The alternative, renting, has no chance at generating equity. People have to live somewhere. One option does have a high probability of increasing a family’s wealth over the long term. The other has zero probability of doing so. This article carefully prunes the premises so as to lead to an inevitable conclusion. Feels like intellectual dishonesty.
Why your house is a terrible investment
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Re: Why your house is a terrible investment
#12In a vacuum, sure it's a bad investment. A house as described in the article is basically one that you buy and neither live in nor rent out. An empty and unused house is indeed a bad investment. When people say a house is a good investment they mean, "Given that people need someplace to live and will be paying the cost and maintenance for lodging, a house is a good investment since that cost benefits an asset you own…
It was also a very simple way of making people save money for retirement: the bank would require you to slowly pay off the loan, so in the end, at least you'd own a house. In a world gaining population, you also have a speculative aspect, but it was a good idea even without that. At least it protected the real value of your savings.
With laxing repayment requirements, volatile markets, and easier access to other investment types, times have changed. If you know where you want to live, it's still an easy way to save money, but a stock market index fund is equally simple to use.
Re: Why your house is a terrible investment
#13I think the way people buy homes here in America is no different than the way we consume other goods. Two things matter above all else in the decision process: 1. What other people think of us(although we refuse to admit it) and 2. indulgent, first world, luxurious comfort.
Re: Why your house is a terrible investment
#14While a home may not be a good monetary investment, it is a good investment for social and family stability=> have a place to go home to, store your stuff, have a family hangout space, all with predictable monthly payments is great to have.
Re: Why your house is a terrible investment
#15My house is a wonderful investment: it is mine and whatever happens my family has a roof.
This is beyond any pecuniary aspects.