[bbcbasic]

I am planning a transition from middle class to capital class, which will take 10-20 years and require investing in real estate.

Real estate is a great investment (at least in Australia) because it allows you to get access to larger amounts of credit to purchase assets which will generally go up in value over time because of the policies of central banks to target inflation. In addition buying in the right location will insure that on top of location future scarcity will add more value to the investments.

It is also super transparent compared to stocks, where you don't really know what is going on inside a company, land is land and all the data you need to assess the investment is available. And you can control the asset (think renovations, rebuilds, subdivisions etc.) so there is more you can do compared to the stock (buy, and perhaps short the similar stocks)

The downside to real estate is you have to be a little bit patient. Did I mention 20 years? :-)

[jtolmar]

I've heard that being too keen on real estate is a common pitfall for middle class investors. Between that and personal bias, I'm avoiding it (at least directly).

My portfolio is primarily stocks, which I find surprisingly easy to work with. You just pick well-run companies in fields you understand, ignore financial news, and wait. I should be capable of living off interest in four years.

[dba7dba]

I've heard that being too keen on real estate is a common pitfall for middle class investors.

I'm in US but I agree. I'm not old enough yet (I hope) but most of friends' parents lost all they had later in their life and from what I heard they were heavily into real estate. Some owned few houses and others worked as realtor.

For those that owned houses, they were extended too thinly and couldn't sell fast enough to cover mounting interest and cost when economy tanked, resulting in bankruptcy.

[bbcbasic]

I am not sure about the reasoning for real estate being a pitfall. Can you elaborate?