Posted by Jim on August 08, 2003 at 15:18:27:
we would have any flood of overpriced Re buyers!
How I Turned $1,000 into a $1MM in Real Estate … - Posted by Robert Campbell
Posted by Robert Campbell on August 08, 2003 at 09:58:02:
is a real estate book that was written by William Nickerson in the 1950’s.
It is truly a “how-to” classic with a proven formula that still works today.
Unfortunately this book is no longer in print.
The book by Nicholas Darvas that is titled “How I Made Two Million Dollars in the Stock Market” was also written in the 1950’s.
It too is a classic and it is still in print today.
Question …
If you take a poll and ask 100 people what is a better investment … real estate or the stock market … I bet the majority would say real estate.
That being the case, why is the Darvas book still available from bookstores and the Nickerson book is not?
Also, if most people think real estate is a safer investment than the stock market, why are 10X more stock market books written each year than real estate books?
Comments?
Robert Campbell
Thank you everybody … - Posted by Robert Campbell
Posted by Robert Campbell on August 09, 2003 at 14:08:56:
All of you gave me some accurate and clear insights into the mindsets and motivations of those investors who chose between stocks and real estate.
Thanks.
Robert Campbell
Re: How I Turned $1,000 into a Real Estate … - Posted by JD
Posted by JD on August 08, 2003 at 21:02:13:
This is an interesting phenomenon which I have been aware of for quite some time. Every six months or so I make a consious effort to check the number of “real estate investment” titles and “stock” investment titles in a major book store. I would have said that the ratio was 20-1 three years ago. In fact 3 years ago there were more title by and about Bill Gates and Warren Buffett then all of the real estate investment titles combined. Reason 1: Stock investment is passive, Real Estate investment is detailed and involved, hence stocks appeal to more people, particularly book readers, most of which tend to be passive and women. Reason 2: There is a synergistic media/brokerage house machine which promotes stock investment like it were a sporting event, the action and drama subconsiously (sic) appeals to a lot of people.
Re: How I Turned $1,000 into a $1MM in Real … - Posted by Tarheel T
Posted by Tarheel T on August 08, 2003 at 15:52:12:
The stock market is a much faster market and one can be made to believe that they can acheive riches faster in that arena. Stock investing also takes less work,whether the result is losing a fortune or making one. Just call your broker and place your bet and sit back and see what happens. It is more easy to pitch a stock than a re investment because re is local and someone in NY cannot tell you what property to buy with your $10,000. Nor can they make any money off your re choice(as they can by pitching a stock that their firm wants to unload).
Stock invsting can be more exciting because prices are posted continuously whereas re prices move slowly.
And the amount needed to invest in stocks is less than re unless you employ creative techniques.Stocks are liquid and require less commitment to buy as they can be sold with one click of the mouse.
It is unfortunate that stocks so easily appeal to people while re is such a better investment considering leverage and sweat/brain equity.
Re: How I Turned $1,000 into a $1MM - Posted by Ken (Fl)
Posted by Ken (Fl) on August 08, 2003 at 13:15:28:
I have to agree with the laziness of the average investor. Most find it very easy to buy stocks that are readily available especially with the internet. How easy is it to find someone to sell you a stock at a price you are willing to pay. Call one brockerage and it’s done. In REI you have to call dozens of homeowners if not more when you are a novice. Most don’t know how to get others to call them. They also place their own restrictions on the prospect. I.E. “Why would John Smith sell me their house for 50k so I can flip it for 65k. Wouldn’t john Smith sell it for 65k then?..” This was my thought pattern when I started.
They are also less intimidated by a $1000.00 investment than a $100,000 investment which most need to borrow from some source or another. Most peopel buying stocks don’t realize the sophisticated investors use borrowed money as well.
I play both games and find that one is no more a “Casino” than the other. I win and loose in both. Both are dependant upon the populace to make the most rational decisions regarding money, lifestyle, responibility… which rarely happens. Therefore we profit from their whimsy and we loose due to to their whimsy.
