Dividend Investing in 2018 vs Real Estate Investing in 2018
Application form to apply & try and get in my Private Stock Group/Financial Fortress
Today we discuss real estate investing in 2018 vs dividend investing in 2018! Dividend investing is an option many people love for building wealth through the stock market. Others love real estate investing and building wealth through real estate. This video will help you understand which option is best for you!
Want to join our free STOCKHUB discord chat? Here is the link
This is where you can chat for free with other investors in the stock market about individual stocks or things going on in the market. Enjoy!
*My Instagram is : FinancialEducationJeremy
This is a Jeremy Lefebvre Production
Created by Jeremy Lefebvre
Dividend investing in 2018 versus real estate investing in 2018. I’m gonna break this down for you guys here today. So you can kind of figure out is dividend investing more or the way you want to go as far as dividend investing in stocks.
Or is it actually real estate investing, okay, because these two things, a lot of them have the same fundamentals to them as far as why somebody wants to invest strictly in dividend stocks and why somebody would want to invest in real estate properties, guys.
So we’re gonna break this down, kind of give you the pros and cons of each. And toward the end of the video, I’m going to tell you a way that you can actually do both at the same time guys.
I’m gonna tell you how to do both at the same time. It’s a beautiful thing. So let’s really break this down. We’ll have real estate on this side, okay. And we’re going to have on dividend stocks on this side, which if you guys know me, and you know, my investing style.
I actually don’t even care about dividend stocks, okay, now, some of the stocks I buy, sometimes they do have dividends and they pay dividends. And that’s great free money to me given out okay, but I mainly invest in companies.
Because I believe they’re going to go up over time, they’re going to become more and more valuable, which are going to push their share price up. So I’m not really a dividend investor, although some of the stocks I own do pay dividends, okay.
And as far as me as a real estate investor, I don’t really invest in real estate yet. I think I’ll get to a point where eventually I want to invest in real estate, but because, you know, I’m stock market oriented, yeah, it’s the field I understand the best and if anything, and because I think the you know.
The stocks are going to give me much bigger gains in real estate over time that I lean, obviously more towards stocks, but as I get older, I can definitely see myself owning several investment properties as time goes on. Okay.
So I’m definitely pro for both of them. Okay, dividend stocks. And by the way, as I get older, I’ll probably own more and more dividend stocks than stocks that are more growth stocks. Okay.
So that’s kind of that there. Now, somebody wants to own these because they want payments, okay, they want to receive money, okay. So somebody buys a home, okay, or condo or whatever they buy that they, you know, if it’s real estate investing.
They buy that property in hopes that you know, it should go up in value over time, okay, the value should go up also. Okay, so there’s definitely hope that like, no one buys a home, or condo or whatever, is like, Oh, this is my go down in value, they believe it’s gonna go up in value.
But they want those monthly payments, okay, they want those monthly payments, every single month, every single month, they’re going to receive rent checks, generally speaking, okay, that’s what they’re trying to do.
They’re trying to rent that property off to somebody else. And hopefully, over time, that’s going to become more and more valuable. So they buy a home for $200,000, right? And over the next two, you know, 10 years, maybe it goes up to 300,000 or 350,000.
All right, and then on top of that, they collected a ton of rent payments over that time. So they made a lot of money, okay, now dividend stocks, it’s somewhat similar they’re in it for the payments Okay, somebody if they’re strictly a dividend investment investor.
They want it they want those payments. Now the difference is dividend stocks generally pay out every three months okay? They generally pay out every three months versus you know, if you have a renter, someone rent out your place.
You’re generally going to get checks every month, this is every three months okay? And generally speaking, like a dividend investor, still they want their you know, stocks to become more valuable over time they want those shares.
They buy, you know, shares in let’s say Caterpillar because they want the dividend Caterpillar stock pays, right, which is a big industrial company that makes huge machines, you guys know about them, they’re gonna want that stock tolls to go up over time.
