Here's a fun thought exercise… suppose you had an extra $100,000 lying around, where would you invest it?
A simple question, yet one that sparked a broad spectrum of responses when I recently asked it to 50 CEOs. From the predictable to the quirky, the answers painted a vivid picture of today’s current investment landscape.
So, without further ado, let's dive into their investment picks and, of course, my thoughts on each one! 👇
Real Estate: The King of the Hill
(56% of CEOs chose real estate)
First off, we have my personal favorite – real estate. It's clear that many CEOs share this preference, with 56% choosing it as their go-to investment destination. However, the types of real estate they mentioned varied widely, from single-family homes to condos and rentals.
This shows that many people feel comfortable with real estate as an asset class, which is great! BUT… it also raises an interesting question:
Why aren't more people mentioning multifamily real estate?
In my experience, single-family homes, condos, and similar investments can often be a bit of a hassle. They generally have a higher cost of entry, can involve a lot of hands-on management, and leave you vulnerable to complete income loss if the property goes vacant. It's a bit like putting all your eggs in one basket.
What many don't realize, however, is that multifamily real estate can be a far more lucrative and manageable investment. Better yet, you can get started with multifamily real estate with as little as $100K by becoming a passive investor.
Further down, I’ll explain why I think Multifamily Real Estate is the “King Of Investments”. But for right now, let’s talk about which investment vehicles came in second for our CEOs and founders.
Betting on Themselves: CEOs Double Down
(30% of CEOs back their own companies)
Okay, here's something intriguing: A whopping 30% of the CEOs said they'd put that imaginary $100,000 right back into their own business. Now, that's believing in your hustle!
So, what can we take from this?
These CEOs are their own biggest fans. They're putting their money where their mouth is and are ready to kick it up a notch. They back themselves to get bigger and better returns than in other vehicles.
Can’t blame them, can we? I mean, they’re CEOs for a reason!
Stocks: A Visit to Wall Street's Casino
(6% of CEOs pick stocks)
Next, a number of CEOs mentioned they'd drop their hypothetical $100K into stocks. Now, don't get me wrong, investing in stocks has an undeniable appeal. It's often seen as the typical entry point into the world of investment with its promises of high returns.
But here's my personal take: investing in stocks feels a lot like walking into a casino. You're placing your bets on companies, crossing your fingers, and hoping lady luck is on your side. You could win big or lose it all, and that's just too risky for my blood.
No wonder why only 3 of the 50 CEOs chose that as their pick!
Crypto: Gambling’s Wilder Cousin
(4% of CEOs chose crypto)
Next up in our list, we have cryptocurrencies like Bitcoin, Ethereum, and, (you guessed it), the infamous Dogecoin.
If we continue with our casino analogy and consider stocks as gambling, then cryptocurrencies are like playing Russian roulette, blindfolded. You could be that rare individual who walks away with the grand prize, or, much like many others, you could lose your entire investment in a matter of minutes.
Cryptocurrencies, with their tempting promises of huge returns, often steal the spotlight. But regardless, I advise EXTREME caution.
These digital assets are super unpredictable and mostly unregulated, which makes them pretty risky. And if you're new to investing, this can be a dangerous playground. For every story of someone becoming a millionaire overnight with crypto, there's another story of someone who lost it all.
Be careful with this one.
Unconventional Picks: The Investment Wild Cards
(4% of CEOs opted for other investment vehicles)
Lastly, we’ve got the wild cards… the off-the-beaten-path kind of investments that break away from the usual.
These Investments ranged anywhere from collectible trading cards to properties in exotic locations like Costa Rica. If anything, this served as a vivid reminder that there's definitely more than one way to invest your money!
Why Multifamily Real Estate Is The King Of Investments
Now, before I tell you why I believe multifamily real estate is the undisputed champion of the investment world, I want to share some hard numbers with you to show that I'm not just whistling Dixie here.
Check out the recent returns our investors earned at KRI partners.
Belle Rive Club: 22% in annual investor returns
Coachman Club: 30% in annual investor returns
Whispering Oaks: 36% in annual investor returns
These figures aren't just numbers; they're tangible proof of why multifamily real estate can be an excellent investment. Here's why I consider it the 'King of Investments':
Relatively Stable, Consistent Cash Flow
First, real estate (specifically multifamily real estate), offers relatively more stable, consistent cash flow. Your tenants pay their rent every month, and after paying expenses the left over money goes straight to your pocket. Even if a few units are vacant, you're still earning money from the other occupied ones.
Provides Some Risk Diversification
Secondly, multifamily properties naturally spread out risk. Instead of sinking all your money into a single stock or a lone single family home, you're distributing it across multiple units. If one tenant moves out, it's not the end of the world because you will likely have others providing steady income.
Economic Downturn Resilience
Additionally, real estate, especially multifamily properties, tends to be more resilient during economic downturns and recessions. Stock markets might crash, and businesses may shutter, but people will ALWAYS need a place to live.
Demand, Appreciation, and Location
Finally, consider the demand and appreciation factors. Some areas, Florida for example, are seeing significant population growth. When population growth outpaces housing, demand increases. And when demand increases, it follows that the value of your property will likely increase.
Wrapping Up: Your Money, Your Call
At the end of the day, where you choose to invest $100,000 is a personal decision. It should align with your financial goals, risk tolerance, and overall comfort.
I’ll always stand by multifamily real estate for its ability to generate income, risk diversification, and appreciation potential, especially in growth areas like Florida…
But where would you invest your $100K? What strategy would you use to turn that sum into more?
I'd love to hear your thoughts!
Disclaimer: This is not an offer to buy or sell any security.
All investments involve risk and may result in partial or total loss. Past performance is not indicative of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. Prospective investors should carefully consider their investment objectives, risks, charges and expenses, and should consult with a tax, legal and/or financial adviser before making any investment decision.