Now that Google is $704 a share
 

If you would have bought at the IPO in 2004 for $85 at lets say 500 shares you would be sitting with a nice profit of $309,500

Wowsers!

google was ok, but,,,,
 

500 shares @ 85 bucks is $42,500. If you had bought $400,000 worth of real estate in many areas in Jan. 2004 (Bend, Ore, 106% in 5 years=21% per year) at the end of 2006, the value would've increased to $705,000+. That is a $305,000 gain, PLUS some tax savings each year of about 6K. Pretty close to same results overall, imo.

I'll see your Google, Forrest, and raise you an Apple.

It launched at $26 per share, is worth about $190 now, and has been split 2:1 three times. In other words, its worth is 58.5 times greater now: (26/190) x (2x2x2) = 58.5.

A similar investment of $42,500 (500 shares x $85) in 1984 would yield $2,498,250 today.

And how much property tax, insurance, management fees or management time, maintenance costs, repairs, sales commissions, etc, would be involved in 5-years of buying-holding-selling this property? I have invested in both stocks and real estate, so I am not for/against either, but you have to include such in your P&L. That goes for short-term stock trading schemes, too (commissions, taxes).

He doesn't pay taxes, what makes you think he pays those? :p

tenants pay those
 

costs for me, and I appreciate them doing that.

Throw in negative cash flow on rent, maintenance/upkeep, and selling costs and that takes your profits down. You'd also be making a 1 in 1,000 decision to know exactly when and where to buy and when to sell. Nobody, including the most adept real estate investors can predict this. Of course, the Google example is the same kind of luck, but you make you case as though this happens all the time in real estate.

I bought a rental with hardly anything down, fought a negative cash flow for six years, hell with renters, finally got out of it for barely what I had into it because I was facing a balloon payment. I guess I wasn't meant to be rich. :(

at the rate google is going in another 20 years those 500 shares someone bought could be worth a lot more than Apple

sorry about your bad luck or choices
 

Ok, I'll bite. Don't buy with neg cash flow, don't sell,don't do a balloon loan, just re-fi, hire good mgmt, and check areas that are good to invest in. Try any of these in the past and you win HUGE. Calif in most decades, St. George in 90's, Casa Grande AZ in 2000, Bend Ore last 5 years. All made OVER 100% increase in value in 5 years or LESS. If you put $10K down on any of them , when value doubled, you increased your 10K to 100K. That is leverage my friend, and many are doing it RIGHT now, like me. Over last 49 years, the annual avg PER year is 6.34%. If you want to not pay taxes legally and create wealth, real estate is your best choice, period.

Thanks, I understand real estate finances. Too bad for me Utah late 90's wasn't one of those time periods. It's not as simple to catch one of those waves as you describe. You see real estate ramping up, and it might be a false ramp up and go back down. Another time, you might try to get it and it will jump 20% in a month or two while you're figuring out what to buy and what's happening in the market and you missed the ramp up. You also have to know what to get out. These things happen quickly and if you miss the high point, you could get hurt in a correction.

Also, you don't always know the cash flow's going to be negative when you have repairs and tenants stick you for rent. I believe in real estate, but it's not for everyone. When I get a larger portfolio, I'll get back in. For now I'm sticking with index funds.

Also, where do you get the 6.34% number? Sounds high.