Posted on 02/12/2022 8:15:57 PM PST by SeekAndFind
When someone has some money put away or a little bit of extra income, the most logical way forward is probably to invest it somewhere. A good investment will not only keep the money safe, but will also multiply it over time. Not everyone can have the guarantee of a steady income these days, so it’s always best to have an investment portfolio as a backup for rainy days.
With that said, it can sometimes be hard to choose the smartest investment available. There are several asset classes out there, and many investors are choosing to put a little money in several choices. Still, there is always a smarter investment that an investor might choose to focus on above all else. This will hopefully be their long-term investment, which they will dedicate most of the cash flow and time.
We have a lot of investment options today, with technology giving us options like digital currencies and the stock market, in addition to more traditional options like real estate investing.
It can be confusing to choose between all these investments, especially when it comes to the one that you focus on the most. A real estate investment was usually held up as the best option if one had the money to back it up. The traditional view was that investing in real estate gave you a tangible asset like no other; you can collect rent to generate a flow of cash on a regular basis or sell property to get a large sum when needed. Being a property owner, you at least have a place to live if nothing else.
On the other hand, the 2008 housing market crash in the United States meant that a lot of investors have to rethink their priorities. If someone does not have the margin for a pricey upfront payment, their financial advisor will probably not suggest a real estate investment for now. However, the real estate market is slowly climbing back and housing is again rising in value.
If we look at the multifaceted investment options right now, Bitcoin (CRYPTO: BTC) is probably one of the most hyped choices out there. It has seen lots of rises and falls in the last ten years, capturing the interest of both private and institutional investors across the globe.
While Bitcoin and other forms of digital currency are becoming more common, they still have a long way to go. The quick rise and fall in a cryptocurrency’s value do make them tempting investments, but they are still a relatively high risk.
The real question we’re looking at here is whether an investor should go for cryptocurrency or real estate? Which one is the better investment at the end of the day?
To answer these questions, we should look at the pros and cons of cryptocurrency and real estate one by one. Without further ado, let’s start now:
When we think of cryptocurrency, the first name that comes to mind is usually that of Bitcoin. Here are the main pointers to remember about Bitcoin and of cryptocurrency in general:
It’s a decentralized asset
Unlike conventional currencies like the dollar and euro, Bitcoin and other cryptocurrencies are not under the control and regulation of any central bank.
It’s anonymous
A Bitcoin investment will be anonymous; investors can make transactions without revealing anything about their identity, credit history, phone number, or spending habits.
The transactions are transparent
Blockchain technology includes the permanent storing of all cryptocurrency transactions, making them visible to everyone.
Bitcoin investors and those investing in other assets, such as Dogecoin (CRYPTO: DOGE), LiteCoin (CRYPTO: LTC), and Ethereum, can hope to get the following advantages:
A low entry barrier: Purchasing Bitcoin is usually within reach of most investors. While one Bitcoin is valued at thousands of dollars, it can be broken down into units called satoshis (after the mysterious founder of Bitcoin). An inventor can usually start their Bitcoin journey with just $100, and then save money until they can buy more. The same goes for other cyrotcurrecnices as well.
Increase in value: Since more and more investors are getting interested in cryptocurrency, their value is likely to rise with the coming years. A high risk tolerant investor would likely go for this chance.
Relative stability: If you go for a fairly stable cryptocurrency, such as Bitcoin, there’s a certain amount of reliability and security around it.
There might be a lot of upsides to investing in cryptocurrency, but there are definite downsides as well. These include:
The possibility of it being a bubble: An asset is called a bubble when its price far surpasses any intrinsic value. The price of Bitcoin especially has spiked quite a few times in the past, with the reason being mainly speculation rather than any fundamental value.
Security problems: With the digital storage of cryptocurrency, there are higher chances of risking a loss through hackers, glitches, and malware. If a hacker targets a cryptocurrency exchange, which does happen quite often, they might get access to thousands of accounts.
High volatility: Volatile assets are usually not seen as good or stable investments. Bitcoin and other cryptocurrencies are very volatile by nature, which increases the risk of investing in them. In just one year, the value of Bitcoin can jump several thousand dollars and fall at the same rate, too.
Regulations from governments: Since cryptocurrencies are usually seen as a challenge to conventional currency, some governments might restrict or outright ban any cryptocurrency transactions in their respective currencies. This may also occur due to digital money being an instrument in tax evasion, transaction in the black market, money laundering, and so on.
Cryptocurrency has its ups and downs, but so does a real estate investment. Let’s look at the main characteristics of this investment option now:
It costs a lot upfront
You need to have a sizeable amount of money for even the most basic real estate investment. Some investors resort to loans and mortgages to help with the down payments and future transactions. One of the best ways to start is to look into how to find used mobile homes for sale.
