A guy sent me an email last month stating that he had been reading my blog for several weeks and he wanted to meet with me to get more details. So I sent him our Free Education Kit for him to look over.
Later we sat down at a local McDonald’s and he asked me, “why would I do real estate with you instead of investing in the stock market because I can get 10 to 12 percent investing in the stock market?” I replied, “because you can get a higher return in real estate than the stock market and the expenses in passively investing in real estate is far less.
So when someone says to me, “hey Will Cunningham I can get 10% to 12% in the stock market”. Yea, that’s awesome, but I remind them that they are also going to have a 1% expense ratio. And this 1% expense ratio is paid to the fund manager who is managing the mutual fund.
So if you get a 10% return in a mutual fund, your actual net return after expenses is only 8.91% plus you are going to have to pay a commission fee.
So if you had a $500,000 investment in a mutual fund you’d pay a 2% commission which is $10,000. So if in the 1st year, if you had a 0%return on your investment within that mutual fund, you wouldn’t actually be still at break even. You would have a $500,000 investment but because of the commissions and expenses you would be at $484,000.
So you would actually be significantly negative by investing in the stock market.
—– If you are reading my blog for the first time, let me inform you that: I am a guy that buys single-family houses and I write this blog weekly which is primarily directed to educate 1 group of individuals:
- Individuals who are losing their shirt as well as their hair as a result of the “roller coaster” volatility of the stock market and that are looking for an opportunity that’ll provide a secured place to put their money to get it working for them to earn better than average returns.
However, often times, homeowners that need to sell their house, stop by to take a peek because they are curious and wondering how and/or where I get the funding to purchase houses. And if they stick around long enough, they begin to understand why individuals partner with me and provide the funding which empowers me to be able to purchase single-family homes on a continual basis.
Request your FREE Education Kit if you are interested in learning how passively investing in real estate may help place you in a better financial position.[spacer height=”20px”]
Disclaimer: This site is intended for educational purposes only. I am not an accountant, attorney or licensed financial planner. While the information I’m writing here is based on many years of experience buying houses that doesn’t really constitute professional advice (since everyone’s experiences and situations are different).