There is much in the media lately about how people are making so much money in real estate right now. There are, in fact, many benefits to real estate as an investment, including tax benefits and some leverage. However, it's not the only good investment. One of our students, Richard, asks the following, very astute question:

Q: All of my financial studies point to real estate being the most robust investment for developing wealth (with its exceptional control, leverage, tax benefits, etc.). I believe I tend to gravitate toward low "people intensity" situations and -- to be honest -- would probably be more comfortable doing something like options trading, but I don't like the idea of forgoing the strongest investment vehicle based on aspects of my personality that could be changed or at least altered. Isn't there a place for getting out of one's comfort zone in order to make stronger progress towards financial goals and, in the process, to stretch one's social aptitudes? Thank you.

A: I will never change my mind on the answer to this question. The best investment is the one that suits you best. No matter how many people make money in real estate, if it doesn't suit you, it's not a good investment for you. You may do okay with it. You will just never be as successful with it as you would with something that truly fits you. The reason is that when you find an investment that is right for you, you will enjoy it, you will research it, and you will have fun with it. You will become an expert in that type of investing. Are there people right now making millions of dollars in real estate? Absolutely. There are also people right now making millions of dollars in the stock market.

Do you think the folks on Wall Street are abandoning stocks and options for real estate? Some of them are and this could get them in trouble, since it's not their area of expertise. I still maintain that you will be happier and make more money doing something that is a more natural fit for you.

That doesn't mean that once you make a lot of money in stocks that you don't end up putting some of it into real estate as a way of diversifying or hedging. It simply means that if your goal right now is to build wealth, do it using a means that works best for you, whether that be stocks, real estate, business or commodities.

Warmest regards,

Tom