Real Estate 30-Yr Wealth
$1,764,546
Equity: $1,621,696 + Cash Flow: $142,850
Stocks 30-Yr Portfolio
$1,522,065
Compound Annual Growth: 9.5%
Terminal Difference & Leader
+$242,481 RE
Real estate leads by 15.9% due to 5x leverage
Net Wealth Trajectory (30-Year Horizon)
Total wealth comparison: Real Estate Equity + Accumulated Cash Flow vs. Liquid Stock Index Value
Real Estate Total Wealth
Stock Index Portfolio
Remaining Mortgage
Scrub Timeline: Year 10
Leader: Real Estate
RE Equity: $289,410
RE Cumul. Cash Flow: $18,420
Stock Portfolio: $247,823
Mortgage Balance: $322,460
Source-Grounded Trade-off Analysis
Insights synthesized from experienced investors, property owners, and index fund advocates:
Physical Real Estate
- Mortgage Leverage: $100k down controls a $500k physical property (5:1 leverage ratio) multiplying capital appreciation.
- Inflation Buffer: Fixed-rate mortgage principal and interest stay static while nominal rents and property values escalate with inflation.
- Frictional Drag: Vulnerable to tenant vacancy, non-payment, maintenance surprises, capex reserves, property taxes, and illiquid 6% exit commissions.
Broad Index Stock Funds
- 100% Passive Compounding: Zero tenant disputes, zero physical maintenance, zero late-night plumbing emergencies or local zoning risk.
- Frictionless Liquidity: Capital can be bought or sold instantly in minutes with negligible transaction costs and fractional precision.
- Global Diversification: Instantly hold thousands of world-class productive enterprises instead of concentrated risk in one physical building.
30-Year Comparative Ledger
Granular amortization, rental cash flows, equity growth, and stock portfolio compounding
| Yr | Property Value | Loan Balance | RE Equity | Net Rent (Annual) | Cumul. Rent | RE Total Wealth | Stock Value | Net Difference |
|---|