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From 1968 to 2004 the average home value in the US had an average 6.4% YoY growth[1]. An index fund will grow your money much faster than that, all without sadd
by cloakandswagger 9y ago
From 1968 to 2004 the average home value in the US had an average 6.4% YoY growth[1]. An index fund will grow your money much faster than that, all without saddling yourself with debt or exposing you to the risks of the housing market, both as a whole and in your area.
You were lucky to buy your house at the bottom of the 2008 housing crash, it doesn't mean that houses are a good investment today.
[1] https://www.investopedia.com/articles/mortages-real-estate/11/the-truth-about-the-real-estate-market.asp https://www.investopedia.com/articles/mortages-real-estate/1...
- junkscience2017 9y agoI can easily borrow against my home equity. I cannot easily borrow against my index funds. Home equity also delivers an almost-fixed tax rate in California (prop 13) and numerous other deductions and incentives, none of which stock investments provide. Home equity is much more powerful than a fund investment, they are not equals.
- CyberDildonics 9y agoThat is simplistic and doesn't account for the ability to get loans (investing more money than you have), tax breaks, and the fact that you need to live somewhere in the first place. Buying a house with cash and not living in it is probably a very poor investment, but that isn't what you are comparing.
- omilu 9y agoWhat are the returns on renting?? Because that is where your money will go if you don't buy. If I forgo a house, I save $1500/month on a mortgage, but now I have a new expense called rent, I can't allocate it to investing.