Real Estate vs The Great Crypto-Deception

Summary

Which is the better investment, real estate or cryptocurrency? 

Here are some reasons why real estate reigns over crypto:

1. Stability. Real estate has a history that cryptocurrency does not have. In terms of investment, cryptocurrency is still brand new and very volatile.
2. Leverage. You’re able to leverage other people’s money through bank financing on an investment property.
3. Tax Advantages. Most of the income you create off of cash flow from real estate can be tax-free because the IRS tax code was written to benefit businesses and owners of real estate.
4. Control Over Your Investment. When you invest in a piece of property, you choose what to do with it and how you can earn income from it. Although the market can impact the value of your investment, you’re not completely at its mercy.
5. Results are Duplicatable. With proven strategies and systems, you can duplicate your success from one market to another.
6. Ability to Create Income. You can start from scratch. Unlike with crypto, you don’t have to go in with money in order to make money

The one advantage that crypto has over real estate is liquidity. You can sell whenever you want.

But the great deception about crypto is that it is the new way to get rich. Sure, you can explode your income fast but you’ll have to spend the rest of your life figuring out how to get the same results again.

Truth is…your ability to create wealth is not dependent on the latest technology or the hottest asset. It’s all you.

Full Transcript

 Which is the better investment, real estate or crypto? 

All right. Now, let’s first talk about real estate versus crypto and I want to just kind of define the purpose of this video. I am not an expert on cryptocurrency, on Bitcoin, Ethera, all the stuff out there is not my area of expertise. But I will say this, cryptocurrencies, digital currencies, they are here to stay. It has completely changed the way currency can be done. There is no question, it is here to stay. Is it a good investment? That is a question for this conversation. Is real estate a better investment? That is a conversation that we’re going to have in this video.

Now, cryptocurrency is definitely here to stay, so is real estate. Now, my expertise, my experience, is more in the real estate space. I look at this from the perspective of real estate is the reigning king of how you create sustainable wealth versus cryptocurrency. Cryptocurrency is going to have to come in and prove to me that it is a better deal. 

Now, I’m going to talk about why I see real estate as being superior to cryptocurrencies and, in some ways, cryptos may have some advantages over real estate. At the end, I’m going to talk about exactly why cryptocurrencies are deceiving so many people. What is the great deception of believing that cryptocurrency is a way to get rich?

Why is Real Estate Better?

1. Stability 

Now, first of all, let’s just talk about real estate as an investment versus cryptocurrency. I believe, number one, that real estate is a more stable and predictable investment over time, for a very simple reason. It has a history that cryptocurrency does not have. Cryptocurrency, in terms of investment, is still in its infancy. It’s still brand new. I mean, it’s been around for years, but it’s still compared to real estate, compared to even traditional stock market, company stocks, is still a very, very new product. Because of that, there’s a lot of volatility. There’s a lot of uncertainty.

I mean, you’re looking at over the last year, cryptocurrency has gone from in the mid teens to the mid or up nearly $70,000 for a cryptocurrency. In just a day, it can fluctuate 10%, and that’s not even that big of a deal. The volatility of it is just kind of mind numbing for somebody who is used to something like real estate where, when you have a collapse and real estate prices drop over a year by 10%, that’s dramatic, or increases by 10% in a year, that’s considered dramatic compared to increases of 10% in a day.

2. Leverage

Now, there’s something other that real estate will allow you to do. Real estate will easily allow you to leverage other people’s money. Now, again, with cryptocurrency, I’m not saying you can’t ever do any of this stuff and I’m just talking in terms of a way of practice. With real estate, you are able to leverage other people’s money. You’re able to get financing on it. I can leverage and buy a $1 million investment property with maybe only 200, $250,000 of my own money and the rest of it is bank money. I’m able to get the investment leveraged and I can control the entire asset without having to put up all of my own money.

3. Tax Advantages

Real estate also allows for massive tax advantages. Through depreciation in real estate investment property, you’re able to take your income that you’re creating off of cash flow real estate, and a lot of that can be tax free. 

