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I'll modify the question a bit to: What is a better investment: stocks or real estate?..and the answer, as anyone who has taken a first year corporate finance class will tell you is: it depends.It depends on your financial goals (how much, how fast)Your appetite for riskHow much time do you want to spend managing your investments.For example, by real estate investment, do you mean:Buying and holding land for yearsBuying rental propertyBuying distressed properties and renovating them for resell or rent (Donald Trump did that successfully)All three of those can be very time and capital intensive, with a higher barrier to entry than stocks.If you're buying land and plan to hold it for 20 years, then you'll need cash. Just to hold off losses from inflation you'll need to gain about 2% in value per year, with really no guarantees that you will see a payoff. You might get lucky if prices skyrocket, or someone really wants the land. Then again, you could find out later that the area was rezoned while you weren't looking, or someone dumped toxic waste on the site while you were away and you have pay for the clean up.Buying rental property is a path many choose, but as a former landlord it's not all it's cracked up to be. In short, you either buy a home outright or get a loan for a property and rent it out, hoping that the rental income can cover the mortgage, insurance, repairs, etc. Everyone overestimates the rental income and underestimates repairs and other costs. Lots of articles on Quora cover the ins and outs of this. I believe the consensus was that the real average rate of return is about 5% annually. Keep in mind the data below is gross income:Renovating properties carries its own ranks, whether you are selling (flipping) or renting. This takes time and skill to do right. You have to be able to judge the market really well and hold down expenses for the repairs/renovations, transaction costs, etc. Some of the overinflated numbers you hear of people bragging about flipping houses doesn't include all the labor costs that the investor did themselves. It's literally a full time job. The average reported gross returns are about 30%. Net returns (what's left after all the labor, materials, fees, commissions, etc are paid) are much smaller, likely single digits. I've seen lots of people go bankrupt doing this.So what about stocks?In your example, you mentioned dividend stocks which is a different investment strategy than trading stocks. Companies that pay a dividend are usually big, well established firms that don't have a lot of growth like GE, Microsoft, Wal Mart, etc. So if you bought 10,000 shares of a company that paid a $1 annual dividend, you would get a check every quarter for 1/4 that amount.But not all dividend stocks are equal. A stock offering a $1 annual dividend selling for $20 a share is a much different return than a company with a share price of $50. The actual return rate on your money is called a dividend yield:And since stocks are traded on an open market, you have to be careful as the underlying price of the stock can change as well. This in turn, impacts the yield.It pays to do a bit of homework here, but as you can see you can get pretty good returns with a little bit of homework.For my money, I prefer stocks and bonds to grow wealth. You can enter or exit your investments in a few minutes for about $10 (real estate takes weeks, and sometimes months), no one calls me at 2am because a furnace went out, I don't have to spend my weekends evicting a tenant or making repairs, and I get paid like clockwork.Any good investor will diversify their portfolio and that includes some real estate. In my case, that the house I live in which is as much real estate as I want to own.All types of investment carry some risks, so do your homework (5 Big Dividend Investing Mistakes (And How To Avoid Them), and follow a few basic rules (The 8 Rules of Dividend Investing). People often spend more time researching and negotiating the purchase of a car, but will buy a stock they know nothing about in 10 minutes. Never rush into an investment. If you take the same time and effort to learn dividend investing and understanding what you are buying as you would if you were investing in real estate, I think you’ll be much better off.Hope this was helpful. If you’re looking for more answers like this one on Investing and Wealth, follow me on Quora.

