Invest in a house before you invest in a stock

Before buying stocks, you should ask yourself a very important question first: Do I own a house or apartment?

Investing in an own house is never a bad idea and you do not have to be a pro to buy a good one. It is the one good investment that almost everybody manages to make and should make. Millions of real estate amateurs have invested brilliantly in their houses and so can you.

A house is an investment just like a stock, but there are some heavy differences. An obvious one is, that a house usually does not go bankrupt or brings you big loses like stocks. OK, a house can burn down, but what are insurances for? In real estate there are no daily fluctuations like in the stock market, so you will usually not wake up one day and face a decline of 20%. And even if it happens, you still have that nice roof over your head, right?
Another advantage (I assume) is that you always lived in a house or apartment, so you know what you want, what it should be like and certainly know when something is wrong. But most of all, it is a big decision and you have to plan the investment first. Amateur investors tend to buy a stock after considering it just for a few minutes. Big mistake. You surely will not buy a house unless you know everything about it, especially if your money is limited. You also can not sell your house as fast as you can sell stocks.

Of course, you need money first to buy a house. Again, buy a house first, after that buy stocks. Do not live on rent. After 10 years living on rent you have nothing. Nada. Instead save your money, move to a cheap apartment and try to buy a house as soon as you can. The banks let you acquire it for 20% and give you the wonderful power of leverage. Just assume the value of your house increases by 5% a year. This means, you are making a 25% return on your down payment, just think about it for a while. And do also not forget the taxes, I am not an expert, but you can surely save taxes too.

Finally, you can make a nice profit by buying and selling houses over your life. You usually start with a small house or apartment and pay it off. This will take some time and when it is payed off, you sell it and by the profit you can afford a new, bigger house. If you have the money, you do not sell the first house and make profit by renting it. This generates passive income to pay of your second real estate. Than eventually you buy your third real estate, a big house for your family and the children, for example. After 20 years, the children move out and the house is to big for you, so you sell it once again and buy yourself a house on the beach and enjoy your retirement. Isn’t that a wonderful scenario? It is!