Where to invest Real estate or MF?
- Thread starter bajajdipesh
- Start date
Hi Dipesh,
A very interesting question that seems to haunt most of the 20+ and 30+ somethings (including yours truly). My answer to your question is both.
Real Estate is seriously long term where your minimum term may be around 10-20 years before you make some serious money of it. Only in a very specific cases, there is appreciation in short term, but thats a minority. If you are talking about serious money, then you need to bide your time.
One rejoinder to the above point is that when we talk of Real Estate, we should be talking of investment and not the appreciation that the flat (where one resides) undergoes. That's paper money and can't/shouldn't be liquidated. What good is a investment if one doesn't have a roof over the head?
MF is good in short, medium and long term. The advantage of MF is it's adaptability (it's not easy to sell one site and buy another as compared to selling one MF and buying another), Liquidity and ease of operation.
My choice, Go for both.
Happy Investing !!
A very interesting question that seems to haunt most of the 20+ and 30+ somethings (including yours truly). My answer to your question is both.
Real Estate is seriously long term where your minimum term may be around 10-20 years before you make some serious money of it. Only in a very specific cases, there is appreciation in short term, but thats a minority. If you are talking about serious money, then you need to bide your time.
One rejoinder to the above point is that when we talk of Real Estate, we should be talking of investment and not the appreciation that the flat (where one resides) undergoes. That's paper money and can't/shouldn't be liquidated. What good is a investment if one doesn't have a roof over the head?
MF is good in short, medium and long term. The advantage of MF is it's adaptability (it's not easy to sell one site and buy another as compared to selling one MF and buying another), Liquidity and ease of operation.
My choice, Go for both.
Happy Investing !!
Hi asterix24,
Thanks for your input. Some of your inputs regarding MF especially like ease of liquidation is really appreciable.
However, as you told most of 20+ or 30+ have this doubts in mind. All my friends are investing in real estate, but actually they are buying homes so that anyways does not count as investment but it created doubts in my mind. Now I have some clarity.
I believe that in the long run equity beats any other asset class. So, I have started investing in MF thru SIP routes.
I have doubts regarding dividend / growth options. I have opted for dividend payout options however ppl says growth option is always better. But for growth options I think one needs to have proper exit strategy. On the contrary, dividend option partial profit booking happened every time the dividend is declared. Even though dividend options have tax implications still I think dividend option is better.
Can you give some insight regarding the same?
And one more request I will post my portfolio in the next post and will really appreciate your inputs for the same. Thanks.
Thanks for your input. Some of your inputs regarding MF especially like ease of liquidation is really appreciable.
However, as you told most of 20+ or 30+ have this doubts in mind. All my friends are investing in real estate, but actually they are buying homes so that anyways does not count as investment but it created doubts in my mind. Now I have some clarity.
I believe that in the long run equity beats any other asset class. So, I have started investing in MF thru SIP routes.
I have doubts regarding dividend / growth options. I have opted for dividend payout options however ppl says growth option is always better. But for growth options I think one needs to have proper exit strategy. On the contrary, dividend option partial profit booking happened every time the dividend is declared. Even though dividend options have tax implications still I think dividend option is better.
Can you give some insight regarding the same?
And one more request I will post my portfolio in the next post and will really appreciate your inputs for the same. Thanks.
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Hi Dipesh,
Real-Estate investment is a tedious process and is definitely for long-term. If you want an investment vehicle that can give you say 20x returns over a 20 year period, it is only Real-Estate. There are multiple ways of looking at the same.
As I said earlier, your house doesn't count as an investment. However, if you buy an additional home and rent it out, then you can consider that as an investment. However, the appreciation a flat undergoes is dependent on the area and demand for the same. For example, if you buy a flat in CBD (Central Business District), definitely you will get a good appreciation. But, do you have enough funds to buy the same?
Alternatively, go for plots. This is definitely tedious, but consider buying plots from Co-operative socities of a PSU employees' association or some reputed builder who is developing a gated community. This will definitely give you some good opportunities. In your next post, do post your location too.
Coming to your question in this post, Growth and Dividend are for different purposes. Dividend Payout is basically getting a dividend at a periodic interval. Your corpus does undergo appreciation, but is pegged back by the dividend. This is helpful for those who are risk-averse (namely our parents etc). As a youngster, unless you are dependent on the dividend as income for your livelihood, you don't need to consider a Dividend Payout option.
Money grows when it is allowed to grow over a period of time. Hence, the money that you receive as Dividend if was invested, will give you a huge return when you actually benefit from equity appreciation. For harnessing the power of equity, you should leave your money untouched. I would definitely suggest that go for growth option and leave your money in MF where it will grow.
For exit strategy, refer to one of the other posts I had commented recently. Exit only when you have a necessity. Don't exit when you have made 25% or 30% etc. Leave your money to grow unless you require it urgently.
