Real Estate and Creating Wealth

It’s much easier to talk about making a million dollars than doing it. Many of my clients have made their money in real estate. Some admit they got lucky in stocks. For a lot of good folks 2000 and early 2001 was the year to become an investor in stocks, and pile up massive capital gains in hot new tech companies. And then, the market tanked, and millions took huge losses very quickly. One estimate is that over $4 trillion dollars was lost. There was a lot of damage to retirement accounts, much of which has never been fully published.

Having been a Real Estate Attorney (retired now) and currently a full time Realtor, I have been a strong advocate of investing in real estate since around 1976. During my law practice years in the 90’s to best serve my clients, I expanded my legal services to include estate planning, and to raise my competence, I became a Registered Investment Advisor and Certified Estate Planner. I spent a small fortune on specialized education and training.

I also traded stocks extensively with my personal portfolio, including short to long term, and conservative to risky, traditional Dow stocks and NASDAQ stocks. I day-traded stocks including IPOs (initial public offerings), and . . . yes, I day-traded the riskiest NASDAQ options. Wow! Talk about a rush! Fast profits! Fast losses! I didn’t need drugs.

Riding the crests of the market and surviving the valleys has clearly demonstrated the value of one of the oldest investment principles around: diversify your investments. I’ll take that principle one step further.

1. Diversify your investments.
2. Make real estate your primary investment.

There are many other important investment principles and practices, but my emphasis here is that real estate is, and always has been, one of the safest and best long term investments in history. It doesn’t evaporate when the economy slides into a recession. It doesn’t lose its usefullness because international money markets are in a state of chaos. You’ll always have something you can walk on and “appreciate.” Tech stocks can appreciate incredibly, and part of your portfolio should be there, but as we all know, tech stocks can drop from $88 per share to nothing as did E-Toys back in 2001.

Retirement planning is more difficult today than it has ever been for many reasons. Keep doing what you do well and get good advice on your investments. Diversify but make real estate your primary investment. Even real estate markets rise, plateau, and sometimes even decline, but over the long run, real estate is the best investment you can make in my opinion.

Last Updated on September 1, 2019 by Chuck Marunde