Real Estate or Index Funds – Which is the Better Way to Build Long-term Wealth?

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There are many different reasons why you should invest in real estate over index funds. Real estate is one of the biggest wealth generators in the world as 90% of current millionaires have obtained their wealth primarily through investing in real estate. When we look at the price of homes, the media price of a home in 1970 was just $23,000. Fast forward to the end of 2021 and the media price for a home is now over $400,000. Investing in real estate also allows you to make money by renting out your land.

Key Takeaways:

  • Real estate can generate regular income through rents and can make use of leverage.
  • Index funds are passive investments that are very liquid and bring no legal liability.
  • Index funds have brought greater returns over the past 10 years, but real estate provides more control and direct ownership.

“The median price of a home in 1970 was around $23,000. But by the end of 2021, that figure has risen to $408,000. That’s an incredible 1,770% increase in 50 years. Few investments can match that performance.”

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