.Investing your money is amongst the best methods to save your earnings for early retirement and also to build wealth for your future. There are many other ways to invest the money that allows an investor to broaden their portfolio and reduce the risk on the invested amount. Every opportunity comes with its own set of benefits and shortcomings. So if you are in the market to invest your hard-earned money then let’s take a look at the two opportunities: Crypto Curreny investment and Real Estate Investment.
Cryptocurrency or Real Estate
If you are stuck between choosing the best investment platform then this article will be helpful to not risk your hard-earned money in the long term.
We know, it’s a difficult choice to make without clarity. Coupled with the COVID-19 pandemic, the uncertainty has ruled all the markets. Such uncertainty makes it tougher to choose amidst the existing investing options.
Similar to chess, just a single wrong move and you are already headed to disaster in order to save everything you are actually losing. But for a long time, there are two major investment assets people have been investing in their money. For instance, gold and real estate.
As you know that the prices of gold have been fluctuating since ages. Hence, the return on investment isn’t predictable. Apart from this, the storage of gold is way volatile and also hassled at times.
In comparison to the other investment portals, real estate is comparatively risk-free and has higher esteem. Also, the scarcity of land increases the demand for real estate which makes it perfect for investors who wish to choose the early investment option in land development.
On the contrary, cryptocurrencies, like Ethereum, Dogecoin, Bitcoin, Monero, and so forth, have turned into the most popular asset class for the past few decades amongst investors. As the first cryptocurrency, Bitcoin has practiced a numeral rise in its value over time, especially based on assumption.
Also, a recent example of Dogecoin, which after getting a good social media shoutout through Elon Musk, is also reeling in the newly discovered world of cryptocurrencies, making it advantageous for institutional and individual investors throughout the world.
It is known that all investment resources hold a certain amount of risk. If your purpose is to relish decent financial profits, attain financial freedom, and build wealth then understanding the correct investment opportunity will help you define your future stability.
Pros and Cons of Crypto Investment
Pros
First of all, if you buy a cryptocurrency then you must understand that it is different from real and traditional currency because it is localized and no entity has control over cryptocurrency. Therefore, the world-famous Bitcoin comes with easy online transfer through a series of privately linked computers that share a balance sheet.
Every time when Bitcoin is transferred from one system to the other it is shared publicly through the Blockchain.
There are also a restricted number of cryptocurrencies in circulation, so a ruling party can’t simply print anymore. Well, this criteria makes crypto increase proof and it is amongst the major reasons why everyone out there is so interested in Bitcoin. Crypto invest apps help users trade effortlessly and provide valuable insights on the go.
Cons
While crypto investment has multiple aspects that attract investors, there are many substantial drawbacks as well. And on the top of the list, it isn’t a tangible asset.
You can’t carry Bitcoin in your hand as this only exists digitally. Crypto is easily accessible to cyber attacks alongside the other sort of cyber-crimes that may relieve your investments. There is a lack of transparency which makes it tough to identify the actual value and buy a cryptocurrency, which can take you to be a trader for a higher value than it is actually worth.
Such factors contribute to the loss of crypto as investors are left with nothing. In addition to this, there are no returns or leases paid by the coin you hold, and also there are no alternate cash flow resources.
Actually, the only way to earn money with cryptocurrency is through capital recognition which means the resource will actually increase its value over time. There is another drawback that the cryptocurrency is actually volatile. Here you are required to keep a check on the current value of the coin and its growing value with time. Not just this, but also where your invested coin is trading at present.
Benefits of Investing in Real Estate
Being an investor, you are also free for the opportunity to drive the appreciation of the resource. You can draw strategic enhancements, which can result in increased rents and, since the time real estate investments’ entered the market, the prices are based on the yearly earning they produce, expanding the price of the property.
Real estate also introduces a steady resource of earning- the passive flow of cash. Such monthly rents can be utilized to cover the home loans, maintenance of the property, and also you can manage all your monthly expenses.
Besides this, the monthly rents also grow with the typical inflation of the market which stands out as the most amazing benefit that helps you stand strong against the market.
Why is Cryptocurrency a Less Reliable Investment than Real Estate?
Benjamin Graham and David Dodd said, that “An investment operation is one which, upon thorough analysis, promises safety of principal and an adequate return.” in their book Security Analysis which was published back in 1934. Whereas the experts of cryptocurrency do not guarantee that return.
Here are some major reasons why cryptocurrency is a less reliable investment:
- There are no laws for cryptocurrencies. The investors are anonymous, thus, there is no such way to claim someone responsible for any wrong transaction.
- There’s a risky threat to crypto investment just as fraud and theft. Crypto has stored digitally since entered the market. It is risky because it’s at constant risk from hackers, malware, and operational issues.
- If a hacker somehow accesses the investor’s personal encryption keys, they can simply move the cryptocurrency to another account. The major hacking event occurred in the year 2014 when around $460 million worth of Bitcoin was robbed from Mt. Gox.
- There is also a severe environmental risk from Bitcoin mining. Musk has denounced crypto mining resulting in a decision to discontinue Tesla car purchases via Bitcoin. Elon Musk said that he bothers about a “massive increase” in carbon-intensive energy and coal to produce the electricity required to mine digital currency.
How Real Estate is a More Beneficial Investment than Cryptocurrency?
Real estate has proven the best way to invest your money even during the pandemic, unlike cryptocurrency. As per the recent research by many real estate professionals, the pandemic period has been the most active market for real estate.
Investing in real estate is amongst the best methods to invest in for your future. And the reason is below:
- Real estate has material asset value. Assisted by the real land and the constructed property.
- The value of real property grows with the market inflation, offering you fine gratitude so that you plan on selling the real estate after a time.
- The property investment can offer you stable and passive earning if you are investing in lease properties.
Conclusion
Real estate is amongst the most favored investment options as it is one of the earliest that has entered and boomed the market. It helps you secure your early retirement by building wealth and also it has stood the time as an investment resource.
Hence, there are several ways where you can invest your money besides stocks or cryptocurrency, which is simply a real estate investment. While investing in real estate you can try investing your money with the developers, house flipping, wholesaling, and real property. Moreover, real estate investment is famous because there are benefits that other investment resources simply do not realize.
FAQs
If you are about to invest money in either real estate or crypto, the decision is quite straightforward. In almost all cases, real estate has proven itself a better investment but it will not hurt to broaden your portfolio with both.
The data available tends to support the fact that share investments of the UK outperform the UK property on an average. Also, it does depend on the time of investment. For instance, data that shown of the shares is better amongst all the times, except 1 year to 15 years.
Investing in crypto resources is risky but also profitable at times. Cryptocurrency is a nice asset if you wish to obtain straightforward exposure to the requirement for digital currency, the safer yet potentially less worthwhile alternative is to invest in the stocks of firms with disclosure to cryptocurrency.
If you are new to the investment market, let us tell you that some early investors have filled their bank accounts. But again that is all your luck and thus, considered a risky platform. Therefore, it is good to avoid entering this market based on the assumptions and high hopes of becoming a millionaire.
So with that said – do you want to use cryptocurrency to buy real estate? Well, yes but both the seller and buyer will have to be aboard to mitigate the risk. It is required to search escrow companies & insurance firms that are good with tackling the transactions of cryptocurrency instead of the ‘real world’ money.
