The investment strategy of FatCat is to buy stocks and mutual funds and wait for them to go up. After buying and praying thousands of human decision, FatCat decided it is time to take her own money into her own paws.
It is no accident FatCat starts her first mutual fund with REIT. Like average Americans, FatCat started her investment with a small savings account then a small house which she allows her human companion live there rent free. FatCat also owns mutual fund from her 401(k) and stocks from Employee Stock purchasing program. REIT is simply a combination of investment of real estate and mutual fund.
REIT usually has an average earning of 10%. A good fund appreciates about 8% every year. On the other hand, FatCat' house equity more than doubled in last 5 years and the earning if calculate as the difference between would be rent and actual mortgage payment is more than 15%. That is before tax! So what is the point of invest in REIT when you get more earning and capital appreciation do-it-yourself?
