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Double Your Net Worth: Why Real Estate Funds Outperform S&P500 Investments

S&P 500 index in red downward arrow with decreasing stack of coins. Bearish run market in United States US stock market. Why Real Estate Funds Outperform S&P500 Investments

Investing is a crucial step towards achieving financial freedom. However, with so many investment options available, it can be challenging to determine which one is the best fit for you. In recent years, alternative investment options such as real estate have become increasingly popular. But why is real estate investing superior to investing in index funds like the S&P500?

First, let’s briefly explore index fund investing. An index fund is a type of mutual fund or exchange-traded fund (ETF) that tracks a particular market index, such as the S&P500. This means that when you invest in an index fund, you’re essentially investing in a diversified basket of stocks that represent the market index being tracked. Index funds are popular because they provide exposure to a broad range of stocks, making them less risky than investing in individual stocks.

Now, let’s take a look at why real estate investing might be a superior alternative to index fund investing.

Tangible Asset

Real estate is a tangible asset, meaning it is a physical piece of property or land. This makes it easier to understand and evaluate, especially for new investors. In contrast, index fund investing involves buying and selling shares in companies that you don’t own, making it more abstract and difficult to assess.

Inflation Hedge

Real estate is a natural inflation hedge, which means that the value of real estate assets tends to rise in tandem with inflation. This is because, as the cost of living increases, so does the cost of construction and property maintenance, leading to an increase in the value of real estate. Index fund investing, on the other hand, doesn’t have the same inflation-hedging benefits.

Cash Flow

Real estate investments can provide steady cash flow in the form of rental income. With rental properties, investors can receive monthly rental income, providing a more stable source of cash flow.


Real estate investors can leverage their investments by using borrowed money to purchase properties. This allows investors to control more significant assets than they could with cash investments alone, potentially leading to higher returns. Index fund investing doesn’t provide the same leverage opportunities.

Tax Benefits

Real estate investors can take advantage of numerous tax benefits, including depreciation deductions, mortgage interest deductions, and property tax deductions. These benefits can significantly reduce the amount of taxes paid on real estate investments. In contrast, index fund investing doesn’t offer any significant tax benefits.

When it comes to investing in real estate, there are a variety of options for both active and passive investors. While active investing involves hands-on management of properties, passive investing allows you to invest in real estate without having to deal with the day-to-day responsibilities of owning and managing property.

One option for passive real estate investing is hard money lending. This involves lending money to real estate investors who need quick access to funds to purchase or renovate a property. As a hard money lender, you can earn a high rate of return on your investment, typically around 8%.

The investment is secured by the property, so if the borrower defaults, you have the right to foreclose and take possession of the property.

Another option for passive real estate investing is through real estate funds. These funds pool money from multiple investors to invest in a variety of real estate assets, such as apartment buildings, office complexes, and retail centers. The funds are managed by experienced real estate professionals, who handle the day-to-day operations and make investment decisions on behalf of the investors.

Real estate funds can offer diversification and access to larger, higher-quality real estate investments that may not be available to individual investors. There are several types of real estate funds, including REITs (real estate investment trusts), private equity real estate funds, and real estate crowdfunding platforms.

Overall, passive real estate investing can provide a way to build wealth through real estate without the time and effort required for active investing. By exploring different options, such as hard money lending and real estate funds, you can find the approach that best fits your investment goals and risk tolerance.

In conclusion, while index fund investing can be a great option for investors, real estate investing offers unique advantages that make it a superior alternative. Real estate investments provide tangible assets, inflation-hedging benefits, cash flow, leverage opportunities, and tax benefits.

If you’re interested in exploring passive real estate investing options such as hard money lending or real estate funds, our team at the Passive Wealth Show is here to help. With over 15 years of experience and a track record of delivering on promised returns, we have taken over $250 million and put it to work successfully for our investors.

Schedule a call with our team at to learn more about our debt strategy and how we can help you build passive wealth through real estate investing. We’re dedicated to demystifying alternative investing and helping you achieve your financial goals. Don’t miss out on the opportunity to build a lasting legacy through real estate investing.