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Wealth Building Vehicles: Stocks, Real Estate, and Business Ownership Compared

• David (Viacheslav) Davidenko

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Your savings account is just a temporary pit stop, not a destination for building real wealth. In today's economy, simply storing money guarantees its gradual erosion through inflation—not growth. This episode dives deep into three powerful vehicles that can multiply your money exponentially compared to traditional savings.

We begin by exploring the stock market, which has never been more accessible. With fractional shares available through numerous apps, you can start investing with as little as the cost of your morning coffee. We examine how ETFs provide instant diversification for beginners, and why dividend reinvestment plans create a snowball effect that accelerates wealth building over time. For those hesitant to jump in, we discuss risk-free simulation platforms that let you practice before committing real money.

Next, we unpack the multi-faceted advantages of real estate investing, from the regular income streams and significant tax benefits to the powerful concept of leverage—using a relatively small down payment to control a much larger asset. Beyond direct ownership, we explore REITs and real estate syndications as alternative entry points that don't require substantial capital or landlord responsibilities.

Finally, we examine what might be the most transformative path: scaling a business. Unlike employment with capped earnings, a successful business offers virtually unlimited growth potential alongside unparalleled personal freedom. We discuss the importance of having a proven concept, strategically reinvesting profits, and treating your business as an investment vehicle that becomes a valuable asset in itself.

Whether you're just starting your wealth-building journey or looking to diversify your approach, this episode provides actionable insights into making your money work harder than you do. What small, manageable step could you take this week to begin exploring one of these multiplication vehicles?

📰 Read more about this topic in our latest article: https://sunrisecapitalgroup.com/why-saving-alone-wont-build-wealth-better-ways-to-let-your-money-work/

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Disclaimer: The content provided on this channel is intended for educational and informational purposes only and does not constitute investment, financial, or tax advice. We strongly recommend that you consult with qualified professionals before making any financial decisions. Past performance of investments is not indicative of future results. The information presented here is not a solicitation or offer to buy or sell any securities or investments. Our firm may have conflicts of interest, and we do not guarantee the accuracy or timeliness of the content provided. Investing involves risks, and you should carefully consid...

Speaker 1:

Welcome to the Deep Dive. Okay, let's get straight to it. You're someone who wants to build real wealth, right? And the simple truth based on what we've been looking at is that just letting your money sit there in a bank account, it's just not going to cut it anymore.

Speaker 2:

Exactly, I mean, having savings is crucial. It's a fundamental part of financial health, absolutely Right no-transcript want to dig into today. Well, three key ways to actually move beyond just saving. We're looking at stocks, real estate and building a business.

Speaker 1:

OK, so the goal here is to give everyone listening a clearer picture of each one, how they compare.

Speaker 2:

Yeah, exactly, Think of your savings account like a temporary pit stop. Useful sure.

Speaker 1:

But not the destination.

Speaker 2:

Precisely One source called it. An empty parking spot Provides that short-term security fine, but it's definitely not designed for the long haul, not for growth.

Speaker 1:

So we want to explore some effective vehicles for actually creating wealth.

Speaker 2:

That's the plan. Where should we start?

Speaker 1:

OK, let's jump into vehicle number one, investing in stocks. Now it's interesting because, as we noted, grant Cardone himself Well, he's expressed some skepticism.

Speaker 2:

About Wall Street, called it a casino. I think.

Speaker 1:

Yeah, but the material also points out that for a lot of people maybe especially if they're just starting out stocks can actually be a surprisingly accessible way to begin.

Speaker 2:

And what's fascinating there, I think, is how technology has just completely changed the game, Democratized it really.

Speaker 1:

How so.

Speaker 2:

Well, fractional shares, the ability to buy just a small piece of a share. It's available on so many apps now. It means you can literally start investing with I don't know a few dollars, five bucks, ten bucks.

Speaker 1:

That barrier to entry is just gone almost.

Speaker 2:

Pretty much the cost of learning about wealth creation. It's never been lower. You can learn with the price of a coffee, practically.

Speaker 1:

And it's not just about starting small, is it? Stocks offer something else really valuable Liquidity?

Speaker 2:

Yeah, that's a huge point Liquidity.

Speaker 1:

Explain that a bit.

Speaker 2:

Well, think about it like this If you suddenly needed cash right, selling some stock is generally way faster, much easier than, say, trying to sell a house. Okay, it's about how quickly you can actually get to your money, access it.

Speaker 1:

That flexibility, that's a big plus.

Speaker 2:

It can be Absolutely. And for you, the listener, wanting to gain knowledge efficiently but maybe feeling a bit overwhelmed. You know about picking individual stocks.

Speaker 1:

Yeah, where do you even start?

Speaker 2:

Right. Well, that's where exchange traded funds ETFs come in. They're a really powerful tool. Okay, etfs. What's the advantage? Diversification instantly. An ETF lets you spread your investment across a whole range of different industries or companies all at once.

Speaker 1:

So you're not betting everything on one horse.

Speaker 2:

Exactly. We're spreading your risk instead of trying to guess which single stock is going to. You know, shoot the moon.

Speaker 1:

And there are different kinds of ETFs.

Speaker 2:

Oh, absolutely. You can find ETFs tracking almost anything different sectors, growth strategies, dividend focus, stability. You can really fine tune your approach based on what you're interested in or comfortable with.

Speaker 1:

Okay, that makes sense. Now. You mentioned long-term growth earlier. How do stocks help there beyond just price increases?

Speaker 2:

Ah right, this is where the magic sort of starts to happen. Automatic reinvestment.

Speaker 1:

Like DRPs.

Speaker 2:

Yeah.

Speaker 1:

Dividend reinvestment plans Precisely.

Speaker 2:

Many brokers offer them. So when the companies you own shares in pay out dividends.

Speaker 1:

Which is like a share of their profits.

Speaker 2:

Yeah, instead of getting that cash in your account, the plan automatically uses it to buy you more shares or fractions of shares of that same company.

Speaker 1:

And over time.

Speaker 2:

Over time, this compounding effect kicks in. Your earnings start generating their own earnings. It can really snowball your wealth, especially over the long term. That sounds powerful, really stands out, especially for someone keen on learning. Even if you only start with a small amount in stocks, the educational journey itself is incredibly valuable. You start to understand how markets work. You learn about different companies, different industries.

Speaker 1:

You get a better feel for financial trends generally.

Speaker 2:

Exactly. And that knowledge isn't just stuck in the stock market silo, it's foundational. It helps with pretty much all your financial decisions down the road.

Speaker 1:

Okay, but what if putting actual money in, even a small amount, feels well a bit scary at first?

Speaker 2:

Totally understandable, and our source actually suggests a really smart first step for that, which is Using a stock market simulator.

Speaker 1:

Ah, like paper trading.

Speaker 2:

Yeah.

Speaker 1:

Virtual money.

Speaker 2:

Exactly. These platforms are often free. You can trade with virtual funds, get comfortable with how it all works buying, selling, seeing how things play out all without risking a single real penny.

Speaker 1:

That's a great way to test the waters, build confidence.

Speaker 2:

For sure. Learn the landscape before you commit your own capital. Okay, so, building on that idea of actively growing money, let's shift gears.

Speaker 1:

To the next vehicle.

Speaker 2:

Yeah, let's talk about a more tangible asset class, something that's historically been a cornerstone of wealth building real estate.

Speaker 1:

Right, and this is an area where Grant Cardone, specifically, has had huge success.

Speaker 2:

Definitely Now. We should acknowledge up front it typically requires a bigger initial investment than you know buying a few fractional shares.

Speaker 1:

Yeah, the barrier to entry is higher.

Speaker 2:

Generally yes, but the potential rewards can be really significant.

Speaker 1:

So what are the main benefits we're looking at with real estate?

Speaker 2:

Well, one key advantage is the potential for regular income, cash flow.

Speaker 1:

From tenants paying rent.

Speaker 2:

Exactly. If you own a property in a desirable location, you can often generate a steady stream of monthly cash from tenants, ideally enough to cover your mortgage payments and hopefully generate some profit on top.

Speaker 1:

Okay, consistent income. What else?

Speaker 2:

Taxes the tax advantages in real estate can be pretty compelling.

Speaker 1:

How so.

Speaker 2:

Well, for instance, depreciation. You can often deduct a portion of the property's value each year for wear and tear.

Speaker 1:

Even if the property's market value is actually going up.

Speaker 2:

Yes, it seems counterintuitive, but that's how the tax code often works for investment properties. It's like the government offers these incentives. You're almost partnering with them in wealth creation in a way.

Speaker 1:

Interesting and other deductions.

Speaker 2:

Oh yeah, you can usually deduct operating expenses like mortgage interest, property taxes insurance, repairs.

Speaker 1:

All of that can significantly lower your taxable income from the property. Okay, income and tax benefits. What about the asset itself?

Speaker 2:

Right Building equity. That's huge. Two main ways this happens.

Speaker 1:

Go on.

Speaker 2:

First, every time your tenant pays rent and you use part of that to pay down your mortgage principal, well, your ownership stake in the property increases. They're essentially buying the property for you bit by bit.

Speaker 1:

Okay, forced savings in a way.

Speaker 2:

Kind of and second, historically, in many areas, property values tend to appreciate over the long term, so the asset itself just becomes more valuable over time, passively building your wealth.

Speaker 1:

So you get income and potential long term growth.

Speaker 2:

It's a powerful combination. And there's one more concept that's really key in real estate Leverage. Exactly Leverage Using borrowed money, usually a mortgage, to control a much larger asset than you could afford with just your own cash.

Speaker 1:

So a smaller down payment lets you buy a much bigger property.

Speaker 2:

Right, you put down, say, 20 percent, but you get the potential returns and risks associated with 100 percent of the property's value. It's like using a small fulcrum to lift a heavy weight, amplifying potential gains and losses, of course.

Speaker 1:

Okay Now for someone listening who thinks direct ownership sounds great, but that down payment it's just too much right now. Are there other ways to get involved?

Speaker 2:

Yes, definitely. The source material highlights a couple of more accessible routes. First up, REITs.

Speaker 1:

Real estate investment trusts.

Speaker 2:

Mm-hmm, this really answers that question. How can I get into real estate without being a landlord or needing a massive down payment?

Speaker 1:

What are they?

Speaker 2:

Reits are basically companies that own, operate or finance income producing real estate Think shopping centers, apartment buildings, office towers, warehouses.

Speaker 1:

You buy shares in these companies.

Speaker 2:

Exactly Just like buying stocks, they trade on major exchanges.

Speaker 1:

Right.

Speaker 2:

And the interesting thing is, reits are typically required by law to distribute a large portion of their taxable income, often like 90%, to shareholders as dividends.

Speaker 1:

So you get exposure to real estate and potential regular income without the direct management hassle.

Speaker 2:

Precisely, it's a way to invest in large-scale real estate portfolios.

Speaker 1:

Okay, that's one option. What was the other one mentioned?

Speaker 2:

Real estate syndications.

Speaker 1:

Syndications. How do those work?

Speaker 2:

Think of them like investment partnerships A group of investors pools their money together to buy a much larger property than any one of them could likely afford alone, maybe a big apartment complex or a commercial building.

Speaker 1:

And someone manages this.

Speaker 2:

Usually yes. These deals are typically put together and managed by experienced real estate professionals or companies, often called sponsors or operators. They handle finding the deal, managing the property and executing the business plan.

Speaker 1:

And investors just provide capital.

Speaker 2:

Essentially, yes. They invest alongside the sponsor. These deals often have defined timelines, target returns and specific strategies for increasing the property's value before eventually selling it.

Speaker 1:

So another way to participate in potentially bigger deals without direct management.

Speaker 2:

Right Offers access to different types of opportunities, often with experts at the helm.

Speaker 1:

Okay, so real estate Lots to unpack there. Potential for income growth, tax benefits, whether you own directly or invest through things like REITs or syndications.

Speaker 2:

It's definitely a major pillar of wealth building for many.

Speaker 1:

Right, so let's transition now to our third path, and this is one that our sources suggest might have the greatest potential for wealth creation.

Speaker 2:

Yes, scaling a business.

Speaker 1:

This is the route many, many self-made individuals have taken Building something from the ground up.

Speaker 2:

And what's really compelling about owning your own business, compared to, say, a traditional job, is the earning potential.

Speaker 1:

It's not capped in the same way.

Speaker 2:

Exactly. In a job, your incurred is usually tied to a salary, maybe some bonuses. With a successful, scalable business, the potential for growth can be exponential. As you expand, reach more customers, offer more, your earnings aren't limited in the same way.

Speaker 1:

And it's not just about the money, is it? There's another big factor.

Speaker 2:

Freedom, creativity and personal freedom.

Speaker 1:

Tell me more.

Speaker 2:

Well as the owner. You have far more control over your time, over the big decisions, the direction of the company, how you work, when you work, what you work on.

Speaker 1:

That autonomy.

Speaker 2:

Huge, and if you're passionate about what your business does, that autonomy can be incredibly satisfying, way beyond just a paycheck.

Speaker 1:

Okay, unlimited potential, more freedom, what else?

Speaker 2:

Scalability, the potential to grow significantly. How does that work in practice? You can rapidly expand operations, reach new markets, maybe even replicate your success by opening new locations, franchising or launching related ventures. It's about building something that can grow beyond your direct personal involvement, hour to hour.

Speaker 1:

Right Building system.

Speaker 2:

That's the power of scalability.

Speaker 1:

And we shouldn't forget, the business itself becomes an asset, right.

Speaker 2:

Absolutely Critical point. A well-run, profitable business isn't just generating income, it is a valuable asset.

Speaker 1:

Something you could sell.

Speaker 2:

Exactly. You could sell it down the line, maybe merge with another company, franchise it out or even pass it on to family. It has its own inherent market value, Okay.

Speaker 1:

So for someone listening maybe thinking wow, this sounds amazing, but also daunting. What are the key things to focus on if you're considering scaling a business?

Speaker 2:

Well, the sources highlighted some really smart principles. The absolute foundation, it emphasizes, is having a proven concept.

Speaker 1:

Meaning.

Speaker 2:

Meaning a product or service that actually works, that people demonstrably want or need, something that solves a real problem or fills a real desire for a specific group of people, your target audience. You can't scale something nobody wants.

Speaker 1:

Makes sense, start with something solid, then what?

Speaker 2:

Then it's about capital, but not just having it. It's about how you strategically use it to fuel growth.

Speaker 1:

Like reinvesting profits.

Speaker 2:

Yes, but smartly. This could mean hiring key people, bringing in talent and expertise you don't have. It could mean investing seriously people bringing in talent and expertise you don't have. It could mean investing seriously in marketing and advertising to reach more customers.

Speaker 1:

Or improving operations.

Speaker 2:

Definitely Investing in better systems, technology processes, anything that makes the business run smoother, improves the customer experience and makes it more efficient. That all helps scaling.

Speaker 1:

And the mindset behind this reinvestment.

Speaker 2:

It's absolutely vital, the source stresses, to treat the business like an investment, just like stocks or real estate.

Speaker 1:

Not just a personal piggy bank.

Speaker 2:

No, every dollar you put back in should have a purpose. It should be aimed at increasing revenue, boosting profitability, making the business stronger and more valuable in the long run. It's about building that asset value.

Speaker 1:

Okay, so three very different paths we've looked at Stocks, real estate, business ownership, all ways to potentially multiply money, moving beyond just saving.

Speaker 2:

Yeah, we've covered a lot of ground from the accessibility of stocks.

Speaker 1:

Easy to start liquid.

Speaker 2:

To the tangible nature and tax advantages of real estate.

Speaker 1:

Income potential long term equity building.

Speaker 2:

And, finally, the well potentially transformative rewards and challenges of scaling your own business.

Speaker 1:

Highest risk, maybe highest reward.

Speaker 2:

Often yes, and, as we've kind of circled back to a few times, just saving money provides security, sure, a buffer.

Speaker 1:

But it doesn't really build significant wealth.

Speaker 2:

Not usually Not in an environment with persistent inflation and rising costs To really move the needle towards financial prosperity, actively investing your money in some way. It's not just an option anymore.

Speaker 1:

It feels more like a necessity.

Speaker 2:

For many people aiming for real wealth growth. Yes, it really is.

Speaker 1:

So whether it's the stock market's ease of entry or real estate stability and tax breaks, or the massive potential upside of a business, the core message seems to be these routes offer much better growth prospects than just letting cash sit idle.

Speaker 2:

Absolutely Now. Each path has risks, no doubt, and rewards, but they all involve actively putting your money to work, engaging it in activities designed to build wealth over time.

Speaker 1:

It's a fundamental shift from just earning money to making money work for you.

Speaker 2:

That's it and looking ahead, you know the most impactful financial decision you'll likely make. It isn't just about how much you earn. It's about how effectively you learn to manage and grow what you have, how you make it multiply.

Speaker 1:

Right. So maybe final thought for everyone listening to Chew On yeah, based on everything we've discussed Right. Based on your own situation right now, your interests, what you're comfortable with risk-wise, what could multiplying money actually look like for you?

Speaker 2:

That's a good reflection point.

Speaker 1:

And maybe even more concretely, what's just one small, manageable step you could take, maybe this week, maybe this month, to just explore one of these avenues. So,

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David (Viacheslav) Davidenko

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