The dilemma of investment choice: real estate, purse or business own
Often in my activity they ask me what it is that it is necessary to invest, whether in real estate, in the purse or in the business itself.I always say that if you go to a realtor you'll be told to put everything in real estate. Instead, a scholarship agent will tell you that investing everything in the bag and an entrepreneur will tell you 100% in the business itself.
So, what do we do?
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Why choose?
Looking to be targeted, I always like to talk about the law of the thirds.What do I mean?
There is a law which advises to place one third of its capital in real estate, one third in the stock exchange and another third in the own business.
But to do this, it is important to understand what each asset brings to your wallet.
Let's start with Real estate. Here I clarify that I am talking about buying a property with the goal of getting rents for your rental. I'm not talking about managing an Airbnb temporary rent business or buying a land to then build a property looking to get a profit on your sale. In such cases, it is not about investing in real estate, but of investments of the third category, the business itself, because it is, in reality, a new enterprise that involves greater risks and that you should manage to succeed.
For example, if you want to have a temporary rental property, you need to search for new tenants all the time, manage the check in and check out of each host, the cleaning and maintenance, the services are working and the equipment is in good condition. All this implies time and costs, someone has to take care of it, in addition to taking risks for possible deterioration or that the property is empty for a while.
Clearly, it’s a new business so if you’re thinking about the retirement stage would be like starting a new career and not for anyone looking for a quiet retreat.
Now if you buy a property to collect rents in the traditional way, we would be talking about an investor who seeks to protect the capital passively. Although the real estate has had important descents of its price in dollars and the profitability is very low, about 2%, it can be an option for part of the capital of those who are in the last stage of their life.
Now, starting with this kind of investment when you are still young can greatly harm your heritage. Why do I tell you this?
The bag, a powerful multiplier for your investments
Within the options for your investments, the bag The average term can be considered: with much greater performance potential than that of real estate, but lower than that of the business itself.Let me show you with an example.
We suggest a person who has $100,000 and can choose to invest in a property or in the stock exchange.
If we consider investing in the S&P 500 index that nucleates the 500 largest companies in the United States, we can estimate a 9% annual income, the historical average of the last 100 years. We are talking about Apple, Coca-Cola, Microsoft and Mc Donald’s.
This person who had started with $100,000 would have $19,000 a year investing in the scholarship versus $10,000 estimated with a property. Doesn't look like a big difference.
But if we look at a longer term, the panorama is quite different. Below, I showed the final capital if you had invested in real estate versus S&P 500 in different time frames:
Note that the difference at 5 years is already notorious, having more than 40 thousand additional dollars investing in purse. Not to mention at 20, we're talking about a projection of the triple capital. And at the age of 30, a very relevant time horizon for those who think about the withdrawal, with the property would not have doubled the capital, while with the purse it exceeded the million dollars with growth.
The best of all is that one can access to invest in this type of companies in weights through the Cedears, since Argentina. Of course I'm not telling you to run out to buy Cedears. It is an investment that has volatility and it is fundamental to do so in a diverse way. Inform and count on professional advice You can help you enjoy the advantages of the bag for your wallet.
Captain of your own ship
The last option would be own business. This option that has the greatest potential for its heritage, but is also the one that has the greatest risks. With your own venture you can lose all your capital or even more if you have taken debts. In other investments it is very difficult for your capital to go to zero if you advise yourself properly. But this is a very real risk for an entrepreneur.The data demonstrate that the world's largest fortunes were made through the creation of a company. It's the Mark Zuckerberg, the Jeff Bezos and Bill Gates we all know. But also many were on the way. That's why I don't advise putting all your capital in this option, no matter how faith you have your business idea.
A patient investor sets his way by leveraging all options within his reach and intelligently diversifying.
The wisdom of the law of the thirds gives us important teachings for our finances.
Matías DagheroPresident Closing Bell AdvisorsAgent Global Investment Advisor CNV Matrícula 1.117
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