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Dividend investing in 2018 versus real-estate investing in 2018 i am gonna break this down for you guys here today and so you can kind of figure out is dividend investing more 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 are a lot of them had 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 gonna 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 gonna 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 gonna go up over time they’re going to become more and more valuable which is gonna 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’ll want to invest in real estate but because you know i’m stock market oriented yeah it’s my field i understand the best out of anything and because i think either you know the stocks are gonna 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 in by the way as they get older i’ll probably go more and more dividend stocks then stocks that or 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 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 with that like no one buys a home or condo or what ever is like oh this might 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 gonna receive rent checks generally speaking okay that’s what they’re trying to do they’re trying to rent that property out to somebody else and hopefully over time that’s gonna 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 they want those payments now the difference is dividend stocks generally payout every three months okay they generally payout every three months versus you know if you have a renter someone renting out your place you’re generally you’re gonna get checks every month this is every three months okay and generally speaking like a dividend investors
Still they want their you know stocks to become more valuable over time they want those shares thereby you know shares and 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 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 the things to increase in price over time all right now with differences when the payments are paid out okay some more differences okay is this one is a little bit hard to get rid of okay we’ll just say hard to get rid of okay it’s
Not that easy to just go out and sell a home or a 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 also sees on the mls and like look we got to go buy this house right now like unless you solve for some silly price it’s 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 it being listed okay any realtor out 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 so i’m unfortunately sitting on a four few years and they
Become super stale and they’re on there forever okay but generally speaking you know one to let’s say four months if it were in a decent market use when you’re home shouldn’t move if it’s really a hot market and you know your home’s price rate you got the right realtor maybe it moves within a few weeks okay but still that’s technically somewhat the hard to get
Rid of where is this you go you can do get rid of a dividend stocking in a minute literally you can get rid of a dividend stock in a minute okay you owe 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 tens of billions maybe then it becomes too you know hard to get rid of 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 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 gonna likely have to get rid of it unless once again you want to sell to 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 bro stocks but they’re still end they’re still volatile and and okay there’s still a volatile okay they still move around a lot so a stock even if it’s a dividend stock it might move five ten fifteen percent in a day but literally if
They report earnings that stock to move five ten fifteen percent up even if it’s a big dividend stock in a day okay it’s 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 five ten fifteen percent in a day is super unrealistic
Like it’s ridiculous for you know a home let’s say it’s you know three hundred thousand one day to also go down to 270 the next day or two eighty like so unrealistic stein you’re 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 is 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 $400,000 olsen’s worth a hundred and sixty thousand two years later and a two-year time for 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 i would say generally you have less work okay and 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 10ks read 10
Qs figure out that company you know study that company really well you’ve 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 you’re the renter was the the perfect renter the the perfect person that was renting that house right you’re gonna probably have to
Put new pane gig the carpets professionally and clean do this and do that you know maybe there’s something wrong with the tile over here maybe something happen in the kitchen an appliance broke and never mind that you got to manage all that overtime each month is you know lightbulbs go out or whatever you know and next thing you know your renter is calling you hey
This one out oh that fan over there we’re now or a see you and it 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 all 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 want 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 a see you in heating units or you know two or three four or five years old they’re the chances are gonna break of the ovens gonna
Break of the fridge is gonna break when they’re there you know within the first five ten years very very low however when those appliances start getting older all those things around the home start getting older you’re gonna have more and more issues and is gonna be more and more work now something else i want to tell you guys here is because these our 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 and so 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 to get in there right so you can start receiving payments it’s not guaranteed you’re gonna be able to fill your house up right away unless you live in a market that you know people need that 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 can look at it as you have money tied up in that house and it’s not making you anything at those particular times other than maybe hopefully the value is going up over those few months also once again you you have somebody renting out of your house and some what if they don’t pay like sometimes it doesn’t pay and then you
Got a victim and all that type of stuff like like it’s not guaranteed same thing with dividend stocks although you know you might get in 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 there’s still a super profitable company are they likely a dividend yes
Absolutely 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 that 4% yield out and they they don’t want to pay any yield out because i want to make some big investment over here they can cut that overnight and who knows what that would do the stock if i 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 gonna get the payment okay especially as long as you do your research work on whoever your tenant is that’s gonna end up you know renting out your house and whatnot
But there’s definitely you know you can see there’s a lot of thus far as the mentality it’s very similar someone that’s investing in different stocks very similar real-estate investment properties no it’s a dividend stocks you own part of a company okay you own part of a company where as you know real estate you own a property will 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 cruz 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 so
I’m 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 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 30 40 50 percent in a year right if to have you know your property go up 20 30 40 50 percent in years kind of unrealistic but at the same time a company can have revenues go down 20 30 40
50 percent 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 property to go down 20 30 40 50 percent a year super unrealistically 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 gonna get hit harder than that anyways so that is how you know the difference is 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 and stock investing dividend there’s one route you can go where you can actually play them both guys and it’s this
Thing that they call wreaths okay reits it’s called a real estate investment trust okay real estate investment trusts 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 they’re forced to pay out if you’re going to be a real estate investment trust 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 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 house 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 a 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 in your state you live in but those are
Owned by company and all those individual stores that apple store that tests the store over there that victoria’s secret store over there that 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 payments now
They get that money in 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 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 in 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 difference is you know with real estate investment trusts is you have somebody else choosing those properties not like you’re gonna 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 in both and it’s a great way to kind of get started in real estate if you don’t have the money to you 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 the stock game and the realistic game you can actually learn a bolt at the same time and there’s a ton of different options out there no real estate investment trusts i don’t really ever mess with them much because usually they’re not gonna pay
You out the biggest return a lot of them are bigger and it’s hard for them to grow and because they pay off 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 interests me that much but to somebody that’s maybe looking for dividend stocks and but wants to have real estate exposure it’s perfect
For you because it’s a reit so it’s absolutely perfect guys so i hope you really enjoyed this day i hope you got a lot of valuable information out of it i kind of understanding the differences between the two dividend investing in 2018 versus real estate investment in 2018 and reits is how you can actually play in both at the same time guys thank you for watching have a great day
Transcribed from video
Dividend Investing in 2018 vs Real Estate Investing in 2018 By Financial Education
