If you invest in real estate, you are actually purchasing a tangible, physical land or property. Investing in stocks is entirely different; if you purchase shares of a business, you are buying a claim to a piece of the company itself.

The risks associated with each investment type differ. When you own real estate, you incur maintenance costs, capital costs, taxes and maybe development costs each month. That said, the values of physical assets are less likely to become worthless than stocks.