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> They can't afford a nanny more than before. They can't buy a bigger car than before If they want to inherit their house to children, that might be the case.
by MagnumOpus 10y ago
> They can't afford a nanny more than before. They can't buy a bigger car than before
If they want to inherit their house to children, that might be the case. But that is the case with any asset - it is irrelevant whether any jewellery or painting you own is worth $1 or $1 million if you never intend to sell it, ever.
But the house is real wealth and that wealth can be unlocked - a reverse mortgage is not unusual, and the more valuable the house, the higher the annuity you can earn from releasing the equity from it step by step. And that allows you to get a nanny or make car payments or go on cruises or whatever.
- cm2187 10y agoA mortgage is not creating wealth. You are merely borrowing against your future revenues. The house is merely used a collateral. The only way you can release this wealth is by selling it and moving to live in a cheaper place. But to a family who lives in London, always had and has no plan to leave, this is only theoretical wealth. It doesn't really say much about wealth inequality between different cities or countries.