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> housing as an investment It's just a meme that needs to die. A primary home is an asset, not an investment. Home prices were stable (in real dollars) until
by slumdev 7y ago
> housing as an investment
It's just a meme that needs to die.
A primary home is an asset, not an investment.
Home prices were stable (in real dollars) until Greenspan kicked off this train of asset bubbles in the 1990s.
- rolltiide 7y ago> a primary home is an asset, not an investment. so weird that this venn diagram only has one circle on it
- slumdev 7y agoI think you are asserting that "asset" and "investment" are synonymous. I'll reply to that. A house is something you own. It can appreciate or depreciate, but it does not generate value. You might get lucky and realize a capital gain by selling it after it appreciates (if it appreciates and you can time the sale correctly), but it does not create value. An investment is ownership of something that generates value. All investments are assets, but not all assets are investments.
- rolltiide 7y agoYour definition of generating value is narrowly linked to interest-bearing or dividend issuing investments. Even with that fictionally higher standard and procedurally generated definition of "investment", renting out a part of the house is generating value.
- slumdev 7y agoIf we go with the fictional notion that all homeowners become landlords, then we can start calling a home an "investment", and I will retract everything I've said.
- snowwrestler 7y agoBy your definition, a stock that does not pay dividends would not count as an "investment" either because you can only realize capital gains on it (if you get "lucky").
- slumdev 7y agoMy definition of an investment does not require that the investment return be liquid. The stock is still generating value. The house is not generating value unless you go out of your way to rent part or all of it. You could just as easily rent out bicycles or hammers, but no one would go so far out of their way to class a bicycle or a hammer as an investment.
- chii 7y agoif you lived in that house you owned, then it's generating value - for you, since you're paying yourself rent! All assets generate a return, some just do so badly (or negative returns). Anything that's not an asset is a consumable (like food).
- slumdev 7y agoDo you continue paying yourself rent after the mortgage is paid? And how is the rent "income" not offset by an equal rent expense?
- chii 7y ago> Do you continue paying yourself rent after the mortgage is paid? yes, in a sense. The fact that you're not getting paid a rent from somebody else doesn't mean there isn't value. You could think of it as opportunity cost - owning a property but not getting rent from it. > And how is the rent "income" not offset by an equal rent expense? it is exactly offset-ed if you lived in that property.
- pgreenwood 7y agoI call stocks that don't not pay dividends speculation. I do not count them as investment.
- deleted 7y ago[deleted]
- snowwrestler 7y agoI think you're not clear on the definition of an investment; it's not mutually exclusive with the definition of an asset.