How to Make More Money When the Stock Market Crashes
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Ever wonder what defines an investor? Wikipedia’s definition of an investor reads as follows “Any person or other entity (such as a firm or mutual fund) who commits capital with the expectation of receiving financial returns.” Sounds like a logical route. At some point in our adult life, we all make the very real decision between focusing on MANAGING our money vs WORKING to make money.
Achieving financial freedom is the ultimate goal. For most people, the missing part of the equation is, how long will it take ME to achieve it? Speaking for myself, I was able to fully manage my family’s capital at the age of 40. In 2013 I made “The Shift”, becoming a full-time investor. Investing in the stock market, and mutual funds/bonds is the common thing to do using IRS incentives through various IRA accounts.
Since I spent my entire adult career investing in real estate, I obviously felt in control when I made the conscious decision to cash out of the positions that my stock broker and I so strategically monitored and slowly grew throughout the years. Fortunately, I also had a strong network of people I could call on for additional investment consulting. I had made the decision to invest in and acquire real estate using our IRA funds. It was a life-changing choice that occurred at a monumental time in 2020.
Investment Consulting & Real Estate Investing
As we all know, the COVID-19 pandemic was arguably the most challenging time in recent history. So many questions and very few answers. Morning after morning, waking up to the market declining. Day after day, we were in the red zone. I went out on a limb, cashed out at the low, and invested in real estate. I chose to work with uDirect IRA Services, a clearing house that facilitates real estate acquisitions using a self-directed IRA account. Kaaren Hall, who I met in 2019, was instrumental in my ability to pull the trigger on the execution of my plan. Ms. Hall is a Self-Directed IRA expert and CEO of uDirect IRA Services and OCREIA. When it comes to investment consulting, uDirect is a great place to start.
Several of my friends, whom I consider savvy investors, thought I was crazy when I called my stock advisor and pulled a large portion of our portfolio out of the market, and invested in real estate. I guess there was merit to those thoughts since I was liquidating during the darkest period of the pandemic when the Dow hit one of its most rapidly declining periods. I literally sold almost at the very bottom. However, I felt I could do better with my family’s capital and I made the moves to ensure that I did.
As time went by, the market regrouped and stabilized. How much did I lose? How much did I gain? I decided to put an end to the unknown and create a case study. I needed to answer not only my own questions but to share my experience with investors who are drawn toward “easier” assets to manage, using the stock market, bonds, and mutual funds.
Key Takeaways
- Periods of market volatility can be great investment/diversification opportunities
- Partnering with financial institutions/advisors help to navigate economic uncertainties
- “Playing it safe” can leave you behind financially when markets recoup
Case Study – Real Estate Investment vs. Stock Market Investment
In times of economic crisis, many will cling to their portfolio without considering how reinvestment and diversification might put them ahead of the pack once the overall market stabilizes. Those with low-risk tolerance might consider the stock market to be a safer investment on the whole but market trends of the last several years have demonstrated a fundamental truth about investing in stocks—they are more volatile than real estate investments. Considering the inflation that has followed in the wake of 2020, one of the only sure-fire hedges has been real estate acquisitions. Below I will show you how keeping my portfolio untouched would’ve led to me missing out on a booming opportunity.
Key Takeaways
- Commercial real estate investing produces income dividends much higher than stocks and mutual fund investments.
- The outcome for stocks/mutual fund gains was inflated by the surge of the DOW.
- To ensure that your real estate dividends grow faster it can be crucial to partner with financial/property expert(s) to reduce your Net Operating Costs (NOI) as fast as possible
Continued Study for Real Estate Investment Consulting
Whether or not we recognize it, we are all investors of some sort. Unfortunately, too many investors don’t believe that residual income is possible at a young age. Countless investors get stuck in the traditional mindset of retiring between the ages of 58 for women and 63 for men.
I’m here to tell you that it’s possible to achieve this dream at a much younger age; I’m living proof! From the first residential deal I syndicated at the age of 21, I’ve focused my goals on achieving financial freedom on my own terms and I can detail how you can do the same.
In conclusion, I hope the readers of this case study understand the benefits of managing their IRA accounts with real estate investing. I can go on and on about real estate being one of the slowest moving commodities. However, we hope this case study empowers you to discover the investor within yourself, and how you can truly step outside the conventional way of investing. The best thing you can do for yourself right now is to work with an investment consulting firm like Money Management.
If you’d like to learn more about investment consulting, we encourage you to sign up for our Commercial Investment Debt Consulting (CIDC) course. Upon completion of our course, you will be empowered with the knowledge you need to help others make the right investments at the right time. We are always here to help you. Head over to our main site and learn more about the Money Management Investment Fund and how you can be a part of the future of real estate investing.