These days, the internet and dinner tables are brimming with investment advice. Your uncle might advise you to buy Tesla now, at your family lunch. Your father might keep nudging you to save pennies to come up with a down payment. 

You’re also learning about blue-chip stocks, cryptocurrency, ETFs, and innovative investment models like Lotly’s real estate investor fund.

So, how do these investments compare? Let’s explore the differences between Lotly’s real estate investing model with blue-chip stocks. 

What are blue-chip stocks?

Blue-chip stocks are traditionally seen as stable and liquid. These are shares in companies with years of business experience, who are likely household names within their respective industries. Think Coca-Cola, Google, and Bank of America. So, they have three things going for them as an investment: growth, stability, and dividends (sometimes). 

Coca-Cola isn’t going anywhere anytime soon, and they can prove it with years of growth since 1990. Even with the odd dip, they’ve established themselves as a critical player in the food industry. A thirty-year time period raked in a near 6,000% return, as shown in Google Finance. Key words: thirty years. If you’re after a quick buck, blue-chip stocks can’t be your sole investment. 

Still, another pro for blue-chip stocks is the dividends. Take Walgreens, for example. The American drugstore chain boasts long-term stability and a 4.69% dividend yield. 

Meaning? That 4.69% is what you earn on your invested amount, usually paid every quarter. So if you invest a significant amount, you’re looking at a solid chunk of change.

On top of that, companies might hike up their dividends when business is good. Of course, the reverse can be said when business is bad. But the point of a blue-chip stock is that business is never bad for too long. 

Now, our final qualifier for blue-chip stocks is stability. 

Saving every penny will make you a victim of inflation. Some formulas position that today’s inflation rates will halve your savings in the next eight years. That’s why it’s so important to invest. 

Blue-chip stocks are in it for the long haul. These aren’t investments that will bring you substantial income — you’ll still have to keep that 9 to 5 in most cases. Plus, you need to do the research and learn about each company’s financial history and stock performance before investing. Still, blue-chip stocks help you protect your money from inflation and grow it over time, while remaining quite liquid.  

Let’s use Enbridge as an example. Say you invested $50,000 in Enbridge in 2010, when shares cost $23.21. Fast forward 13 years? Today, shares are worth $55.13. Your 2,100 or so shares would jump in value from $50,000 to worth almost $120,000. Of course, 13 years is a long time — but once you see a return, you can choose to hold onto the stock or cash it in in an instant. 

Let’s see how investing with Lotly compares with your average blue-chip stocks. 

Lotly real estate investing: the basics

Real estate has value and freedom that doesn’t just disappear. A property could be your home, investment, rental income, business location, or leverage. But a mortgage is hard to come by these days, not to mention your average interest rates, home expenses, and down payment.  

Lotly eliminates many of these barriers for investors, and narrows in on your main goal with real estate: intrinsic value and appreciation growth. 

Here, your funds help real homeowners achieve a 20% down payment. Lotly provides a maximum of 15% (from investors like you) while homeowners cover a minimum of 5%. Plus, we help homeowners avoid mortgage insurance in the process — a welcome bonus!

Over the years, as the homes ideally appreciate, the homeowner pays back the Lotly fund through a buyout, refinancing, or sale of the home. Plus appreciation.

Curious about how that works in practice? Check out our appreciation split calculator! 

What does that return look like for you, the investor? 

Let’s say you invest $100,000 into Lotly’s fund & the homes within the fund appreciate by an average of 15% over the 10-year term. You’ll turn your $100,000 into a smile-inducing $400,455. 

Play with the numbers and predict your returns with our Projected Return Calculator!

Blue-chip stocks vs. Lotly real estate investing

So, how do blue-chip stocks compare with Lotly? It’s hard to compare because stocks vary so wildly in value, dividends, and performance. But investing in both blue-chip stocks and Lotly will beef up your portfolio with diversification, aka risk management. Here’s a quick comparison:

Blue-chip stocks: 

• Speed: Slow. Lifetime.
• Return. Estimated 10%.
• Ongoing costs: Advisor management fees between 1%-3%.
• Flexibility: Flexible and liquid. Waiting as long as possible will yield the most growth, but you’re free to move your money around in between. 

Lotly real estate investing:

• Speed. Quick. 5-10 years.
• Return: Projected 15% annual.
• Ongoing costs. Management fee of 0.5%, Initiation fee of 2%.
• Flexibility: Fixed. You can’t withdraw your investment until the homebuyer refinances or sells, with our data suggesting the medium timeline being 6 years (though this could happen sooner as well).

The freedom of being mortgage-free while owning shared equity in the real estate market presents its own unique flexibility: no maintenance, tenants, or rising interest rates to worry about. On top of that, Lotly’s real estate investment model gives you a chance to make a healthy return within 5-10 years. Blue-chip stocks are a long game, requiring a near-lifetime commitment to see a significant return. 

We think Lotly investors have a pretty sweet gig. The real estate market experiences ups & downs, but in the long term, it moves up. And with Lotly, the headaches are non-existent. Once you invest, you only require patience.

Invest with Lotly today!

Diversification is your friend.  If you’ve done the research and found some blue-chip stocks that work for your portfolio, that’s great. But why not invest in real estate too, with Lotly. You’ll enjoy the best of both worlds. The best part? Lotly lets you reap the rewards of a real estate investment without the massive time commitment of traditional real estate. 

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*Lotly GTA Fund I is closed as of December 2023. We will update you when the next fund opens.