Shares or real estate, which of the investment will bring great profit in 10 years
Those who have money perfectly understands that making capital is only half the age is much more difficult to maintain existing funds.
The simplest option is to store money on a deposit, but if we talk about foreign exchange contributions, the percentage of them is usually lower than the inflation level and as a result your savings are depreciated.
Therefore, many potential investors are thinking about investments in real estate objects or on the purchase of shares of companies.
But at the same time, the question arises - what will bring more profit or real estate in the long run?
Comparison of investment growth during investment or real estate
To compare the increase in value, we take the cost of a square meter of housing in such a country as Poland and data on the cost of the American stock index S&P 500 .
The average cost per square meter of housing in Poland has increased by 103% in 10 years if you take into account the price in US dollars:
That is, we can say that on average, investment in real estate brought 10% per annum, excluding additional cost costs.
While the purchase of a portfolio of shares included in the S&P 500 index could bring 194% in ten years from 2015 to 2025:
That is, the profitability of investment in American shares is 19.4% per annum, which is almost twice the profitability of real estate investments, which is only 10% per annum.
But, in addition to price growth, such aspects as dividends and income from renting an apartment should also be taken into account, because it is precisely these indicators that investors are often oriented.
Comparison of income from shares and bonds
It is quite difficult to compare the profitability of shares and real estate, but still we will try to do this.
Given all the commissions, the profit from renting an apartment for long -term rental in Poland is 5% per annum from the size of investments:
For example, by renting an apartment worth 100,000 American dollars, you will receive about 5,000 rents, from which you need to pay 8.5% of the tax. That is, 4.6% per annum or 46% in 10 years remain pure.
If we talk about shares, then disintens that not all companies pay passive income here.
The average dividend payment for companies from the S&P 500 index in 2024 is only 1.2% or $ 1,200 with 100,000. But we should not forget about taxes, dividends in Poland are 19%, so $ 972 remain clean or pure 0.97% per annum.
It is clear that all calculations are quite approximate, and if you wish, you can form your portfolio only from shares with high dividend yield. In this case, it will be possible to raise pure dividend yield from 4% and higher.
Conclusion: From the analysis, it is clear that investments in the shares of companies definitely have higher profitability than investments in real estate.
In addition, real estate requires much more attention than investments in the action - the search for new tenants, repairs, payment of utilities, when real estate is not for rent.
Brokers for buying American promotions
Remember that any investment is associated with risks, so diversify your investments between different assets.