What I Wish I'd Known About Real Estate

'Real world' lessons... The wealthy often own a lot of different things... Real estate is local... No better time to look at this market... What I wish I'd known about real estate... Don't miss Steve Sjuggerud's must-see real estate event...

This classic piece of advice from Porter got me thinking...

About a year ago, Porter responded to a subscriber in the mailbag, writing about how buying a home was still a great long-term bet to grow your wealth...

And every one of the reasons our company's founder explained back then (low interest rates, leveraging the power of credit in our economy to your benefit, and shielding yourself from inflation) are even more timely and powerful in today's pandemic world...

If you're interested in learning, in plain English and using simple numbers, about what to consider when deciding whether to buy a home, we urge you to read Porter's thoughts in their entirety to get the full picture.

But these two lines from his essay really resonated with me (Corey McLaughlin) in particular...

I believe the purpose of saving and investing is to provide financial security – not to own a home or any other asset.

However, for a lot of people, owning a home is a critical part of their financial plan.

Man, I wish I'd read this before I entered the 'real world'...

You see, it's pretty much a long-shot miracle that I'm writing to you in the Digest today...

The older generations of my family, as far as my brother and I knew as kids, were financially illiterate.

Even if anyone did know anything about budgeting, investing, or planning, we never heard about it.

I only started to realize this was a significant issue in my late teens, when I began hearing stories and perspectives from people outside my family about life.

That was around the same time I started getting paychecks from summer jobs...

What should I do with the money?

Where I grew up on Long Island, I was fortunate to be exposed to wealthy (and poor) people, and successful (and struggling) businessmen and women of various backgrounds. (It's not all Hamptons and glitz.)

Then, in my initial writing jobs as a young 20-something, I found myself in these folks' offices or taking their time on the phone. A coach who used to be a Wall Street broker... A CEO of a startup... A small-business owner...

The work I was doing was like a crash-course on everything. And while doing my job, I also took mental notes about the longer-term lessons they shared that didn't fit with that day's topic... (Though, looking back, I wish I wrote them all down.)

In any case, I started to connect the dots during my downtime...

The stories these people told about their career paths often included narratives about someone close to them at least introducing them to their eventual line of work. "Otherwise, I have no idea where I'd be," I heard more than once.

The same idea often applied to money and basic financial or business education.

It started to make sense... As we wrote last December in the Digest, money – and how to handle it – is one of those "things they don't teach you in school."

Unless someone close to you takes the time to teach it, it's hard to know what you're missing...

The closest I had to a financial Yoda was a sixth-grade social studies teacher who went off-curriculum to tell us about stocks. And as I learned years later at his retirement party, he only did it because his position as the department chair allowed it.

I'm "getting personal" today because it's the best way I know how to get to the point... and explain something I didn't know, but wish I did back when I was 20 years old.

The wealthy often own a lot of different things...

I'm probably not saying anything new to longtime Digest readers or experienced investors, but it's worth a reminder anyway...

We've preached diversification in your stock portfolio over the past six months, as usual, as stocks and other assets have gyrated in value wildly amid the coronavirus pandemic and the latest period of social unrest...

And Porter has written in the past about the essential importance of asset allocation, position sizing, and risk management.

Well, the same points can be applied to everything that makes up your investable net worth – meaning all of your assets (like high-quality stocks that compound in value over the long term) minus all your liabilities (like any debt you owe via credit cards or mortgages).

In a well-allocated portfolio, beyond stocks, there's a place for bonds or gold... or a copyright to a product... a piece of a business... your own business... or a sector that we haven't covered in detail in Stansberry Research's two-decade history – real estate.

You see, for 20 years, Stansberry Research has published a variety of financial newsletters... but our staff never knew the best way to develop one that focused solely on real estate.

Frankly, it's not easy to put together a consistent stream of information and opportunities in real estate that benefits a large enough group of people like our readership.

