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Why would someone want all their net worth in real estate properties rather than diversify with other investments, which if they wanted to could also still incl
by gdulli 5mo ago
Why would someone want all their net worth in real estate properties rather than diversify with other investments, which if they wanted to could also still include the real estate sector?
- Esophagus4 5mo agoFrom people I know: they aren’t aware of / comfortable with traditional financial instruments, so they just buy houses and have the rest in a savings account. Their houses aren’t even “investments” to them, they’re lifestyle properties that also may increase in value.
- sidewndr46 5mo agoThis, 100x over. You invest 1 million USD in a house. The house loses 90% of it's value. You still own the house. You can live in it, hopefully you get some benefit from the investment, even if it has no market value. You invest 1 million USD in the stock market. It loses 90% of it's value. You basically have nothing but a tax write off on future gains.
- Esophagus4 5mo agoBut at least with owning stocks, I can vote in a bunch of proxy things every so often… which will keep me busy so I don’t have to think about all the money I lost :) I guess the housing equivalent would be an HOA, but honestly I would rather lose 90% of my money than sit through an HOA meeting…
- sidewndr46 5mo agoI'm guessing this is a joke, but my advice would be not to purchase property subject to the tyranny of an HOA
- Esophagus4 5mo agoYes, just having fun :)
- energy123 5mo agoFor tax efficiency. The US, UK and many other countries have variations on this theme that the house you live in is taxed less than stocks, bonds or second properties. This creates a distortion where people buy the biggest house they can afford, because everything else gets taxed.