They don’t want that stock to go down because they cancel out the dividend. Okay? So they both want these payments, that’s what they value and they also want the things to increase in price over time. All right.
Now with differences when the payments are paid out, okay? So more differences, okay. Is this one is a little bit hard to get rid of, Okay, let’s just say hard to get rid of Okay, it’s not that easy to just go out and sell a home or condo in a day All right.
That’s not the easiest thing unless you’re selling it for you know, basement bargain prices that like everybody you know, often sees on MLS and like, Oh, we got to go buy this house right now.
Like unless you sell for some silly price is not the easiest thing to get rid of most homes, a home that would move fast would be considered a home that sells within a few weeks of being listed. Okay. Any real drought there will say you know.
If a home sells fast, that means it sells within the first few weeks of it being on the market. Generally, a lot of homes sit on the market for a few months, okay, some unfortunately sit on for a few years and they become super stale, and they’re on there forever. Okay.
But generally speaking, you know, a wonder let’s say for months if you were in a decent market is when your home should move. If it’s really a hot market and you know your home’s price, right? You got the right realtor, maybe it moves within a few weeks. Okay.
But still, that’s technically somewhat hard to get rid of. Whereas this, you can you can move get rid of a dividend stock in a minute. Literally, you can get rid of the dividend stock in a minute, okay. You will.
I don’t care how much you own unless you own like we’re talking hundreds of billions of dollars worth of stock in a company or 10s of billions. Maybe then it becomes to you know, hard to get rid of it.
But for an average person that might own $100,000 of Apple stock, or a few million dollars worth of Apple stock to sell out, you could literally do that in a few minutes time like that simple. Okay, so that’s kind of a good thing about dividend stocks is is you you don’t like something with that particular stock you own.
you can get out of it immediately. Okay? Whereas real estate, you’re going to likely have to get rid of it. Unless, once again, you want to sell it at some ridiculous price that everybody just starts like freaking out, and they’re like.
Oh, we got to buy this house as soon as possible. Okay. So that’s definitely a difference there. However, generally speaking, real estate is not as volatile. Okay, not as volatile. as, you know, stocks, let’s just put it that way.
That’s pretty simple, not as volatile as stocks, whereas this one is, you know, dividend stocks are less volatile than growth stocks, but they’re still end, they’re still volatile. And, and, okay, there’s still a valid title, okay, they still move around a lot.
So a stock, even if it’s a dividend stock, it might move 510 15% in a day, like literally, if they report earnings, that stock can move 510 15% up, even if it’s a big dividend stock in a day, okay, so very possible. In 5%, for sure, like.
Tons of dividend paying companies will move at least 5% in a given day, like that’s nothing a real estate investment property in terms of value, to move 510 15% in a day, is super unrealistic.
Like it’s ridiculous for you know, a home, let’s say it’s, you know, 300,001 day to also go down to 270, the next day, or 280, like so on realistic, it’s not even funny, guys, it’s so unrealistic.
Now, real estate properties can obviously fall we saw in 2007 2008 2009, obviously, especially within the state, I live in Las Vegas, like this was one of the hardest hit states, it’s not the hardest hit state out there.
We saw prices, you know, go from, you know, a home, that was $40,000 Olsen’s worth 160,002 years later and a two year timeframe. So it definitely can be volatile. But that was an extraordinary circumstance there.
Generally speaking, like real estate properties are not going to be nearly as volatile as this over here. Now on the flip side over here is, um, I would say generally, you have less work, okay, in dividend stocks doesn’t mean there’s no work involved with dividend stocks.
You still need to do your research, you still need to get on your computer, your iPad, or your phone or whatever, do all the research, listen to conference calls, read 10, Kay’s read 10 Q’s, figure out that company, you know, study that company really well, you still got to put in work.
But it’s less work than over here in real estate, where you got real work over here, okay? Like after your your renter moves out, unless their renter was the perfect renter, the perfect person that was renting that house, right.
You’re gonna probably have to put new pain, get the carpets professionally cleaned, do this, do that, you know, maybe there’s something wrong with the tile over here, maybe something happened, the kitchen and appliance broke and run that you got to manage all that over time each month.
