Comments on: Your Home: Place To Live or Investment?

By: Derek Sisterhen

Derek Sisterhen — Thu, 29 Jul 2010 03:36:51 +0000

Great point, Peter! I actually just heard on the radio today that more and more people are turning to renting. Which, when you think of the macroeconomic impact, is a HUGE swing from just a few years ago (when everyone and their brother we're scrambling to buy houses).

The stats tell us that most people stay in a home for about 7 years before moving. With that kind of turnover, it becomes very difficult for people to realize the financial gain from home ownership. Every situation is different, but I typically tell people that it takes staying put for an extended period of time before the house becomes an actual “investment”.

By: Jaime

Jaime — Thu, 29 Jul 2010 02:37:52 +0000

Peter, the renting vs owning break down is definitely something I hope to address in the upcoming weeks. You'll come to find I'm very passionate about the choices people make with regards to real estate. I'm glad you've found the right balance for you between living expenses and saving for retirement.

Deacon, thanks for your insight.

By: Deacon Bradley

Deacon Bradley — Thu, 29 Jul 2010 01:16:50 +0000

Well said Jamie. I'm a firm believer that your house should not really be viewed as an investment at all (unless you consider a place to sleep an investment, which totally counts!). Like Leesa pointed out, a house is actually a liability if it's your primary residence.

Somewhere along the way Americans began to believe that home-equity = wealth and as you pointed out it's simply not true.

By: Peter

Peter — Thu, 29 Jul 2010 00:33:52 +0000

Jamie:
Please don't hold back; why not really discuss the virtues of homeownership vs renting vs investing in a mutual fund or annuity. I stay in an apartment and I was amazed to learrn that the avg. salary for people living in an apt. is $55,000.00. These are people who could easily afford a home.

Now with todays economy and foreclosures and short sales, there are a lot of wonderful houses that can be leased dirt cheap! So why not have your cake and eat it too. Live in your dream home and invest the difference in your retirement.

So instead of the American Dream being a chicken in every pot and a car in every garage: let's make it 'worry free retirement.'

By: Jaime

Jaime — Wed, 28 Jul 2010 21:31:44 +0000

Thanks for the welcome and your comment Leesa! I can understand the feeling of security home ownership can provide especially if you aren't overwhelmed by a mortgage. I'm fortunate mine is so filled with love and happiness it's a comfort to be in.

Jaime

By: Leesa

Leesa — Wed, 28 Jul 2010 16:44:22 +0000

You are right on target Jaime. An asset is something that creates money but that being said I feel owning a home is like an emergency fund. It is a security blanket, especially when it is paid for. Thomas Stanley says that the type of home we buy in relation to our income is a true indicator of our potential for creating wealth.

Congratulations on your new position at Lukas Coaching. I look forward to hearing more from you.

Leesa Ferrell