If you don’t already own your own home, go buy one. A house, a condo, whatever floats your boat. THAT’s the best way. Live in it for a year, then go buy another one and turn the first into a rental. Wash, rinse, repeat. That’s the easiest and best way. Keep in mind when you are buying the first one what you can rent it for, what upkeep will cost on it (if there’s a big yard that has to be tended), etc. and so forth with each purchase. If you can, find a small apartment building (4 units or less, otherwise you get into other laws and taxable things) and live in one of the units. Most people don’t know you can buy this with a regular mortgage, as it would be your primary residence. After a year, buy another property and move again.If you’re looking for other ways, here are my suggestions:Go to a 3-day seminar on flipping houses and real estate investment. But do NOT buy into their education plan. Those things are created to make money strictly off the education pitch they are selling and most people just can’t do what the “guru” did to get big enough to be able to “teach” in the first place, because mostly it was have the cash in his pocket to start with. Go in and soak up what they are talking about and network with other folks who are there for the same reasons. If you find a real estate agent who is there to learn more about it and network, you’ve struck gold.After this, join some “Meet-Up” groups online specific to real estate investing and you’ll be able to network with LOADS of people and, because you’ll have been to the 3-day seminar, you’ll know the language of what those people are talking about. Look up ROIs, cash flow, and Cap Rates.I can tell you from experience that the best real estate investments are buy and hold properties. They are long term, usually have a great growth rate and will pay for themselves. This is a real retirement plan. The first one might be hard to pull the trigger on (I paid cash for mine), but once you have the first one, the rest come a LOT easier. Not just to pull the trigger, but for financing them too. Banks love to lend money to investors who already own investment property.A lot of people will tell you to flip houses for the quicker big bucks (this is a lot of what they want you to believe in the 3-day), and to do it with other people’s money (hard money, private investors, etc). What they won’t tell you is that, unless you can at least flip 4–5 houses a year, you can’t really make money at it because of the time invested, labor and the holding costs. Plus if you don’t have the cash to do your own flips, you have to use a private investor or hard money lender and a large percentage of hard money lenders are a lot like loan sharks, which increases your holding costs. AND once you start flipping, if you aren’t using your own cash, you kind of have to keep flipping for the income to keep coming in. Location for flipping is also key, for what kind of money you can use, primarily because of labor costs. You can flip houses in Nashville for a huge profit, even using hard money, but try to do the same thing almost anywhere in the state of Maryland or the metro Washington, DC area with hard money, you’re doing great to see $10,000 profit.There are other types of real estate investing you should research too:NNN commercial propertiesAirbnb investment properties (some banks will lend for the purpose of opening an Airbnb now!)Laundromats and storage facilities are two of the top 3 cash cows in this countryMobile Home Parks, the other of the top three cash cows. Warren Buffet is the largest owner of mobile home parks in the U.S.Large land tracts for forestry stewardship. This is not well known, outside of the Southern states, and it’s a LONG term investment, but definitely worth looking at. You can purchase land at $1000+/- per acre, often with trees already on them. Have the timber cruised and sell it in a closed-bid auction (your local county forester will HELP you do this for free!). Often this will pay a significant amount of the mortgage, as much as 3/4 of it. Once the trees are cut, pay down the mortgage but, and this is essential, with a very small portion of the proceeds (like 2%) PLANT NEW TREES. In 15 years, they can be thinned for a profit. At 20 years they can be harvested again for a larger profit. At 25 years, clear cut those trees and REPLANT. Like I said, this is a long term investment, depending on how old you are when you start, that will help pay for your kids college education, and then again your retirement. The best part is you are selling the timber (interest) and never selling the land (the principle) which will likely more than double or triple in value while you hold it this long. This is something you can teach your kids about and leave it to them to continue the timber growth. I own a 43 acre pine plantation in Mississippi that we are getting ready to do our first 15-year cutting on, and that’s just part of my investment plan!

I run a quantitative investment advisory firm, so I make money when my clients do NOT invest in real estate and put their money with my firm (and my firm as has done well: our large-cap strategy has almost doubled the returns of the S&P 500 over the past 12 years net of fees). That said, I am also a fiduciary, which means that by law, I must put my clients’ need first (ahead of my own best interests), which is often not the case for many advisers.Simple, back of the envelope calculations would suggest real estate is an excellent investment. Let’s say you put 20% down on a $10MM property ($2MM). If your investment appreciates at the rate of inflation (as real estate tends to do over the long term), which we might suggest is around 3% (long-term average…recent low inflationary environment not withstanding), your $10MM investment would be worth $10.3 MM after a year. That’s no big deal, but you’ve only invested $2MM in this property, so your returns are leveraged 5:1 (10MM/2MM). Said another way, your 3% magically becomes 15% due to leverage. {The math is this: your original mortgage is still in place…$10MM less the $2MM down. However, your property appreciated 3% to $10.3MM, so your new equity is now $2.3MM — $10.3 - $8MM mortgage. Your ROE is 15%: ($2.3MM - $2MM)/$2MM).The downside is just as leveraged, which is why the mortgage crisis happened. However, real estate tends not to be as volatile as the stock market and if we are talking about long-term trends, leverage tends to work in your favor.If anybody in the stock and bond investing world suggests that they can return 15% annually long-term, I’d run (even Bernie Madoff only promised 9–10%.)That said, there are costs associated with this investment. 30-year mortgage rates are roughly around 3.5% and real estate taxes are often another 2%, so there is over 5% off the returns right off the top without any maintenance considerations, etc. On the other hand, one could leverage the property more than 20% down, which would amplify the returns all the more.The bottom line that I often ask my clients is, “Do you want to be in the real estate management business that is illiquid and can be time consuming?”, as opposed to investing, which is extremely liquid and requires little time with the right adviser.