Why it is easier to become rich from property and not stocks? (4)

Read? Why it is easier to become rich from property and not stocks? (3)

Why he doesn't like stocks but love properties?

He was badly burnt by stocks in 1987 Oct Stock Market crash.

In finance, Black Monday refers to Monday October 19, 1987, when stock markets around the world crashed, shedding a huge value in a very short time. The crash began in Hong Kong and spread west to Europe, hitting the United States after other markets had already declined by a significant margin. The Dow Jones Industrial Average (DJIA) dropped by 508 points to 1738.74 (22.61%).^[

By the end of October, stock markets in Hong Kong had fallen 45.5%, Australia 41.8%, Spain 31%, the United Kingdom 26.45%, the United States 22.68%, and Canada 22.5%. New Zealand's market was hit especially hard, falling about 60% from its 1987 peak, and taking several years to recover.

He sweared never to touch stocks again and switched to properties. He currently owned two fully paid properties for rental income and for his retirement cash flow. He said that he is unlikely to sell his properties for capital gains unless he is forced to do that.

Why he loves properties?

1. You don't have to really worry about property cycles whether it is up or down when you are earning more than enough to pay for your home mortgages.
2. Your tenants are also helping you to pay part of your mortgages.
3. After XX years, you are sure that the properties will become yours. You are absolute owner!!!
4. But, for stocks, they belong to the stock market; you can never be sure even after XX years are these stocks still yours???

The Moral of Story

When investing in properties, eventually one day the properties are yours; but it is not sure for stocks. Are they still yours?


Uncle8888's Thought on his story of investing in properties and not stocks

If your investing goal is for passive income stream during retirement, this investing strategy can be thought of a long-term saving target that has been set and then you saved towards that saving target via paying mortgages. That property can also serve as contingency fund in the later years.

It is like putting your life time saving into properties instead of banks and your tenants are helping you to save even more. In this case, property market cycle is irrelevant and you can sleep peacefully at nights.