Have you ever been in a car when someone releases the steering wheel?
When I was in the seventh grade, I had a youth leader that was a little on the wild side. His antics endeared him to the guys in the group. He would jokingly try and take corners at double the posted speed. He would also do a “Seat Belt Check” where he slammed on the breaks. If you were not wearing a seat belt, you might end up with a bruise.
On a straight section of the road, it was not uncommon for this youth leader to release the wheel and let the car go where it felt like. As a passenger, you knew that things were completely beyond your control.
Letting Go of the Wheel: Investing in the Stock Market
A wise professor shared with me the reason he had chosen to invest in real estate over stocks and bonds. Control.
He realized early on that he could not control the stock market. For him the stock market involved too much risk. CEO’s, Boards of Directors, and investment fund managers had more control than he did in which direction a stock’s value went from day to day.
The daily decisions that make a companies stock price fluctuate are beyond the control of the individual investor. Marketing, product design, research and development, employee compensation, customer base, and resource allocation cannot be easily influenced by the individual stock investor.
Investing in the stock market resembles letting go of the wheel. You have surrendered control of your money to the whims of the market and management.
For Those Who Like to Drive: Real Estate Investing
Real estate investing is for those who like to take a more active role in their march towards Retirement Freedom.
As the owner of an investment property, you can choose the management team. The management team will be hired and fired based on their performance. The management team answers to you as the property owner.
“Location, location, location,” is the mantra of real estate. Your choice of location will allow you to control your customers (tenants), pricing (rent), and product (house, apartment, etc.).
As in all investing, some things will be beyond your control. Your success will be greatly dependent upon the property’s ability to attract good tenants that pay a fair rent and build wealth for you.
Real estate investing places you firmly in the driver’s seat on your way to Retirement Freedom.
Passenger or Driver?
Which would you rather be, a passenger or a driver?
If you are comfortable with having your investments at the mercy of the market and company management, then stocks may be for you.
For those who want to drive, give Maclennan Investment Group a call at (925) 324-8626.