Investing – Property or Shares?

There has long been a debate about which is the better option – property or shares. With the lowest interest rates in history and many tax free Government incentives available, right now property is the winner.

Plenty of people who have invested in shares will tell you they have lost money on every share they have bought. As Bell Potter’s equity strategist Charlie Aitken said in a recent Australian Financial Review article, “You can live off shares, you can’t live in them”.

Everyone who has taken any notice of their superannuation over the years knows that stock market investing is, to say the least, volatile because there are safe stocks and risky stocks.

Residential property is a much safer investment as it is less volatile than shares and has returned 11.1% increase a year since the 1920s, once maintenance costs have been taken into account.

A large percentage of the purchase price can be borrowed to purchase investment properties. As such the investor will have very little of their own money committed to the investment.

Also it is much easier to negative gear property than to get a loan to buy shares. This results in greatly reducing the amount of taxable income each year.

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