FASTEST Way To Retirement: Stocks vs Property - End Of Investing Debate! FREE Financial Model

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Australian Property Mastery with PK Gupta

Күн бұрын

The Real Estate vs. Stock Market debate is OVER!
❓ Property vs Shares: which asset results in better returns in Australia?
🤔 Which one is the fastest way to becoming a millionaire?
🙌 Instead of sharing a BIASED opinion, in this episode Brendan Colley, qualified accounting & finance expert, shares his objective financial model, absolutely FREE!
💰 It reveals the COLD HARD DATA most investors don't know.
⚠️ WARNING, property investors may be disappointed at what you learn at the end!
#stocks #sharemarket #investing
Chapters:
00:00:00 - Stock Investing vs Property Investing
00:03:48 - Investing in Property vs. Stocks
00:07:58 - Leveraging Shares: Apples vs. Oranges
00:12:19 - Investing in Equities and Property
00:16:34 - Assumptions for Property Investing
00:20:38 - Property vs. Stocks: Accumulated Equity and Cash Balance
00:24:54 - Reinvesting Dividends in Property vs. Stocks
00:29:05 - The Benefits of Investing in Property
00:33:01 - The Divergence between Shares and Property
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💡 I Help People Achieve PASSIVE INCOME Through Property Investing Using Our Unique Data-Driven System, So You Can Confidently Buy Top 5% Growth & Cashflow Property, WITHOUT Wasting Months Doing "Research", Spending Weekends At Inspections OR Dropping $15k On Buyers Agents Each Time 👉 consultingbypk.com.au
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DISCLAIMER: No Legal, Financial & Taxation Advice
The Listener, Reader or Viewer acknowledges and agrees that:
• Any information provided by us is provided as general information and for general information purposes only;
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#PropertyInvestment #PassiveIncome #Australia #RealEstate

Пікірлер: 56

@AusPropertyMasteryWithPK 2 ай бұрын

❤ JOIN THE COMMUNITY & GET FREE SUBURB TIPS + STRATEGIES 💡 Private Facebook Group With Over 40,000 Clients & Investors 👉 facebook.com/groups/passiveincomethroughproperty 💡 Top Ranked No "BS" Podcast On Spotify/ iTunes/ Google 👉 consultingbypk.com.au/podcast/

@danhato133 2 ай бұрын

It would be interesting to see how a debt recycling like approach where someone leverages their property holdings to buy shares would go after 30 years.

@scooterstubsman1893 2 ай бұрын

Thanks for a great comparison , glad you gave the shares the option of reinvestment of franked dividends .. and pumping into to the cash flow the avoided interest on the loan costs !

@JarrydGreitschus 2 ай бұрын

This was quite a good discussion, and one of the few that considers leverage of shares. One poorly defined term however is the loose use of the words "trader" and "investor". This discussion is comparing property investors with share market investors. Trading is something completely different. It's a much more active approach to buying / selling with some sort of positive expectancy to beat market averages.

@AusPropertyMasteryWithPK 2 ай бұрын

Very good point. And a good word to use: positive “expectancy”.

@JarrydGreitschus 2 ай бұрын

@@AusPropertyMasteryWithPK everyone "expects" to make a profit 😉 But it does change the leverage discussion entirely. For example, in trading futures contracts, it is not uncommon to be able to take a 95% leveraged position on a financial product such as the E-mini. But you'd be absolutely bonkers to try and do this for a long term buy & hold strategy!

@scooterstubsman1893 2 ай бұрын

one issue not often considered with property is that it can take you 10+ years to actually work out if you bought the right one , liquidity is also not valued in this comparison ... so the opportunity costs need to be considered , perhaps these things might offset the volatility of shares but it would be good to see a scenario on this ?

@AusPropertyMasteryWithPK 2 ай бұрын

@@scooterstubsman1893 yes agree, we didn’t mention liquidity, which is a double edged sword with volatility too.. In term of knowing if you bought well, my experience with over 3,500 transactions suggests we don’t have to wait 10 years, rather the best outperform happens in the early years and as time goes by the standard deviation of outperformance narrows

@brendancolley7353 2 ай бұрын

Agree with your point Jarryd, it was something I noticed watching the video back that 'trader' and 'share market investor' are incorrectly used interchangeably. Our mistake. As someone who use to trade contracts for difference in currencies (with mixed results) I'm well aware of the difference. Hopefully watchers of the video can read these comments to help their understanding.

@samuelbarnes9243 2 ай бұрын

I don't believe this is measuring risk correctly. The theoretical maximum downside on an unleveraged Stock portfolio is 100%, the theoretical maximum downside on a leveraged Property portfolio is over 900%. Of cause we are talking about theoretical but what I'm getting at is just because the volatility is lower doesn't mean the risk is lower because in one situation you are using leverage and the other you are not. I would argue that a 50% leveraged broad market stock portfolio is actually in a similar risk band to a 90% leveraged properly portfolio, bring the risk adjusted returns roughly in line. And before I hear "Stocks can go to 0, where property cant"... on an individual level that may be the case, but on a broad market portfolio, for that to happen you're betting on the entire economy going to 0, that's just as preposterous as property going to 0. I would however suggest that for an average person negative equity is a lot easier to carry in property than stocks though. That said, I believe a combine strategy is best.

@brendancolley7353 2 ай бұрын

Thanks for your input. I tend to agree with those rough % in terms of comparing like for like on a risk adjusted returns basis. The reason most of the video focuses on an un leveraged share portfolio rather than one at 50% is it reflects how most Australians invest in shares (unleveraged). Certainly merit to holding both.

@samuelbarnes9243 2 ай бұрын

@@brendancolley7353 I've never actually taken a proper look at the volatility of stocks compared to housing to get a proper like for like comparison but it would be an interesting exercise. Most people seem to be way more comfortable with housing leverage anyway though.

@brendancolley7353 2 ай бұрын

@@samuelbarnes9243property in Australia is much less volatile than shares (either ASX or international indexes). I think the largest drops in value property on aggregate has seen were between 7.5-10% and this has only happened twice. Those times were the GFC and beginning of COVID. This stability explains why people are prepared to hold >80% leverage.

@mattyttv 2 ай бұрын

Great discussion. Volatility can be a pro, rather than a con, depending on the lens you look through. Keen to see stock investing in blue chips and with 20% in disruptive markets, only buying on red monthly closes and investing back the equivalent of the holding cost of the property each month and with the same starting deposit over 30 years. Dividends should also be reinvested (like rent from a tenant) Then it is fairer comparison. My hunch is shares will be higher, without leverage.

@AusPropertyMasteryWithPK 2 ай бұрын

Dividends were discussed and modelled and only help beat property when there is sufficient leverage

@theseira 2 ай бұрын

DCA in QQQ over 20 years way outperform property. Do your back test and your own research. Land tax not considered also in this example.

@brendancolley7353 2 ай бұрын

Valid point on the land tax. I’ll look to add this when I get time.

@JasonYuSprints 2 ай бұрын

Great insights 🎉 thank you 👊

@willleslie2745 2 ай бұрын

Please keep doing what you're doing!

@shashankvenkatesh5489 2 ай бұрын

As you correctly pointed out, leverage is the biggest driver. Interesting to get both of your views on products like NAB Equity builder allows you to buy ETFs, at a loan to value ratio of up to 80%, and on average 75%. And there's no margin call, and it's monthly loan repayments just like an investment property. ETFs such as NDQ, or S&P500 ETFs domiciled in australia. @brendan: keen to hear your thoughts on comparing a product such as that (leveraging the 75k for shares at 75% LVR into ndq), when compared to property investment as you've done. Both have pros and cons, property still probably comes out ahead, but probably doing both leveraging ETFs and IPs could be the preferred approach.

@brendancolley7353 2 ай бұрын

Thanks for making me aware of these products, I’m not familiar with them as it’s been over 5 years since I’ve held equities on leverage. I suspect banks are willing to allow higher gearing into ETFs and not enforce margin calls because they are diversified. Leveraging ETFs to those levels would produce large volatility in your underlying equity position as the value increases and decreases. I think most investors would be uncomfortable with such wild swings in the value of their starting capital. As with most investing, time in the market and consistency in reinvesting drives most results regardless of asset class. Remaining patient is an underrated skill in achieving returns.

@pantsgaming759 2 ай бұрын

pretty sure nab discontinued that, if only they didnt

@imranhussainfca 2 ай бұрын

Nifty has given 15 percent return for the last decade. 50 percent leverage makes it 30 percent. Investment from Australia is possible through etf. Please use that and lets see the results.

@AusPropertyMasteryWithPK 2 ай бұрын

This modelling is not about sharing exceptions. Did you watch the whole video? I can share investment properties that have double in 2 years. It’s about sharing averages which is what most people achieve.

