Viewpoints
I've been a bicycle rider my whole life. Fifty years ago, this month I was riding my bike about six miles round trip to Bible school at Tomahawk, Kentucky. I did so for an entire week.
During the week, I was one of several young people who prayed the prayer to receive Christ. On Sunday morning in 90-degree July heat I put on the best clothes I owned and rode my Western Auto yellow three speed bike almost five miles one way over two mountain hills to Inez, Kentucky.
I was a bit wet with sweat after that ride. I parked my bike in the front yard of Russell Williamson and went into First Baptist Church to make my decision for Christ public. Russell Williamson was a state hall of fame basketball coach, educator and businessman. Two years later I would be ordained beside Russell Williamson.
Later that night, my parents would drive me back to church to be baptized. Since that day I've had the opportunities to travel the country and I've been all over the world. And, it just keeps getting better, all by the grace of God. He has been a lot better to me than I could ever be to him as I know I'm probably one of the most imperfect people God ever created.
Still, I marvel at God's grace, provisions and all that he allows me to do and enjoy.
Here I am today, fifty years later and I don't feel like God has ever turned his back on me or excluded me from his care. There have certainly been some bumps in the road and some rough times along the way. The way life is there are bound to be more curves and some tough terrain. It's just life.
If you think you are going to sail through life unscathed from bruises, cuts and some pain then you haven't lived long enough to know better. Eventually you'll know the journey of life is not always a smooth ride.
However, I want to say I'm grateful for life and the opportunity to live life. This is a difficult time in the world for everybody in different ways. Covid-19, business failures, financial and personal struggles exclude none of us and to some extent are inclusive of us all.
Today, allow me to give thanks for my 50-year pilgrimage of faith in Christ. It's been quite a trip.
If you have not opened your heart to God's love today in Christ, please consider it. I'm not talking about joining a church or acting like some ridiculous religious people act. But, consider letting God love you today because he does and he will take you further than you can ever imagine.
Dr. Glenn Mollette
Next, picking up where we left off, we need to talk about liquidity.
To keep it simple, liquidity is how easily an asset can be bought and/or sold. Another way to think about liquidity is how easily the asset can be turned into cash. The stock market has a clear advantage in terms of liquidity, but it still warrants a discussion.
Stocks are very liquid. In fact, stocks are so liquid that last summer, I was able to sell Amazon for $1,800/share, Tesla for $250/share, and Zoom for $85/share without Robinhood tapping me on the shoulder and saying, “You might not want to do that …”
Those companies now trade for $3,300/share, $1,700/share, and $275/share, respectively, and I still live in my parent’s basement.
I don’t tell that story to downplay liquidity because having quick access to your capital is advantageous in many scenarious; however, I tell that story to highlight how liquidity makes it easy for an investor to make emotional, rash, and in my case, downright stupid decisions. At that time, I did not have the trading savvy or financial discipline to hold a stock for more than a year.
All in all, if you value having easy access to your capital and have the financial discipline to manage that liquidity, then the stock market will better suit you.
Real estate, on the other hand, is a relatively illiquid investment. Whenever you want to pull money out via a refinance or cash out of the investment via a sale, then there is going to be a process that you must follow. The process will likely take a few months. Depending on the transaction, you could fall on either side of that timeline; however, it doesn’t take seconds like it does with stocks. If you don’t need your capital in the short-term, then real estate investing will be a great option for you.
Another important criteria is asset diversification. Diversification is the act of placing your investments in a variety of asset types, industries, etc. so that your exposure to any one asset type is limited.
