Stocks vs real estate


#402

Wall Street is all crooks


#403

I actually don’t trust either. :stuck_out_tongue:


#404

I agree with not trusting either. People who get paid on commission whenever you buy/sell something will always tell you it’s a great time to buy/sell.


#405

Yep. Always follow the money. One question I tend to ask whenever working with someone new is to ask how they are compensated for what they are working with me on. And based on the compensation model, it helps me understand the amount of risk I am exposing myself to.


#406

Reviving this thread for those who like to talk cock about Stock vs RE.

Since marcus brought up FIRE by stock or RE, I realize the definition of stock investment and RE investment has to be clearly defined.

For the purpose of FIRE, should RE investment means rental through PM only or include self-managed (wonder how many can manage to do minor repairs and maintenance till 80s, 90s years old?)

For the purpose of FIRE, should stock investment means dividends paying stocks only or include stocks gained through RSUs?

Do source of funds matter? Must be from income only? For techies, their source of funds are likely to be tech stock RSUs which can balloon to multiple millions of dollars. They sell to buy RE rentals, so they are FIREd by stock or RE investment?


#407

If we define rich as greater than $100 mil, other than by starting a business, can we build up to this wealth through RE investment (as defined by preceding post) and/ or stock investment (as defined by receding post)?
Will the conclusion change if definition is lowered to greater than $20 mil?


#408

I think FIRE is based on how you earn the wealth, so the employee would be stocks. They later diversify into RE.

Also, this forum tends it only focus on the bay area where RE has beaten the national average for decades. That’s a very different from a conversation about what’s the best strategy for a broader population. People here don’t care about the world outside of the BA though.


#409

I have the impression, the active posters of less than 50 years old get to FIRE or about to be FIRE through stocks (including RSUs & ESPPs) :slight_smile: Some over 50 years old also FIRE through stock… vaguely recall ptiemann is an ex-techie, correct?


#410

Neither Wifey nor I have not been lucky enough to work for an IPO company. Wifey and I bought RE by saving income. Income in the bay area consists of a good chunk of stock. You decide how it should be accounted for :slight_smile:


#411

I was thinking of your type of situation which I believe is more common. IMHO, IPO is a clear cut by Stock. Another related issue is whether RE or stocks are better for maintaining FIRE/ wealth preservation. Yet another issue is wealth transfer.


#412

Black cat white cat, whichever catches the rat is the good cat.

Looking at the net worth list, most people seem to have between 3 to 6M to their names? Assume you are in your 40s, how should one allocate their assets? What percentage in stocks and what percentage in RE?

We can drill down a bit more after we decide on the big percentage, like what locations and what property types for the RE part. What kinds of stocks for the equity part etc.


#413

Hah. That’s one of wifey’s favorite quotes. She attributes it to Deng Xiaoping and the opening up of China.
FWIW: Wifey and my retirement strategy is to use rental income to replace W2 income. Hence why we have been buying multifam. Eventually we plan to 1031 the smaller properties we have been aggregating into a bigger complex and have it professionally managed


#414

How much of your asset is in stocks vs RE? Over time do you plan to shift more towards RE?


#415

Excluding primary, we are probably 60% RE, 40% Stock (could very well be wrong as I only spent a minute doing mental calculations. lol). Stock includes all our 401ks which are in index linked or target funds with a date far in the future.


#416

Where have you been buying? I’ve been interested in looking for them, but haven’t found the right one yet.


#417

I started buying in Sacramento and unwound those purchases last year (except for 1 asset) since anything that far has to be managed professionally. Wifey started local as she wanted something she can manage herself. Over the years we picked up something in Santa Clara, San Mateo and Sunnyvale. The San Mateo one has the best cash flow but is also the hardest to self manage because of the distance.


#418

It’s hard now to find anything that will cash flow in the bay area when interest rates are north of 4%. Only reason I am ok with my Sunnyvale purchase last year is because I 1031-ed my Sac places into it and I got a very nice rate of 3.625% on 30 year fixed.


#419

Do you have the ballpark numbers to share? :blush:


#420

If we ever meet in person :slight_smile:


#421

Sure… PM me and I’ll set up a time… :smile: