Now that we're done with the basics, let's move on to those sneaky misconceptions. If you are one of the many people who believe that we only use 10% of our brain at any given point in time, or that the Great Wall of China can be seen from space, you are sadly misguided. Both of these notions are misconceptions and proven to be false. Although some misconceptions are rather harmless, those that relate to investments can cost you dearly. So let's clear away these misconceptions about reads. The first common misconception is that reads are boring, stable investments.

But guess what? reads aren't actually boring investments. On the contrary, their unit price can sometimes go up and down in a big way and move sharply in and out of favor with investors. So many have mistakenly portrayed reads to be similar to investing in physical properties like a house, but this cannot be the case as 90% of the reads taxable income is distributed to shareholders through dividends. Therefore, investors who purchase shares of a route are actually investing in the Trust's performance instead of the real estate market. This means that the price of the rates fluctuate along with the stock market instead of the housing market, which is considered to be less volatile in terms of price fluctuations.

Although much less easy to buy or sell as compared to reads. The implication of all these, you have to be careful when using debt to invest in REITs. The second misconception is all about the scoop of due diligence, that only evaluating the reads properties is all you need to do. To succeed. The truth is, it is not that simple. Yes, assessing the properties is part and parcel of doing proper due diligence.

But you must not forget about the importance of assessing the management team as well. from raising capital prudently to managing the tenants actively. These are all important activities that contribute to the long term success of a route. Unfortunately, many weed investors only look at the property aspect of things and neglect what the management can or cannot bring. That is why their returns are always so tragically uninspiring. The next misconception is that reads and stocks are the same, just as all thumbs or fingers but not all fingers or thumbs, the two asset classes are similar yet different to a certain extent.

For example, whenever there is growth in a return operating cash flow, the unit price of the reads will subsequently increase. This cannot be said for stocks where the increase of cash flow doesn't always lead to an increase in share price. In addition, when it comes to valuation valuating a rate is different from valuating a stock. For example, using the P e ratio to find out how expensive the rate is would not be very productive. And likewise, using our o e ratio to analyze our rates performance doesn't make much sense either. As you can see, stocks and reads investing are somewhat different games, so you should spend the time to understand each asset class individually.

The fourth misconception is that reads investments are suitable for anyone. The truth reads investments is not for everyone. If you are a true passive investor, which most people are someone who doesn't want to do research, someone who is just too busy and doesn't have the time to track their investments, then investing in the s&p index is the best way for you to go. Regardless of what investment class you choose. If you are an investor who wants big returns fast, then reads investing is also not for you try currency or commodities trading. This is a list of people who are not suitable for reinvesting.

Ideally, if you are someone who was patient, I would like to establish a noteworthy secondary income. One where you can see real cash flowing into your bank accounts, then rates should be a strong consideration for you. The fifth misconception capital gains and dividends are always tax rate. Did you know that if you are a foreigner who invests in US reads, the cash dividends and capital gains that you receive will be taxed at 30% and 35%, respectively. Surprise, surprise. This is called withholding tax and it is usually applicable to foreign investors also known as non residents.

Different countries have their own tax treatment with regards to foreigners. Because of this, your investment result will be affected. So do take into consideration the tax implications if you decide to invest in foreign reads. My suggestion is to look at research provided by accounting firms like PwC where they shed light on things like withholding tax or foreign investors. A sample of their research is in the link below. On the last misconception, Assuming that the best reads are the ones attached to a big sponsor, this thinking might not hold true if the reader is pressured to purchase the property from a sponsor whenever the first right of refusal is conducted, similar to how bad parents might treat their children.

There are many cases where the sponsor treats their read as a platform to just dump their properties so as to lighten their balance sheet. Pay attention to the quality of the property that the reader is about to buy. I will explain more about this in the later lectures. But as of now, do not assume that reads attached to a big sponsor make better investments. This ends the lecture on misconceptions. On the next lecture, we'll I will give you a brief overview on how to become a master re investor.