As you know, light bulbs go out or whatever, you know, and next thing, you know, your vendors calling you Hey, this one out, oh, that fan over there without our AC unit just went out. Those are expenses, which, you know, hopefully, you’re still making way more money than the expenses are worth.
But it is something to keep in mind. And that is a lot of work in the end, okay, it adds up to a lot of work, not just when the person actually moves out. Right. But also like, like, like, all the time, like, there’s always something going wrong with properties, especially if you own older properties.
Sometimes if you own a newer property, that’s one of the good things is you’re gonna have less things go wrong if those AC and heating units are, you know, two or three, four or five years old, they’re the chances are going to break.
The ovens gonna break or the fridge is gonna break when they’re there, you know, within the first 510 years, very, very low. However, when those appliances start getting older, all those things around the home start getting older, you’re going to have more and more issues, and there’s going to be more and more work.
Now something else I want to tell you guys here is because these are payments, okay? Does not mean they are guaranteed payments, okay? And that’s in the case of dividend stocks in that it’s also in the case of real estate properties insert as far as real estate investing properties, okay.
Nothing is guaranteed. When you own a real estate investment property, right? You have somebody renting it out, okay, that person leaves. Now you need to get somebody in there as fast as possible and make sure the right person and get in there, right.
So you can start receiving payments, it’s not guaranteed, you’re going to be able to fill your house up right away, unless you live in a market that you know, people need to house really bad, you maybe you have somebody that very next day or whatever.
That’s ready to go in or a few days after you clean the place up and whatnot. But generally speaking, sometimes you can own a real estate investment property, and you go a month, two months, three months, maybe even four months without somebody actually living there.
Which means that that house is just sitting vacant, you’re not collecting any of those rent payments. If you have a mortgage on that house, you’re actually paying that mortgage, okay? Or you look at it as you have money tied up in that house and is not making anything at those particular times.
Other than maybe hopefully the value is going up over those few months. Also, once again, you have somebody renting out your house and some What if they don’t pay like sometimes it doesn’t pay and then you got to evict.
And all that type of stuff like like it’s not guaranteed Same thing with dividend stocks, although, you know, you might get an A dividend stock, you know, whatever it is, you you buy, you know, Exxon Mobil, okay.
Exxon Mobil, are they likely to pay dividend? they’ve paid it for a long time they’re still super profitable company are they likely have had dividend? Yes, absolutely. But are they guaranteed to pay you a dividend.
No, absolutely not like if the board of directors next quarter decides instead of paying, you know, the 4% yield out, and they don’t want to pay any yield out because they want to make some big investment over here.
They could cut that overnight and who knows what that would do the stock might send the stock down 10% 15% The next day, okay, that’s, that’s a board of directors decision there. Okay.
So that’s something to keep in mind, these payments are never guaranteed with either, they’re just, you know, likely you’re going to get the payment, okay? Especially as long as you do your research work on whoever your tenant is.
That’s going to end up renting out your house and whatnot. But there’s definitely you know, you can see, there’s a lot of that as far as the mentality, it’s very similar, someone that’s investing in dividend stocks, very similar to real estate investment properties.
Now, with the dividend stocks, you own part of a company, okay, you own part of a company, whereas, you know, real estate, you own a property, well, you run out of room here, you own a property, so very different there.
You know, some people like something that you can, you know, touch feel, I buy my stocks, I buy Apple stock, or cruise stock, or whatever stock, you know, Toll Brothers, Eli, whatever it is, right? I can’t feel that stock, you know.
I see it in my account, I own this many shares, which those shares represent underlying ownership of that company. Awesome, cool. For me, I can’t touch that some people feel better if they can touch the, you know, the actual property.
And it’s like, I actually own this man, I can, I can drive by it every day, and I can see it there. Okay, so there’s differences there, there’s difference in mentality there. This is in you know, once again, both these can definitely produce you money.
