There’s no doubt that the 401(k) retirement plan has been a popular means for Americans to save ahead for future retirement. But the question remains … Is a 401(k) really the best place to invest your money if you’re looking to build long-term wealth? Or, could investing in something else, such as real estate, be a better alternative?
Ultimately, the answer for YOU lies in your specific money and retirement goals. And as with anything related to your income, investments, and retirement, it’s always smart to run your ideas by a certified investment professional. You may also want to work closely with an accountant to ensure you’re maximizing your tax benefits.
In my personal experience, I’ve found that investing in real estate offers some distinct advantages over investing in a 401(k) plan. Today, I’ll walk you through the top 5 benefits I’ve discovered.
5 Reasons Why I Invest in Real Estate vs. a 401(k)
1. Real estate is a tangible asset.
Investing in real estate means you have a piece of property that you can see and touch. The tangible nature of the asset means that you also have more control over it. Not to mention the fact that property values typically don’t fluctuate as wildly as stocks, bonds, and mutual funds.
2. Real estate investments provide monthly cash flow and passive income.
When you invest your money in a 401(k), it’s completely tied up until you reach retirement age. With real estate investments like rental properties, however, you can enjoy positive cash flow month after month, year after year. Not only will this give you a higher income potential TODAY, it’ll also provide another wealth-building avenue for RETIREMENT.
3. You can use someone else’s money to buy an asset that appreciates.
With a 401(k), the government sets limits on how much money you can invest each year. You’re also limited by the amount of income you earn and how much you have left over to invest.
When you invest in real estate, you can leverage someone else’s money (the bank’s) to purchase an asset that appreciates. Typically, property values outperform inflation and can set you up for significant profits down the road.
4. Real estate investing offers distinct tax advantages.
When you have rental income, it’s often taxed at a lower rate than ordinary earned income. This benefit alone can save you a significant amount of money in taxes. Your taxable income is further reduced by being able to deduct things like mortgage expenses as well as property taxes and maintenance costs.
5. Real estate investments offer a hedge against inflation.
Whenever the cost of living significantly increases, property values typically do, too. So do rental rates so you’re able to keep up with or even surpass inflation when you have rental properties.
Learn How to Build Wealth With Real Estate Investing
Are you interested in growing your wealth and achieving financial freedom by investing in real estate? In my Real Estate Masterclass, I share the exact blueprint to follow to start growing your wealth and passive income with real estate. If I can do it, you can too, and I’m excited to show you HOW!