Buying land, a home, or a building isn't like buying a stock or a bond on a single exchange for a recommended price during a specific time.

Real estate is local, after all...

Values of land and buildings are different literally everywhere.

Here in Baltimore, for example, you can find million-dollar homes and boarded-up, crumbling rowhomes on the same street just a few blocks apart.

At the same time, real estate is a massive industry. In the U.S. alone, the residential real estate market is more than $27 trillion, and the commercial real estate market is more than $15 trillion.

And the main idea of this old wisdom from steel-industry pioneer Andrew Carnegie still applies today... "Ninety percent of all millionaires became so through owning real estate."

A Federal Reserve survey in 2016 found that homeowners in the U.S. have a net worth 44 times higher than renters.

But there are many nuances – including geography and demographics – that investors must consider before putting money into any piece of real estate.

And in our business, we send content to 130 countries all across the world. How could we possibly cover real estate in a comprehensive way that benefits the most subscribers?

It has been a tough question to address, but we've finally found the answer...

We're excited to say that True Wealth editor Dr. Steve Sjuggerud and his research team have been working hard over the past few months to put the finishing touches on just the right real estate investing approach for today's market...

And Steve is excited to finally share all the details next Wednesday, June 24, at 8 p.m. Eastern time during a totally free event. (You can sign up right here.)

We have more information and investment possibilities in the real estate sector at our fingertips today than ever before. But it can hard to understand it all, know where to look for smart investments that give you the best chance to grow your wealth, and know who to trust for real, actionable recommendations.

To that point, Steve will give away his No. 1 way to invest in real estate today and will be joined Wednesday night by a panel of real estate experts, including Kendra Todd, a former winner of The Apprentice. And they'll have a lot to talk about...

The truth is, there might not be a better time to explore the opportunities in real estate...

Chris Igou, one of the analysts on Steve's team, explained why in Tuesday's Digest and in a Masters Series essay last weekend.

He detailed that supply is about at its historical average and demand is booming for homes... even as COVID-19 has secluded most of the country in lockdowns recently.

Anyone who has been paying attention to the real estate market over the past few months realizes all the tailwinds the industry has going for it...

First off, rock-bottom, all-time-low interest rates are spurring all kinds of trends – from homebuying to refinancing for those who can afford it. As Chris wrote on Tuesday...

Mortgage rates have rarely been lower. And that means it's extremely cheap to borrow money for a home today.

As more and more people take advantage of these low rates, it will keep demand steady. And it's yet another tailwind for the housing market in the coming months and years.

What's more, some data already show that the pandemic may be accelerating or restarting a more local trend of folks from cities heading to the suburbs. For instance, home searches in suburban zip codes jumped 13% in May, according to Realtor.com.

Anecdotally, we've heard from a few friends fleeing New York City for the 'burbs.

This brings me to the idea that Porter's feedback response about real estate reignited in my mind...

I wish I'd known about this idea or had the fortitude to apply it when I got out of college... or better yet, when I was in college.

If I had to do it all over again...

After crunching the numbers, I would have taken my savings, gotten a loan... and instead of paying someone else to live in a cheap apartment with a few friends... I would have bought the place myself, lived in it for "free," and had my friends pay me monthly rent.

The best assets are the ones that pay you... not the other way around.

I would have started building equity in the place right away. Sure, I'd have the headache and responsibility of actually owning the place and fixing things when they inevitably broke... or if the police were called on my partying-too-hard buddies.

Plus, I don't know if I would have still wanted to be a landlord (it can be painful) after I was ready to move out myself. But I believe now that the experience, if not the money made, would have been worth it.

As Porter explained in his response last July about real estate...

For most people who buy houses in areas that have both rising populations and rising wages, owning a home [or a property, in this case] can easily be one of the most important and best financial decisions they make.

Buying instead of renting essentially allows them to turn one of their biggest expenses – rent – into a form of savings.

