Final answer:
A real estate investment dependent on others' management is a passive investment, characterized by limited daily involvement and control over profitability by the investor. Investment choices vary in risk and returns, and one's strategy should align with their life stage and financial objectives.
Step-by-step explanation:
When you make an investment with other real estate investors where profit depends solely on the management effort of others, it is likely a passive investment. This type of investment typically does not require daily involvement or decision-making from the investor. Instead, the profitability is largely influenced by the performance of those who actively manage the investment, such as property managers or real estate development firms. Hence, the individual investor does not have control over the day-to-day operations that affect the success of the investment.
The household investment choices display a tradeoff between expected return and degree of risk. Bank accounts have low risk but also low returns, while stocks, which carry higher risk, may offer higher returns over a long period. Investment strategy should be influenced by an individual's life stage and financial goals.