That's why

Real estate offers rich investors superior, tax-advantaged wealth preservation through leverage, tangible asset control, and consistent cash flow, creating a robust hedge against inflation that the stock market cannot match. Unlike volatile stocks, property allows for 1031 exchanges to defer capital gains and provides steady, long-term appreciation. [1, 2, 3, 4, 5]  

Here is how to structure the conversation: 

1. The Leverage Multiplier (The "OPM" Argument) 

• The Pitch: "Stock market investments usually require 100% of the cash up front. Real estate allows you to use 20-25% of your money (leverage) to control 100% of an asset's appreciation". 

• Example: If a $1M property goes up 5%, you made $50k. If you only put $200k down, that $50k gain on a $200k investment is a 25% return, not just 5%. [7, 8, 9, 10]  

2. Tax Shielding and Wealth Preservation 

• The Pitch: "Stocks are taxed heavily on dividends and capital gains. Real estate offers depreciation (a non-cash expense that lowers taxable income), mortgage interest deductions, and the ability to use 1031 exchanges to defer taxes entirely when trading up". 

• The Angle: It's not just what you make, it's what you keep. [4, 5, 11, 12]  

3. Tangible Stability vs. Volatility 

• The Pitch: "You can't live in a stock certificate. Real estate is a physical, income-producing asset that acts as a hedge against inflation—rents rise when inflation rises". 

• The Angle: It provides consistent cash flow (income) rather than relying solely on capital appreciation. [1, 2, 3, 13, 14]  

4. The "90% of Millionaires" Fact 

• The Pitch: "Historically, 90% of millionaires own real estate. It is the preferred method for long-term wealth preservation and wealth transfer to heirs". [1, 15, 16, 17, 18]  

Summary Table of Advantages 

| Feature [1, 5, 7, 13, 19] | Real Estate | Stock Market |

| --- | --- | --- |

| Leverage | High (5:1 or 4:1) | Low/Margin risks |

| Tax Benefits | High (Depreciation, 1031) | Low (Capital gains) |

| Volatility | Low (Tangible Asset) | High |

| Income | Consistent Cash Flow | Dividends (Variable) |

AI responses may include mistakes.

[1] https://www.realbricks.com/articles/90-of-millionaires-own-real-estate

[2] https://paladinrealty.com/resources/10-reasons-to-invest-in-real-estate/

[3] https://www.sunpro.realty/real-estate-vs-stock-market

[4] https://www.investopedia.com/articles/mortgages-real-estate/11/key-reasons-invest-real-estate.asp

[5] https://www.nerdwallet.com/investing/learn/real-estate-vs-stocks-which-is-the-better-investment

[6] https://www.stessa.com/blog/low-interest-rate-environment/

[7] https://moneyguy.com/article/stock-market-vs-real-estate-where-should-your-wealth-be-allocated/

[8] https://www.remaxwealth.com/insights/real-estate-investing-vs-stock-market-which-is-a-better-investment-for-canadians

[9] https://www.linkedin.com/pulse/rental-properties-worth-thomas-kopelman-3geoc

[10] https://allviewrealestate.com/how-to-finance-an-investment-property-with-leverage/

[11] https://www.investopedia.com/ask/answers/052015/which-has-performed-better-historically-stock-market-or-real-estate.asp

[12] https://www.instagram.com/p/DQxfRfrjMAa/

[13] https://www.rocketmortgage.com/learn/benefits-of-real-estate-investing

[14] https://estates61.com/en/469/the_smart_financial_choice_why_buying_an_affordable_home_beats_renting_in_2025

[15] https://www.realestateinvestorgoddesses.com/blog/7-reasons-you-should-be-investing-in-real-estate

[16] https://ca.finance.yahoo.com/news/warren-buffett-buy-hold-real-122000704.html

[17] https://www.renterswarehouse.com/education/real-estate-vs-stocks-why-real-estate-investment-is-a-safer-and-more-profitable-option

[18] https://blog.massmutual.com/retiring-investing/real-estate-wealth-transfer

[19] https://www.raisin.com/en-us/investing/real-estate-vs-stocks/

Henry McClure  
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