There are several ways to invest
A real estate investor has many choices; they can rent out an apartment, flip houses, or build manufactured homes to sell and make a profit.
Here are the main upsides of investing in a real estate asset:
It’s a tangible asset: You can actually see and touch the property you’re investing in.
Cash flow: Rental properties, whether AirBnbs or the traditional kind, can provide steady income for their owners.
Tax benefits: Some real estate investors might get tax breaks according to what they own.
Increase in value: Most properties are likely to increase in their market value. However, there’s always a risk involved.
Downsides are in every investment decision. So, it makes sense to look at the ones for real estate as well:
High barrier of entry: Not everyone can afford to invest in real estate. It may require going into heavy debt, which has its own major risks.
High maintenance: Any kind of property requires regular maintenance, which can run a high cost.
If we look at the economic principles and nuances of investing in real estate or cryptocurrency, there are good and bad sides for each option. While cryptocurrency might be a trendy and exciting choice for the coming years, there’s little doubt that real estate still comes out on top. If one can afford it, the psychological benefit and tangible asset value is hard to beat. Cryptocurrency may still have a place in most investment portfolios, but having some actual property is best for most demographics.
Buy dirt.
The mantra of “always bullish” is a commercial imperative with all these firms. Buyer beware is mine.
I like both.
“An asset is called a bubble when its price far surpasses any intrinsic value”
Articles like this scare me. Hint: if you need “bubble” to be defined for you, don’t do your own investing.
Real estate. By far.
You can’t grow food on bitcoin.
Crypto is always presented as a medium of exchange, not an investment.
At least that was the early talking point.
Actually, it is a lottery ticket. Lottery tickets are good investments...........................
At this point I think a lottery ticket could be an investment.
I’ve only bought one lottery ticket in my life, it was the very first day Texas had them... early 90’s I believe.
If things go south as bad as it looks—they’ll tax us out of our land.
Land is the only thing that lasts.
Dirt been around far far longer than cryptocurrencies and dirt will continue to be around after cryptocurrencies have gone....
P
Real estate. They’re not making any more of it.
As someone who has jumped into the Crypto market heavily in the last year after doing tons of research:
- Bitcoin and other Crypto currencies (other than privacy tokens like Monero) are not anonymous. That is a lie told by the corporate media. They most certainly can be tracked and are consistently tracked (remember the power grid hack? The government traced the bitcoin right to the wallets they were sent to).
- Crypto Currency is easily THE best performing asset class since it started 12 years ago.
- Crypto Currency is HIGHLY Volatile. Do not invest in it unless you have patience and the stomach to hold through terrifying downturns. Market corrections of 85% have happened. The Crypto market crashed 60% from its all time high since November and has bounced back only about 20% since then. If stocks dumped 40% people would jump out of windows. That’s a Tuesday in the Crypto Market. If you can stomach such wild swings though and if you’re willing to take the risk that your money might be tied up for a few years, the upside swings are also breathtaking.
- There are far fewer safeguards when investing in crypto currency. You have to be responsible and careful. You can definitely make a mistake that would cost you huge amounts of money such as sending your tokens to the wrong wallet address - in which case they are gone forever. If you fall for a scam, you can also lose a lot of money potentially. Investing in crypto is nowhere near as easy and user friendly as investing in stocks yet.
- real estate is a good investment particularly in an inflationary environment. That said, the housing market really blew up last year so the returns might be somewhat muted for a while - especially if the fed hikes interest rates which will drive up mortgage rates and drive down house prices.
Hard to make solid earth vanish in an instance or lock yourself out of accessing it.
Bitcoin advantages:
"Relative stability: If you go for a fairly stable cryptocurrency, such as Bitcoin, there’s a certain amount of reliability and security around it."
Bitcoin disadvantages:
"Bitcoin and other cryptocurrencies are very volatile by nature, which increases the risk of investing in them."
Ah, it's one of those relatively stable yet very volatile assets.
Thanks for the wisdom, Justin.
Miss Teschmacher: "Get out!"
Lex Luthor: Before that. He said, "Son, stocks may rise and fall, utilities and transportation systems may collapse. People are no damn good, but they will always need land and they will pay through the nose to get it!
Forgot a few.
1) Very low cost to send someone bitcoin versus bank or western union
2) Receiver of Bitcoin must convert coin to local currency, and incur a fee
3) china is one of the largest bitcoin miners, the folks who validate the transaction and get to see every preceeding transaction. The red Chinese prolly due the work on the cheap cause your meta data and digital history is way more valuable
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