Originally Posted by
Gunfighter
All this talk of risk, inexperienced traders and tax considerations has me thinking about a quick retreat to my happy place in real estate. I've never had a house drop to 0 or watched it double when I'm short. The leverage on options is great, but so is the leverage on RE. The tax code is favorable to index options, but even better for real estate. The ability to receive cash flow that is offset by a non-cash expense (depreciation), then take cash out via refi without paying taxes on the distribution is a huge advantage. I'm trying out trading more for entertainment in a small account, while keeping my primary focus on adding more real estate.
It’s interesting how people view risk. Asset heavy properties that rely on others to pay your mortgage seem risky. It seems high overhead and the risk of the mortgage payment always is risky. But, you’re comfortable with it and I know it’s not as risky as I perceive.
Your perception of options is that it’s very risky, but I’m very comfortable with them.
No one is right or wrong, it’s just an interesting observation in how people perceive risk.
Most importantly, risk is what allows us to make money in our respective areas of expertise. So, we are all more similar than we think, in terms of risk tolerance.