Nathaniel Thiele

What is the greatest wealth builder?

What asset creates the most amount of money for an individual or a family?

My thought is that stocks, private business, and high-income paying jobs have created the most wealth in America.

Conversely, I think real estate is one of the greatest wealth destroyers. What I mean by that is real estate is a hard business to make billions or millions in. Most billionaires or millionaires do it as a business and are highly specailized. 

The Vanderbilts lost all their money due to real estate. They bought more houses than they could live in and waste money by build “trophy” houses. 

Historically the return of real estate is dwarfed by the returns of the stock market. The stock market is dwarfed by the returns of private businesses. 

Homes and real estate are both solid options for wealth building but I personally wouldn’t invest in rentals/real estate due to three factors.

-Illiquid

-Highly Leveraged

-Non-diversified

I don’t like something where I have no control over tenants’ behavior or payment information. In a private business, I can track revenue with accounting, engagement with social media, and behavior by surveys.

These are the main reason why I don’t invest in real estate instead focus my money on other assets.