Investing in real estate or stocks is a personal choice that depends on your financial situation, risk tolerance, goals, and investment style. It's safe to assume that more people invest in the stock market, perhaps because it doesn't take as much time or money to buy stocks. If you're buying real estate, you're going to have to save and put down a substantial amount of money.

When you buy stocks, you buy a tiny piece of that company. In general, you can make money two ways with stocks: value appreciation as the company's stock increases and dividends.

When you buy real estate, you acquire physical land or property. Most real estate investors make money by collecting rents (which can provide a steady income stream) and through appreciation, as the property's value goes up. Also, since real estate can be leveraged, it's possible to expand your holdings even if you can't afford to pay cash outright.

For many prospective investors, real estate is appealing because it is a tangible asset that can be controlled, with the added benefit of diversification. Real estate investors who buy property own something concrete for which they can be accountable. Note that real estate investment trusts (REITs) are a way to invest in real estate and are bought and sold like stocks.

Pros and Cons: Real Estate
Real estate investors have the ability to gain leverage on their capital and take advantage of substantial tax benefits.

 Although real estate is not nearly as liquid as the stock market, the long-term cash flow provides passive income and the promise of appreciation.

Despite this, it's important to consider the amount of money that goes into real estate investments. You need to have the ability to secure a down payment and financing if you aren't making all-cash deals.

Since real estate isn't as liquid, you can't rely on selling your properties immediately when you may be in need. Other disadvantages include the costs associated with property management and the investment of time that goes into repairs and maintenance.

Pros
Passive income

Tax advantages

Hedge against inflation

Ability to leverage

Cons
More work than buying stocks

Expensive and illiquid

High transaction costs

Appreciation isn't guaranteed

Pros and Cons: Stocks
For most investors, it does not take a huge cash infusion to get started in the stock market, making it an appealing option. Unlike real estate, stocks are liquid and are generally easily bought and sold, so you can rely on them in case of emergencies. With so many stocks and ETFs to choose from, it can be easy to build a info well-diversified portfolio.

But as noted above, stocks tend to be more volatile, leading to a more risky investment, especially if you panic sell. Selling your stocks may result in a capital gains tax, making your tax burden much heavier.

 And unless you have a lot of money in the market, your holdings may not be able to grow much.

Pros
Highly liquid

Easy to diversify

Low transaction fees

Easy to add to tax-advantaged retirement accounts

Cons
More volatile than real estate

Selling stocks can trigger big taxes

Some stocks move sideways for years

Potential for emotion-driven investing