SHARES VS PROPERTY
People can be infatuated with the idea of owning property, whether it is an investment property or their very own home. And who could blame them? It is the great Australian dream!
Print media bombard us with information surrounding the benefits investment properties hold, stories of someone selling their house for double its original price, and of couples living off the rental payment of their investment properties.
I can certainly see the appeal of the bricks and mortar owned by you that you can do what you want with. By no means am I one to dismiss property as a good investment vehicle, but shouldn’t we be putting our hard earned money towards things that will make it go the furthest?
Property is an investment that people know and understand, but a lack of knowledge shouldn’t be an excuse to not explore what else is out there.
Putting your hard earned money into the share market could result in a sleepless night for many, with questions plaguing their minds like ‘What if the value of my shares drops?’ or ‘What if the stock market crashes?’ I can promise you one thing, those things will happen. However, contrary to popular belief, for those trying to accumulate their wealth, this is great news! Shares are on SALE, meaning this is the best time to buy good quality shares at a cheaper price. Just like property, shares are a long term investment, if you can get through the hard times; you have the possibility to reap the rewards on the other side.
Now to the tax breaks! As the Barefoot Investor would say, ‘Negative gearing is essentially just the socially acceptable way of saying I’m losing money’. Yes, you may get a hefty tax return back at the end of the financial year but you still had to spend one dollar to save, at the very most, 49 cents.
I understand having easy access to your money is important. It is to me as well. If I need to upgrade the car, I can’t sell off that additional bathroom to do it, but with easy access to sell my shares – hello new car!
It can be easy to become clouded by the warm and fuzzy feeling of that 3 bedroom weatherboard with a view, but do the numbers really stack up? Be smart about investing. Get advice to do the numbers.