“Buy Stocks” and “Collect Rent” Is Terrible Investing Advice When Followed on Face Value

A lot of real estate is overpriced. People make the mistake of thinking if they just buy property and collect rent then they’ll never have to worry about money again.

Here’s what is missed about real estate:

• Having a huge pile of debt creates stress.
• Being tied to an investment gives you less flexibility.
• Real estate is expensive which means often people have no money leftover to invest elsewhere. This leads to a lack of diversification.
• There is a lot of dreadful real estate out there.

Here’s what is missed about stocks:

• Bubbles — Stock market bubbles can be seen everywhere throughout history. 
• Stock printing — Many tech stocks can be created out of thin air and they don’t pay dividends. 
• Money printing — The US is printing trillions of dollars out of thin air. This creates inequality — the rich get richer and the poor get poorer. 
• Economic fundamentals — Record unemployment and the GDP of a country eventually catch up and affect stock prices. 
• Markets are driven by psychology — If the collective optimism of a nation like the US changes, then so do the stock prices.