Quote:
Originally Posted by JManc
You have to live somewhere and with renting, there's no equity. Even if real estate is less lucrative in the long run than an index fund, you're still investing in your home where as renting is a sunk cost never to be recovered. It acts as a stable component of ones portfolio.
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that's why home ownership can be viewed as a kind of "savings account for idiots".
it's not that home ownership is the absolute best possible investment that anyone can ever make, it's just that you gotta live somewhere, so if you can get over the down payment hump, then you're basically writing a portion of your "rent" check to yourself every month, instead of pissing all of that money away forever.
combine that with the other incentives that our society gives to home ownership, and it's a pretty good way to end up with many hundreds of thousands of dollars in the "bank" after several decades without having to do a whole lot.
and it's good protection against inflation, to boot.
Quote:
Originally Posted by Baronvonellis
Being house rich and money poor isn't always that great.
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well, of course that specific situation isn't great, but the savvy home owner buys a home at a price point that still allows them to have some extra cash to diversify their investments.
being way over-extended in any one specific investment is never a wise choice.