Thursday, August 31, 2023

Investment in Shares long term for capital growth is a good strategy - how does it compare to property?




The above graph shows that investing in shares long term is a good thing - and has been generating 7-10pc per annum since 1993 (for the past 30 years)
So 10k invested in 1993 would generate between 138k and 176k.

So why is property so much better if it only increases by 5pc per annum?

One word !!!!!!


LEVERAGE 

Using other people’s money 💰 💴 - gives you exponential returns….. and it seems so much safer borrowing against bricks and mortar than shares …..

If you put down 20k and borrowed 100k to buy a house - and property doubled every 15 years less than a 5pc return pa)
your return on $20k borrowed would have generated 400k !!!

What am I missing? 

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