But this one can obviously, you know, produce you a lot more money or a lot less money, it just depends on the situation that that company goes in, right, a company can, you know, have revenues go up 20 3040 50% in a year, right.
And to have, you know, your property go up 20 3040 50% and yours kind of unrealistic. But at the same time, a company can have revenues go down 20 3040 50% in a year, because they just screwed up the business so bad, they made bad decisions.
Maybe a super big competitor came in knocked him off a real estate and property to go down. 20 3040 50% a year, super unrealistic, realistic, unless we’re in some type of crazy like doing, you know, Great Depression and whatever.
And if we’re in that, by the way, the stocks are probably going to get hit harder than that anyway. So that is how you know the differences between the two. Now let’s talk about for a second, what is the way you can actually do both at the same time, okay.
You can really collide, real estate investing in stock investing dividend, there’s one route you can go where you can actually play on both guys. And it’s this thing that they call reads, okay? reads it’s called a real estate investment trust, okay, real estate.
Investment Trust, it’s, it’s a cool thing for anybody who wants to get in on both things. Okay. So what a real estate investment trust is, is they basically pay out 90 plus percent and they’re forced to pay out if you’re going to be a real estate investment trusts, you get tons of tax breaks and whatnot.
You have to pay at least 90% plus out to your shareholders in the form of dividends, okay? in the form of dividends. And these real estate investment trusts, they own real estate, okay. And these real estate investment properties, make them money.
They they make all the money from that it might be they might own shopping malls, they made on you know, hospitals, or, you know, whatever it is they own, you know, big towers and a city, they might you know, that, you know, how’s tons of people, they might own houses, they might own.
You know, apartment complexes, they might own a bunch of different things. You know, there’s tons of different options out there for real estate investment trusts, but they at the end of the day, they own real estate, and they collect royalties and payments off of those real estate properties.
Okay, they have tenants in those, you know, think about big outdoor malls, all those big outdoor malls you ever go to. They’re owned by a company, a lot of them are owned by a company named tanger outlets.
It just depends on your city and your state you live in, but those are owned by company and all those individual stores that Apple store that Tesla store over there, that Victoria’s Secret store over there, the bath and Bodyworks they’re all paying rent to rent out those spots, you know, to sell items.
And guess who’s making money, one of those real estate investment trusts whoever owns that actually is making all those real payments. Now they get that money and they pay their workforce out.
And then 90 plus percent of the profits, they have to pay out to the investors. So you’re really in the dividend stock, you kind of it’s kind of a beautiful thing because you still get the ability to get in and out of it in a day or a minute right.
If you want to get out of a real estate investment trust, you know, stock you saw a few minutes like not hard at all right? But you still kind of get you know exposure to real estate investment properties.
The only differences you know, with real estate investment trust is you have somebody else choosing those properties, not like you’re going to be able to actually go out there and choose and say, I want to buy this house over here, or I want to, you know, do this, you know, retail mall over here.
Things like that, like somebody else is choosing that for you. But it’s a way you can actually play on both. And it’s a great way to kind of get started in real estate, if you don’t have the money to actually buy a home or buy an apartment or buy a condo or something like that and start renting it out and do things like that right.
Or flip if that’s what you want to do. It’s a way you can actually play and still kind of be in stock game and the real estate game, you can actually learn them both at the same time. There’s a ton of different options out there.
Now real estate investment trusts, I don’t really ever mess with them much because usually they’re not going to pay you out the biggest return a lot of them are bigger and it’s hard for them to grow them because they pay out so much of their profit in dividends.
It’s hard for them to really grow in a substantial way so it’s not really something that interest me that much. But to somebody that may be looking for dividend stocks and wants to have real estate exposure.
It’s perfect for you because it’s a read so it is absolutely perfect guys so I hope you really enjoyed this day. I hope you got a lot of valuable information out of kind of understanding the differences between the two dividend investing in 2018 vs Real Estate Investment in 2018.
And rates is how you can actually play in both at the same time guys, thank you for watching. Have a great day.