How to Build Real Wealth

We are often asked; should I build wealth using shares or property?  The truth is both are important. We encourage our clients to own both and we ourselves do. In this article we look at shares and property and the factors you need to understand.

Shares and property the factors you need to understand


Liquidity is important when looking at shares and property. It is the ability to convert your investment into cash.

Shares are quite liquid. In most cases they are easily sold, with direct shares taking a few days and managed funds usually a couple of weeks. You can also sell part of your share portfolio, meaning it is divisible.

Property however, can take more time to sell. At best a few weeks through to months. It is also not divisible. Meaning you need to sell the whole of your investment.

Risk Management

All investments have risk. In fact everything we do has risk, crossing the road or driving to work. However, just because something has risk doesn’t mean we don’t do it. It just means we need to understand the risk. We should avoid the risks that are easy to avoid and manage the other ones.

With shares it is easy to diversify risk. However, they still carry market risk and the prices can be volatile in the short term.

Property is harder to diversify specific risk but easier to manage it. It still carries market risk. And, interestingly the volatility is less visible because we don’t get a daily update on prices changes.

Management and maintenance

All investments require some form of management and maintenance. Investments should be based on research, although that doesn’t mean you have to do it yourself.

It’s interesting, most people spend more time researching the purchase of a washing machine, or a holiday or even on their footy tips, than they do on their investments and financial plans. And, that’s really because those things are in their comfort zone.

The table below gives you a quick snapshot of the management and maintenance required for both shares and property. There is probably a little more effort required with property than shares.


Both shares and property are subject to Capital Gains Tax when selling. And, in terms of deductions you may receive franking credits with shares and deductions for depreciation and costs with property.

A nice advantage with both shares and property is that you can use them as security to further invest. With shares up to 70% and up to 90% with property.

What does history show

At the moment the medium price for a Sydney property is $995,804 and the All Ordinaries Index is around 5,558. However when we look back to say 1980, home prices were $62,500 and the All ordinaries Index was 546.

Many are surprised by how ‘cheap’ these look when we look back in time. The fact is they would have seemed expensive at the time. On top of this timing will never be 100%. The most important thing is to take action with a long term plan.

Both shares and property should be used to build your retirement nest egg. Trying to work out which one is better is a waste of time. It’s like debating whether running or cycling are better for you. The answer is both are and it’s best to combine the two.

If you would like to know more about how to invest to build real wealth please talk to us jules@evalesco.com.au

I have an amazing opportunity in my financial advisery role to make a difference to people’s lives by helping them to achieve what’s important to them.