The Advantage of Investment Properties

Our stock has earned us only sixty percent of what our real estate earned. The stock could only earn six cents for every dollar, but our real estate made us ten. Now, you tell me which one is better. Our real estate has earned us far more. If our investments made eight percent, our real estate would have earned us an even bigger percentage over our stock. The stock would have earned only forty percent of what the real estate would have. Investing it yet a third time, assuming we earn again an eight percent interest rate, the stock will have only made us thirty five percent of the real estate’s earnings. You see, as the amounts get bigger, the gains from the real estate get bigger and bigger when compared with the stock’s earnings.

Funding Investment Properties with Borrowed Money

Borrowed money is the answer to capitalism, even for stock buyers and entrepreneurs. Many entrepreneurs will bide their time and run their business, making paltry earnings, all so they don’t have to borrow. They figure that they will eventually have the budget to do bigger things. While this is true, this is progressing at a very slow pace. Sure, they get one hundred percent of the earnings that way, and perhaps they’d get as little as twenty five percent if somebody invested a large sum of money into the business. However, because the assets the entrepreneur had to work with were so much bigger, this twenty five percent will be much, much more than the one hundred percent he would have earned if he had only used his own money.