Another thing that isn't discussed much is the true cost of ownership. If you buy an index fund from Vanguard within an IRA account, you pay $2.50 or less per year on a $1,000 investment. That's it. To sell it or buy it, you simply click a button on a web site. Piece of cake.
Real estate is a different matter. You incur a cost to buy it, you incur a cost to sell it, and you incur a cost to hold it (insurance, taxes, maintenance and upkeep, etc.). These costs can be substantial.
Other hard assets are similar -- if you like gold, for example, you incur a cost to store it, and someone often gets a cut whenever you buy and sell it.
|