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If you remember just one thing, it's that no asset class goes up forever. Some assets tend to trend up overtime more than others, but they all have times where
by eloff 4y ago
If you remember just one thing, it's that no asset class goes up forever. Some assets tend to trend up overtime more than others, but they all have times where they go down too. Make sure you can survive that.
People buying homes in places that have only gone up in the last 40 years need to consider that that might keep going up for another decade, or they might be cresting the hill before correcting.
- fdgsdfogijq 4y agoThis is how you end up a wage slave
- lumost 4y agoHousing has risen some 40% over the last two years, while this is certainly insane. If the trend continues the downside risk either becomes massive - or a mere 30% correction becomes inconsequential to the principal balance.
- baskethead 4y agoMy house almost tripled in 8 years. I made $2 million profit from selling my house last year.
- adamsmith143 4y agoAnd you did what, moved into a van down by the river or moved into another overpriced house immediately after?
- baskethead 4y agoHomes have been going up in price for far longer than 40 years. The only time they have dropped is the Great Depression and the Great Recession. Otherwise there isn't an asset class that is more reliable over the long haul than real estate.
- ChuckNorris89 4y ago>Homes have been going up in price for far longer than 40 years. Homes going up is not the problem though. Yes, they've been going up for longer than 40 years, but back in the 1950's their growth was basically tracking inflation and wage growth, or even going down in value since they were seen an any other depreciable asset, just a place to live in till you die. It's in the last 40 years that housing massively outgrown wages, as it became a speculatory investment vehicle instead of just being a place to live, plus the introduction of NIMBYISM regulations to restrict supply, and that's where the issue is.
- eloff 4y agoI strongly disagree with this. First off homes fell sharply in value just as recently as 2009. Secondly over time, globally, real estate barely keeps ahead of inflation. About 3% per year. For much of the last century you did about as well parking your money in a savings account. Finally, equities in globally have returned about 6.5% per year. That's much better. Better still in the US where they did more like 10.5%. Real estate as an appreciating asset is a lousy investment. If it's a place to live that's sometimes a different matter. If it's a rental property that's also different.