ETF Shares vs property - old debate new calculator

using the index ( say the ASX top 200 ) has it's own problems , the ASX 200 in 2000 is a very different bundle of shares to the ASX 200 of January 2021

think of it as comparing the top 200 most valuable properties on the Gold Coast in QLD in 2000 and then again in 2021 , land not previously developed now features prominently , properties repurposed have improved or fallen completely from the list ,


these statistic comparisons are entertaining , maybe even ego-boosting but are they a fair comparison of returns

and IF say comparing share stocks how do you treat companies such as BHP ( has spun-off S32 in recent years ) , WES has spun-off COL , NAB ( spun off CYB , now VUK ) and the list of variations ( additions and deletions ) go on an on

but yes the NASDAQ has outperformed the ASX if using the current index compared to 20 years ago but that is NOT a reflection of div. yields from both ( the ASX might be superior in that factor )

 

I am in the midest, considering Refinancing hence potential equity pull

Our share portfolio is nowhere close to property one however with the potential rental we may be able to get more loan for an IP than equity investment.

Tenants play a key role in IPs and ongoing expenses compared to simple index investing.

Aim is not to do active DR ans just pull as much as we can and ckeep claiming the interests....

So property vs Shares....indeed

 

$200,000 of saving with serviceability of $800k loan give us opportunity to buy IP worth $1,000,000. IP growth 8% per annum make $2,000,000 price. Total profit $1,00,000 (loan paid off 800k, deposit retun $200k).

$200,000 investments in shares/etf growing at 14% per annum make $740,000. Total profit $540,000

 

small print minus any holding costs...

 

14% is arbitrary but I know what you mean....

 

More than 50k of your savings wil be gone in stamp duty and acquisition costs. It is unlikely income from a property @ 80% LVR will service a $1,000,000 loan. A 40% LVR is more with in the realms of reality. It is difficult to get CG from property sale @low tax rate, $1,000,000 may result with 750k after tax and 550k after deposit return. If you bought a 400k property and, took 150k equity to buy shares, the growth and growing income from shares and positive cash flow rather than negative will give you the ability to buy as many properties as you want. You wont have to, liquidate to access wealth, or slave away to make up shortfalls. With shares you can strategically sell and get your starting capital back or effectively lower your cost base, effectively giving higher leverage on starting capital.

 

Stocks to Real Estate Ratio

The Stocks to Real Estate ratio divides the S&P 500 index by the Case-Shiller Home Price Index. Just like Market Cap to GDP, the Stocks to Real Estate ratio has an interesting historical track record and clearly shows the stock market bubbles of 1929 and 1999.
The Case-Shiller Home Price Index seeks to measure the price of all existing single-family housing stock. Based on the pioneering research of Karl E. Case and Robert J. Shiller the index is generally considered the leading measure of U.S. residential real estate prices.

 

Sorry, crashed.