It is important to invest your money. It is important to understand your own appetite for risk. Real estate can, at times, be a good investment, but not always. If you were fully invested in real estate in 2008/2009, you would be sweepings streets today. The common advise for rudimentary investing is to allocate your investment to create a balanced investment portfolio that give you some protection from one source of trouble or another. If you are fully invested in only one type of asset you are open to disaster.
As an example of the types of things that can happen, I will use my own situation as an example. As noted in my previous post I had discussed the rental house that the tenant died in. I made the choice to demolish the house, it was due to the kind of money I would have had to pay to have the house livable again. I had to hire a hazmat company to come to remove the mattress that my tenant died on. The cost, just for the removal of the mattress was almost $2000. When asked by me about restoring the house to livable standards, I was told that it would exceed $60,000. Now imagine if that building was a apartment complex. The entire structure would have to be remediated in some way. You would lose all your rent income and have to pay a cost that would be much higher than $60,000. Suddenly your real estate bounty would be sunk in a matter of days. Talk about risk, real estate is at the top of the list for risky investments. $5000 for a demolition is a bargain.
Now, on the subject of 401Ks, IRAs and other structures of retirement saving, People don't do their homework. People do not do a complete study of their risk tolerance. People do not do a complete study of the investments available to them; so they just choose the safest choice, which turns out to be a bank savings account or a money market fund. They are not taking any risk. They are not making any money. You have to accept a certain amount of risk to expect to have a decent return. Jumping in and out of investments will not help either. Think index mutual funds.
Even at the age of 66, I am having to have a risk allocation of 60% stock, 35% bond and 5% money market (cash). With this kind of allocation, I am able to sleep easy at night. This was my allocation when the crisis hit in 2008/2009. By having an allocation of bonds and cash, I was able to weather the storm. Between the crisis and now my allocation has returned a solid 7% annually. This may not sound like much, but it is a substantial amount and allowed me to retire at 61. The hunt for the biggest bestest return can put your risk at a way higher amount than it should. Grandma said "Don't put all your eggs in one basket". She was right.