I recently read The Powerful Little Real Estate Book: Tips & Strategies for Accumulating Wealth by Dave Watts. Unfortunately, I didn’t care for this slim book about real estate investing. My biggest problem with it is the poor formatting. I spotted 10 or more formatting errors, where words are placed next to each other with no space in between them. This makes for a very distracting reading experience and it causes the reader to wonder if an editor was even hired to review this book before it was published.

My other big gripe with this book is some of the advice is not good or flat-out dangerous. For example, at one point in the book the author says that borrowing from your 401(k) is a good way to get money to buy property. It’s not. It’s a terrible idea. Stealing from your future to finance your present is never a good idea. You will incur penalties, fees and miss out on the significant gains of your holdings had you not touched your 401(k), including the compounding of the capital gains and dividends generated by the assets your account is invested in. And if you have a Roth 401(k), you don’t have to pay taxes on any gains or withdrawals once you’re 59 1/2. So, why would any smart person take the advice offered in this book about tapping your 401(k) to fund a real estate investment? They wouldn’t, and they shouldn’t.

The author also says that your primary residence is an investment. It’s not. Your primary residence should be a place to rest your head and keep your family safe. No one should buy a house for their family thinking, “I wonder what I can resell or rent this for in 7-10 years?” People buy a home because it’s in a neighborhood that they like or because there’s a good school nearby. It’s about quality of life, not potential financial gains. If you happen to make money on your house later on in life, great. But it shouldn’t be the motive for whether or not you buy a property. Having the mindset of “My house is my nest egg” is dangerous. Invest in a 401(k) and a Roth IRA and buy a house because it’s what’s right for you and your family. If you view it as an investment, you could wind up being house poor by dumping all of your money into it, only to be disappointed later in life.

Lastly, the author discredits investing in the stock market by offering vague references to two times when he lost money investing in stocks. To me, stocks are the most cost-effective, efficient and versatile investment a person could possibly have. That said, I only recommend investing in ETFs or mutual funds, not individual stocks. But the beauty of doing so is you own shares of thousands of companies, which reduces risk dramatically. And you can sell your shares whenever you like and get your money back within seconds. You can’t do that with real estate, which makes it more risky. Also, I know people who own real estate and investment properties, and there’s a lot of financial and emotional stress that comes with it. One couple in particular couldn’t sell their primary residence for more than six months and they were renting a place in another city at the same time. So, they had to pay a mortgage and rent simultaneously. Imagine that! Needless to say, it was not a pleasant experience for them.

As someone who’s attended Temple University’s Real Estate Institute and completed several real estate courses, including Real Estate Investing, and read numerous books on investing, I can confidently say that ETFs and mutual funds are my preferred way to generate long-term wealth. That doesn’t mean that real estate isn’t a wise investment. It can be. But if you’re looking for sound advice on how to properly invest in real estate, there are better books on the topic than this one.