Americans choose cash over real estate

by Diana Aqra30 Jul 2013

A new study has found that more Americans prefer cash investments than real estate in a 10-year investment horizon.

One-in-four Americans preferred cash investments while only 23% preferred real estate when investing in a period no longer than 10 years, according to a study by Roughly one-in-six preferred investments in precious metals, 14% preferred stocks, and only 8% in bonds.

Cash investments generally include money market accounts and certificates of deposit, or CDs, which have five-to-ten year investment horizons and relatively low yields, a release about the study by Princeton Survey Research Associates said. They study interviewed more than 1,000 adults in the US.

Yields for a US $10,000 initial investment in an average money-market account was only  .11% per month while  an average five-year CD would gain about.78% per month, according to the release.

“Real estate is not only very cash-intensive, but often illiquid,” said Greg McBride, CFA and a’s senior financial analyst.  “Americans not saving enough is well documented, but hunkering down in cash investments and settling for low returns will only magnify the problem of not having a sufficient nest egg to meet longer-range financial goals such as retirement,” he said.



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