Should I Choose Real Estate or 401K Investment?

401K or Real Estate investing? Credit to Realtor.com

To answer this question is depend very much on who you are, in this case, whether you are:

- risk avoided or risk taker, since real estate and 401K are two different types of business or investing.

401K is retirement plan (benefits) provided by employers in the USA with certain requirements such as full employment status and length of service.

Employee may contribute a percentage of her or his income (deduced per-pay check), and employers match with some percentage, usually around 5%.

This investment is a kind of saving for future use (when retired).

Real estate investing is a pure business where the risks depend on several factors, few of them are:

- a location

- a population

- financial perks

- market trending

- a long term appreciation.

A property for sale

We observed many success stories and create many millionaires of real estate investing, but, some investors faced bankruptcy as well.

Moreover, advantages of 401K:

# Capital gain tax

# Doing nothing for financial security when retirement.

# Protected from creditors when we have financial troubles.

Dis-advantages of 401K

# No flexibility. We can’t use leverage to use “mortgage” to buy homes or loan to buy equipment and hiring employees.

# Government set up a lot of rules about 401K: how much contribution, what investments types in 401K and when to take money out of 401K

Finally, it is up to you to decide whether to invest in real estate or 401K. What do you think?