Do post your portfolio. I will share my views on the same.
Happy Investing !!
Real-Estate investment is a tedious process and is definitely for long-term. If you want an investment vehicle that can give you say 20x returns over a 20 year period, it is only Real-Estate. There are multiple ways of looking at the same.
As I said earlier, your house doesn't count as an investment. However, if you buy an additional home and rent it out, then you can consider that as an investment. However, the appreciation a flat undergoes is dependent on the area and demand for the same. For example, if you buy a flat in CBD (Central Business District), definitely you will get a good appreciation. But, do you have enough funds to buy the same?
Alternatively, go for plots. This is definitely tedious, but consider buying plots from Co-operative socities of a PSU employees' association or some reputed builder who is developing a gated community. This will definitely give you some good opportunities. In your next post, do post your location too.
Coming to your question in this post, Growth and Dividend are for different purposes. Dividend Payout is basically getting a dividend at a periodic interval. Your corpus does undergo appreciation, but is pegged back by the dividend. This is helpful for those who are risk-averse (namely our parents etc). As a youngster, unless you are dependent on the dividend as income for your livelihood, you don't need to consider a Dividend Payout option.
Money grows when it is allowed to grow over a period of time. Hence, the money that you receive as Dividend if was invested, will give you a huge return when you actually benefit from equity appreciation. For harnessing the power of equity, you should leave your money untouched. I would definitely suggest that go for growth option and leave your money in MF where it will grow.
For exit strategy, refer to one of the other posts I had commented recently. Exit only when you have a necessity. Don't exit when you have made 25% or 30% etc. Leave your money to grow unless you require it urgently.
Do post your portfolio. I will share my views on the same.
Happy Investing !!
Hi Dipesh,
If you have a total of 25000, consider splitting this into 3 categories - Large & Midcap, Multi-cap, Mid and Small Cap.
You can consider the following suggestion:
Large and Mid cap (40%) - 10000
HDFC Top 200 - 5000
DSPBR Top 100 (D) - 2500
DSPBR Top 100 (G) - 2500
(Note: I am reusing your funds. If possible, switch out one of the funds and consider adding either Fidelity India Growth or Franklin India Bluechip - I prefer the latter!!)
Multi-cap (30%) - 7500
HDFC Equity - 5000
Quantum Long Term Equity - 2500
Mid and Small Cap (30%) - 7500
ICICI Pru Discovery - 5000
HDFC Mid-cap Opportunities - 2500
I have reused your existing funds to the maximum. Hope this helps your investment strategy.
Happy Investing !!
If you have a total of 25000, consider splitting this into 3 categories - Large & Midcap, Multi-cap, Mid and Small Cap.
You can consider the following suggestion:
Large and Mid cap (40%) - 10000
HDFC Top 200 - 5000
DSPBR Top 100 (D) - 2500
DSPBR Top 100 (G) - 2500
(Note: I am reusing your funds. If possible, switch out one of the funds and consider adding either Fidelity India Growth or Franklin India Bluechip - I prefer the latter!!)
Multi-cap (30%) - 7500
HDFC Equity - 5000
Quantum Long Term Equity - 2500
Mid and Small Cap (30%) - 7500
ICICI Pru Discovery - 5000
HDFC Mid-cap Opportunities - 2500
I have reused your existing funds to the maximum. Hope this helps your investment strategy.
Happy Investing !!
Thanks Asterix,
I have certain queries though.
1. Do you think Dividend option is okay? What is the tax implication for dividend option when DTC will come into effect?
2. I personally prefer dividend option since I think it autometically keeps booking profit without to worry abt exact time for exit. What is ur opinion?
3. How is IDFC premier equity as compared to icici pru discovery?
4. If existing portfolio should not consider then what portfolio you will suggest?
5. I want to start SIP in gold also. Which etf you will suggest?
6. Also, I need to invest in one ELSS scheme for tax saving. Considering right now Fidelity tax saver fund. Any opinion?
7. Also, from value research suggested portfolio for long term wealth creation is as follows
http://valueresearchonline.com/story/h2_storyView.asp?str=17133
Ur opinion on the same?
I have certain queries though.
1. Do you think Dividend option is okay? What is the tax implication for dividend option when DTC will come into effect?
2. I personally prefer dividend option since I think it autometically keeps booking profit without to worry abt exact time for exit. What is ur opinion?
3. How is IDFC premier equity as compared to icici pru discovery?
4. If existing portfolio should not consider then what portfolio you will suggest?
5. I want to start SIP in gold also. Which etf you will suggest?
6. Also, I need to invest in one ELSS scheme for tax saving. Considering right now Fidelity tax saver fund. Any opinion?
7. Also, from value research suggested portfolio for long term wealth creation is as follows
http://valueresearchonline.com/story/h2_storyView.asp?str=17133
Ur opinion on the same?
Last edited:
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