Now, I’m not your accountant. I am not an accountant so make sure you check with your financial advisor, your accountant, when it comes to actual details with this. But this is something that real estate… One of the great benefits of real estate is the tax advantages of what you’re able to do to leverage the advantages of the IRS tax code to create wealth without the government taking all of it.

4. Control Over Your Investment

Number four, with real estate, you actually have a level of control over your investment. Now, this is true when you are an active investor and you invest in a piece of property, whether it’s single family home rental or Airbnbs or multifamily or commercial or whatever it is, you actually have control over the investment. 

You own it. You can choose to improve it or not improve it. You can choose what the rents are going to be. You can control occupancy. You can change how you rent it. If it’s a residential property, you can rent it on a long term rental, you can do it on a short term vacation rental or a corporate rental, or maybe turn it into a vacation rental or an Airbnb. You have control over how much you’re going to upgrade it.

There’s so many different things that you have control over with real estate that, with cryptocurrency, when you just buy crypto, you have zero control over the value of that. You’re just basically at the mercy of the market. Just like when you put your money into somebody else’s company, i.e. the stock market, you have no control, and you are completely at the mercy of the market. 

Now, in real estate, the market does impact the value of your investment but it does not have total control over it. You have some control. 

One Advantage of Cryptocurrency Over Real Estate

Now, one of the advantages that cryptocurrencies may give you a lot of times that real estate investing does not is cryptocurrency, in a lot of cases, is going to be more liquid. I want to sell, I can sell today. With real estate, not quite so fast, which, because of the stability of real estate, kind of modulates that disadvantage of real estate and that is, it is not highly liquid.

The Great Deception

But here’s the thing. Here’s the great deception. The great deception that a lot of people have bought into, and this is not that cryptocurrency is the deceiver or even the people who buy and sell cryptocurrencies are deceptive, but it’s just the way we look at something that comes along and takes the world by storm. 

That is, that people that bought in a few years ago and now, all of a sudden, we’re not talking about measuring their return on investment in percentages. We’re talking about exponential multiples of return on investment, thousands of percent return on investment.

Here’s the great deception, is that it is the new way to get rich. I believe the biggest tragedy of somebody who invested in cryptocurrency in the last few years and got their first really big home run, financial home run, by buying cryptocurrency in the last few years is the fact that they will never, ever, ever be able to duplicate it again. 

Some of those people that bought at the right time, and then they saw it go to the moon and, all of a sudden, they went from having a thousand bucks and now they’re millionaires, and they’re like, “Yes.” They will spend the rest of their lives trying and trying to find the next home run that will duplicate that.

The Biggest Advantage of Real Estate

The biggest thing about real estate is that it has created home run after home run after home run. 

Now, granted, probably never like you’re going to see with cryptocurrency. But the thing about real estate is that it is duplicatable. You can create wealth here and, in this market, you can do it. You can do it in the next market. You can do it in the next market. You can do it in this location. You can do it in that location. That it has proven over time that it is a solid, consistent way to create wealth and, when you know how to do it, you can leverage wealth and create it quickly.

Now, the final thing I will say is if you’re watching this and you’re a real estate agent, the biggest thing is that real estate allows you to actually create income and earn and generate income. Whereas, with crypto, you’ve got to go in with some to be able to make some. And so, wherever you are, you can start absolutely from scratch. 

Now, the biggest purpose of this was I’m just thinking that a lot of people have gotten all excited about cryptocurrencies and are like, “How do we get into it?” and all this kind of stuff. I look at it and I’m like, “Is this the way to go compared to the power and the proven track record of real estate as a way to get rich.”

Here’s what I want to hear from you. I want to hear in the comments, what is your take on this? What is your experience? What are you seeing? What are you hearing about real estate versus cryptocurrency? I’d love to hear your comments, your thoughts, your rebuttals, whatever it is. Make sure you put it in the comments. If this video’s been helpful for you or intriguing to you, make sure you give it a thumbs up. 

Whatever it is, understand that the opportunities to create wealth and have the lifestyle of your dreams is, ultimately, up to you. Don’t depend on some technology or some asset to be the magic. You, my friend, are the magic.