An investment is an entity you allocate capital to, to enable wealth creation. e.g. A baker buying an oven. Speculation is allocation of capital to an entity

An investment is an entity you allocate capital to, to enable wealth creation. e.g. A baker buying an oven. Speculation is allocation of capital to an entity because you believe you or someone else will need it in the future. e.g. A banker buying a baker's oven. A primary residence is at best an investment (you need to live somewhere to earn an income), a second residence is purely speculation. The housing market is highly highly leverage with the median ratio ~= 14:1 [1]. Since small changes to the amount of money inflated by commercial banks and the Federal Reserve can have extreme consequences on prices, it's highly inadvisable to speculate in highly leverage markets. [1] 7% median down payment, 1/.07~=14 https://www.attomdata.com/news/mortgage-and-finance/q3-2017-u-s-home-loan-origination-report/ https://www.attomdata.com/news/mortgage-and-finance/q3-2017-...