Can I put a precise number on how much equity I would have in this imagined place today? No. Would I still own it? I don't know that, either.

But I'm confident my investment would have appreciated a good amount by now... And I'm pretty sure, in the long term, my net worth would be higher today – and in the future – because of it.

I'd be about 10 years ahead of the game, which might be the most valuable thing of all...

Time is something you can never get back...

It's the most valuable commodity there is. And it's inflation-proof and recession-proof.

Here's another example... the simple yet powerful idea of paying off a little bit of your mortgage ahead of schedule.

Adding an extra $100 or so a month to a regular mortgage payment can trim years off a 30-year loan, because of the compounding effect when subsequent interest payments each month go down.

A lot of people, even if they are able to do this, simply don't know it's an option. But it often is. I wish I knew that when I was in school, too.

But as they say, better late than never...

We're always learning, and we urge you to do so as well.

At the very least, the next time you come across someone who might need a little financial knowledge, share a nugget of wisdom with them. They probably need it.

Or share the opportunities to make money in real estate with someone young in your life.

And in particular, don't miss your chance to learn more about real estate investing from Steve next Wednesday, June 24, at 8 p.m. Eastern time.

You may know Steve for his advice about stocks, but you might not realize that he has put more of his investable net worth into real estate than any other investment.

He believes that once you know what to look for, real estate can be even more lucrative than the stock market – and less stressful. And today's setup in housing is one you don't want to let pass without consideration.

The presentation on Wednesday is totally free. We just ask that you sign up in advance. Click here for all the details.

(And Stansberry Alliance members, keep your eyes peeled on your inbox for more details about how you can access the information Steve will discuss beforehand.)

Where Money Is Hiding in the Market | Q&A With Jim Rogers

Our international editor Kim Iskyan chats with legendary investor Jim Rogers about where he sees money hiding in the market today.

Click here to watch this video right now. And for more free video content, subscribe to our Stansberry Research YouTube channel and follow us on Facebook, Instagram, and Twitter.

New 52-week highs (as of 6/18/20): Amazon (AMZN), BlackLine (BL), Electronic Arts (EA), Match Group (MTCH), Spotify Technology (SPOT), The Trade Desk (TTD), and Vanguard Inflation-Protected Securities Fund (VIPSX).

In today's mailbag, feedback on Marc Andreessen... a theory based off Mike Barrett's Digest essay about spotting the next post-recession winners... kudos for Woody P.'s comments in yesterday's mail... and a mix-up of Mike Barretts. Do you have a question or comment? Send it to feedback@stansberryresearch.com.

"Regarding the mention of Marc Andreessen in [Wednesday's] Digest, he is not only a famous venture capitalist, but also a famous computer scientist and entrepreneur. His NCSA Mosaic and Mozilla web browsers are the parent of all web browsers today. What pretty much everyone in the world uses to view the web is a descendent of his work. Andreessen is an innovator." – Paid-up subscriber Jeff C.

"[As Mike Barrett said in yesterday's Digest...]

And although it's hard to see right now, we will recover from this pandemic. And as we do, the stage will be set for the market's next big winners.

"Here is an insight I've noticed from observation: The Coronavirus has taken over the Fed's role as the primary disruptor of the economy. Trump has neutered the Fed, so it is no longer raising interest rates or reducing liquidity in order to crash the economy, like it did in 2008 and 2001. Instead, the medical authorities are now the ones charged with destroying the economy." – Paid-up subscriber O.P.

"Sign Woody up!!! It was great for laughs and the serious thoughts imbedded within." — Stansberry Alliance member Chris R.

"Received your [Digest] referencing Mike Barrett. My first reaction was that you had a program that inserted subscriber names into articles until I found the name at the end of the article. Mike Barrett, Florida. HA HA." – Paid-up subscriber Mike Barrett, Idaho

All the best,

Corey McLaughlin
Baltimore, Maryland
June 19, 2020