As a female physician, I am challenging you to think beyond your clinical income for ways to grow your wealth. In previous episodes, we’ve discussed everything from investing to side hustles. Those income streams are critical, but it can take time to see a significant generation of wealth, especially from the stock market. That’s why it is so important to understand how real estate investing can help you uplevel your life and your money faster than you might imagine.
In the first episode of our Introduction to Real Estate series, we laid the foundation for real estate investing. Plus, I shared my first toe dip into real estate investing. Now, let’s take a deeper dive into what real estate investing looks like and the myriad options you have even if you’ve already decided that being a landlord isn’t for you.
There are two types of real estate investing--equity and debt. Most people are familiar with equity investing. That is when you own the actual real estate, at least to some degree. Most people think of a single family home rental property. That certainly is one example. Other instances of equity real estate investments include syndications, crowdfunding, and REITs.
Equity investing spans a spectrum of involvement, from active to passive. Direct ownership is the most active type of real estate investing. That means that you are involved in week-to-week and month-to-month aspects of property ownership and landlording. On the opposite end of the spectrum are passive investments, such as syndications, crowdfunding, and REITs.
Debt investing is the other type of real estate investing. If equity investing is similar to stock market investing, then debt investing parallels bond investments. In this instance, you lend capital, or money, to either an individual or a group, so that they can make a real estate investment. You are then paid interest monthly or quarterly, and after a defined period of time, your capital is returned. This is another passive and powerful way to make money through real estate investing. Especially considering the rate of return is usually much higher than what bond investments yield.
Whether you choose equity or debt investing, real estate is a powerful way to expand your portfolio and live a wealthy life.
In this episode, we also explore:
- A deeper dive into the differences between equity and debt real estate investing
- Ways to incorporate real estate investing into your retirement accounts
- Strategies to make direct ownership more passive
- The difference between syndications and crowdfunding
- A breakdown of REITS and how they work inside index funds like VTSAX
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Featured on the episode:
- Learn more about Semi Retired MD and enroll in their free video mini-course here.
- Check out this guide to understand how women can use real estate to achieve financial independence.
- Understand how much money you need to start investing in active real estate with the breakdown in this post.
Learn more about how to manage your mindset with Wealthy Mom MD.