God Bless
Re: How I Turned $1,000 into a $1MM in Real Estate - Posted by John V, FL
Posted by John V, FL on August 08, 2003 at 11:26:02:
Robert, if you are a great investor or flipper/trader you can make money in either. There are times when the masses ride the wave and do very well. That is when you have to be very careful and not be a long term investor any more and either flip/trade or stay on the sidelines. Great thing about the stock market is the great traders actually do very well in very volatile and even down trending markets, something the real estate only crowd doesn’t understand. It is very hard to make money when 100 times as many people are chasing a finite supply of overpriced real estate compared to five years ago. From the early 1990’s to 2000 it was very easy for everybody to do well. What is fascinating these days is how much money and percieved wealth there is chasing real estae deals in the hot markets. Everyone in real estate seems to have millions to place and just, has to put all that money to work. Yet if you venture to the dark side corporate America and much of our work force gives me the impression we could be in a 30’s style depression if not for the record liquidity pumped into our economy the last 2 years by Greenspan and the White House. Interesting to see how it turns out the next few years. Did you hear Ken Lay of Enron had to liquidate his real estate holdings in a very depresssed Colorado market for a lot less than he paid for them in 2000? What if property values plummeted like that in California or the Northeast? Everyone leveraged 70% or more today would be wiped out
speculations - Posted by Ronald * Starr(in No CA)
Posted by Ronald * Starr(in No CA) on August 08, 2003 at 11:21:17:
Robert Campbell–(CA)------
Nice to talk to you again.
I like your question and have never thought of it.
Let’s see. Maybe because there is no way to consistently win in the gambling arena–er, stock market–so people are constantly looking for some clue. The books promise a clue.
The major publishing houses have their headquarters in NY City. The major stock exchanges are in NY City. The NY Times constantly has stories about the financial institutions, including the stock players. They have stories about real estate sporatically. Thus the publishing people are biased toward the stock market?
Similar to Len’s view: there is a bigger market for books on get rich easily with stocks than for real estate because more people understand that they will actually have to learn something and put out effort to make money with real estate. The promise of easy money in stocks is an easier sell.
It is a conspiracy. The stock investment industry is in bed with the major publishing houses. The broker’s wifes are editors at McMillan.
Good InvestingRon Starr**
Laziness & Ego - Posted by Curt Dalton
Posted by Curt Dalton on August 08, 2003 at 11:06:48:
Hi Robert,
I’ll give it a stab:
People are, for the most part inherently lazy and don’t want to work to make a buck (just look at all the people who go to RE seminars and do nothing w/ the info when they leave). Reading a book and then putting your money somewhere so SOMEONE ELSE can manage it is easy. You just sit back and wait for the monthly statement to come in. Easy peezy. Investing in RE takes work. Working that 8-6 jobbie doesn’t leave time to do that. They’ve got to take the kids to 3,000 after school events, run their errands and of course they can’t miss that Raymond show on TV!
Also, stock market investing is more “flashy” I think. You can invest in businesses that can you, as a person, probably aren’t qualified to WORK in, but you can OWN a piece of it. When you buy a share of say, Apple stock, you can then brag that you’ve got your money w/ Steve Jobs! Hey, everyone knows Steve so you must be a “player” huh? LOL
Lonnie Scruggs summed up the stock market experience for me: “The World’s Biggest Casino”. Truer words were never spoken.
Curt
Re: How I Turned $1,000 into a $1MM in Real Estate - Posted by Len
Posted by Len on August 08, 2003 at 10:35:34:
It’s because the stock people have better PR, not a better product. We need to start a new TV network, REI-NBC…
Cheers,
Len
Re: Laziness & Ego - Posted by John V, FL
Posted by John V, FL on August 08, 2003 at 14:48:10:
The flash has certainly come to real estate investing lately. It is all the talk everywhere. Easy money being made. The casino experience is for the masses who eventually lose because of greed. I’ve made incredible returns in both stocks and real estate over the years but it took five years for both before I really got good at it. I’m happy for that because when you are caught up in a bubble and make money easy you start thinking you are way smarter than you really are . Granted it used to be low risk to be involved with real estate before it became overheated. Now the risk level is flashing red in those bubble markets. I predict as many will be burned over the next 2-4 years from there recent real estate experiences as were burned in the stock market bear market.