G
rowing your wealth through real estate and stocks are two popular options, but the data suggests that investing in stocks is generally a better long-term strategy. Home values have skyrocketed over the past few years, with some markets experiencing significant price increases. However, when looking at the broader picture, the stock market has outperformed the housing market.

    According to historical data, the S&P 500 index has increased by more than 1,200% since 1995, compared to a 310% rise in home prices tracked by the Case-Shiller Home Price Index. When including reinvested dividends, total returns on the S&P 500 are over 2,200%. This significant difference highlights the stock market's potential for long-term growth.

    While real estate investments can be substantial, with profits looking incredible due to large initial investments, the percentage return is often lower than that of stocks. For example, investing $1 million in the S&P 500 at a 10% annual return could yield over $600,000 in profit after five years, compared to a smaller percentage gain on a larger real estate investment.

    Additionally, investing in stocks offers greater liquidity and diversification opportunities, making it a safer long-term strategy. With stocks, you can easily get in and out of an investment with minimal costs, whereas real estate investments can be time-consuming and costly. Even if you're unsure what to invest in, tracking the S&P 500 through an exchange-traded fund is a low-risk way to participate in the stock market.