I guess I did cause a SM/RE comparison, but I was really just addressing the negativity toward the stock market.
Your example is somewhat idyllic as out of state does produce the best early results with the smallest investment %, but it’s not for everyone (myself included). Your formula don’t work in SD with huge neg returns of late for those who tried. In SD it now might take 50% down or more to get a positive and let’s call appreciation zero for the next 5 years.
Your 24% model is not compounded and diminishes every year. Otherwise your $40k down would be worth $3.5M in 20yrs (or $1B in 40yrs). At year 10 your rate is something like 6%. (point- cashflow should become material by then, but still not much help). Also, you applied no leverage to the Index fund.
HLS,
The S&P has had a cagr of +10%/year for the last 100 years. Actully, I think it is 11.5% (not 7%). Much more than 900x with total return, before taxes, fees.
Agreed that more have made money in RE, particpation is greater, it is a place to live, has favored tax treatment and is more understood. Fewer buy stocks or understand them.
I say do both, be diversified, and if you can, do as Surveyor has and invest in a favorable state (currently not CA).
