
– Consistent cash flow
– Lower maintenance
As a husband and father of three children, this suits me well.
Shares are more suited to people who are looking for:
– Short term gains
They are also suited to people who don’t have a huge amount of capital and investors who like to be active.
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