@imranhussainfca 2 ай бұрын

I think there is a fundamental difference that you are missing. A company keeps reinvesting profits and value of share grows by expansion of value while a property value is a pureplay supply and demand question. Your money is locked in one particular suburb in a one particular house and you have no access to your money during emergency. Some one with a portfolio of 1mn can sell it in one day and buy a property but the other way around is really difficult. If your point is that Australian shares give poor yield then i completely agree. You can and should invest in emerging markets like India which has given great returns from stock market. As for leverage if you dont know how to get 80 percent leverage from bank it does not mean it doesn't exist. Nab gives me 80 percent leverage. Dividend stocks are probably worst because those companies are not investing back cash

@AusPropertyMasteryWithPK 2 ай бұрын

I think best you rewatch it. You are right, stocks have better liquidity which is also a double edged sword with volatility. The rest you stated was already discussed. Without dividend re-investing, stocks perform even worse. If you have a model for nifty and the tax consequences would you mind sharing the link if you think it’s better please?

@imranhussainfca 2 ай бұрын

If this was true then logically the property market as a whole should be bigger in size than the market capitalisation of stock market. We see that property market is fraction of its size. If this was true then property managers and buyers agent would be making more money and in more demand than money managers because property is giving better yield. I calculated for Werribee a recent property was sold and it returned 5.89 percent compounded and it was a landed property. A simple bond investment of 7 or 8 percent with 50 percent leverage could have given far superior returns

@AusPropertyMasteryWithPK 2 ай бұрын

The property market is indeed larger than the Australian ASX market cap my friend Werribee is not a good location.

@janla9891 2 ай бұрын

Can you please share the link to the financial model to download pls

@brendancolley7353 2 ай бұрын

Hi, if you send me your email address I can send it through.

@nq6417 2 ай бұрын

Property and equities are generally about the same return at 8-10% and you can find leverage at 95% for equities and property as well. Property Drawdowns come in cycles and are shallow compared to equities with a 150 year sample size too. Also, the government has a vested interest in ensuring that our housing markets keeps rising. It’s not leverage or returns. Drawdowns are the key

@venomsixxx Ай бұрын

What’s a drawdown

@nq6417 Ай бұрын

@@venomsixxx drawdown is the % drop from peak to trough. For example, If the high median price in Sydney was $1M, and then the lowest median price in the cycle turned out to be $900k, then that cycle had a 10% drawdown. During the GFC, equities had a drawdown of >50%. Australian Property had an 8.5% drawdown over the same period. A shallow drawdown is very important when it comes to testing your emotional intelligence during a drawdown. That’s why property is the preferred vehicle. It’s not the return or the leverage. It’s the drawdowns. Now you know what 99% of investors have no idea about and makes all the wealth.

@susmusmanoj112 2 ай бұрын

Whete can we get the link for the excel file Brendon ? Do u have an email ID ?

@Finndersen 2 ай бұрын

The cash loss after tax calculations seem to be wrong? Also, this comparison doesn't make sense because it's ignoring the yearly losses of holding the property - the share balance needs to be increased each year by the same amount to allow comparison. If this was included along with the existing assumptions, then shares will win

@AusPropertyMasteryWithPK 2 ай бұрын

That was mentioned, and also in the model on shares assumptions areas, can toggle in and off

@brendancolley7353 2 ай бұрын

As PK mentions, there is the ability in the model to include the equivalent cash losses required to hold an IP in the share portfolio. I’m comfortable the after tax calculations are correct.

@Finndersen 2 ай бұрын

Thanks, ok but that option was never enabled for this comparison? And for the tax numbers I'm looking at that first year with 17,617 losses and 5,637 tax deduction coming out to 9,479 which doesn't seem to add up? Appreciate the analysis

@brendancolley7353 2 ай бұрын

@@Finndersen Depreciation of $2,500 is added back to the after-tax loss because it's a non-cash deduction.

@Finndersen 2 ай бұрын

@@brendancolley7353 i see, cheers

@jamesm6341 2 ай бұрын

You can use stocks to build up a property deposit.

@AusPropertyMasteryWithPK 2 ай бұрын

This was covered. 👍🏼

@TheAssaschan 2 ай бұрын

I’m starting with crypto to make 70% of my retirement amount, and then using real estate to get to that last 30% over the next 10 years. Would love to know your experience/opinion on crypto, PK.

@AusPropertyMasteryWithPK 2 ай бұрын

Hey :) im sorry im not expert on crypto and don’t want to give you bad advice

@southern-sunshine 2 ай бұрын

Without sharing link to the excel model which was used, it does not make any sense. There are lot of variables used here to suit one kind of investment over the other. If you torture statistics enough, it will tell what you want to hear !!!

@AusPropertyMasteryWithPK 2 ай бұрын

It’s just a logical model where you can change the assumptions, in the fb group you can ask Brendan for the link. Have you built your own too?