Stocks vs. Real Estate: The False Binary, Part 3, How I Use Both (and Why)

"Real estate gives me control. Stocks give me freedom. Together, they give me both."

This post - adapted from Chapter 8 of Built for Freedom™ - breaks down why the "stocks vs. real estate" argument is outdated and how each asset class plays a specific role in a well-designed Freedom Portfolio™.

This is Part 3 of a three-part series covering:
Part 1: The Strengths
Part 2: The Weaknesses
Part 3: How I Use Both (and Why)

Over the last two posts, we looked at the strengths and weaknesses of both asset classes.
Now it's time to bring them together.

Why I Use Both

After years of real-world investing - through good markets and bad - here's what I've come to believe:

You don't have to choose between stocks and real estate, you just have to know what job you want each one to do. Most people try to pick a winner.

I've built a system that leverages the strengths of both, and offsets their weaknesses.

Because when used intentionally, stocks and real estate complement each other beautifully.

Real Estate Is My Long-Term Wealth and Equity Engine

I use real estate for:

• Control - I set the terms.
• Leverage - I multiply capital intelligently.
• Tax advantages - I defer, deduct, and compound.
• Durable income - I create dependable monthly cash flow from properties I understand and manage like a business.

It's not completely passive, but it's powerful.

Stocks and ETFs Are My Liquidity, Automation, and Optionality Layer

I use stocks, especially covered-call ETFs, dividend funds, and growth slices to:

• Automate income with zero tenants.
• Access liquidity when needed.
• Diversify globally without adding operational overhead.
• Buy into trends like AI, clean energy, and semiconductors without owning a shovel or a factory.

With the right structure, they create a clean, consistent, tax-optimized stream of income - no tenants, no phone calls, no repairs.

Together, They Do What Neither Can Alone

Here's the real reason I use both:

• When markets drop, my rentals still pay rent.
• When I need liquidity, I tap ETFs, not equity lines.
• When I want to grow income, I can scale both properties and covered-call ETFs.
• When I want flexibility to travel, reinvest, or pivot, I'm not locked into one path.

That's the essence of the Freedom Portfolio™ - designing each piece to reinforce the others.

Strategic Integration into the Freedom Portfolio™

Once you understand the distinct roles that real estate and stocks play, the next step is aligning them intentionally - not for maximum return, but for maximum alignment with your goals, time horizon, tax situation, and peace of mind.

Here's how I personally integrate both:

1. Account Location and Tax Strategy

   Not all income is created equal, and neither is the account it flows through.

   • Covered-call ETFs (whose distributions are taxed as ordinary income) go inside my Traditional IRA, where I can defer taxes and reinvest every dollar.
   • Growth stocks with long-term upside potential go in taxable accounts, where I can harvest losses, capture long-term capital gains, and maintain liquidity.
   • Real estate sits in its own universe - it generates income, offers depreciation, and often lets me defer or eliminate taxes through 1031 exchanges, long-term gains, or legacy planning.

   (I break this framework down in detail inside Built for Freedom™, using a proprietary model called The Five Buckets of Tax-Smart Freedom™.)

2. Use-Based Allocation

   I don't just allocate based on risk tolerance.
   I allocate based on what each layer of income is for:

   • Real estate income covers base living expenses and builds long-term equity.
   • Covered-call ETF income is my automated yield layer, used for reinvestment, opportunistic purchases, and consistent cash flow.
   • Dividend stocks and REITs provide a hybrid, steady income with growth.
   • High-growth equities (AI and tech) are my optionality layer, not for income, but for long-term exposure to innovation.

3. Reinvestment Strategy

   Cash flow without a plan is just financial clutter. Here's how I reinvest:

   • Reinvest 50% of covered-call ETF income back into the same ETF and allocate the other 50% into growth assets like QQQ for compounding.
   • Rental income, once stabilized, fuels new opportunities and capital reserves.
   • Note income inside my IRA is recycled into additional yield assets.

   This creates a flywheel - each income stream fuels the next.

4. Life Stage Adjustments

   Your ideal mix will evolve over time:

   • 30s-40s: Heavier toward growth and reinvestment.
   • 50s-60s: Prioritize income durability and tax efficiency.
   • Retirement: Focus on liquidity, volatility smoothing, and cash-flow sequencing.

   I always ask:
   "What do I need this portfolio to do for me now, and 10 years from now?"
   Design your allocations around those answers.

   "It's not about picking the best asset. It's about building the best system for your life."

In Built for Freedom™, I share the exact Freedom Portfolio I'm building toward right now, including real dollar figures, allocation percentages, and the reasoning behind each position.
It's a transparent look at how I combine real estate, stocks, and other long-term income streams I've personally relied on for years and how each layer works together to create durable, tax-smart freedom.

Ready to Build Your Own Freedom Portfolio™?

The ideas in this post come directly from Built for Freedom™ - A Proven, Real-World Roadmap to Durable Wealth, Real Assets, and Tax-Smart Passive Income.

👉 Get your copy on Amazon → and start designing a portfolio that pays you for life.

In Built for Freedom™ I break down the exact portfolio I am building toward now. I list the actual dollar amounts and asset allocation percentages of my Freedom Portfolio. It includes real estate, stocks, and other passive income streams I have personally used for years (or decades).