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How do you view your home? Is it an investment that you live in or a place that you live in that is an investment? I imagine it is partially both but in different degrees for each of us.
A house is a financial investment, but also provides a place to live, raise a family and establish community...no doubt, there is "value" in all of this. But how much?
Do we as Americans need to change our paradigm and put more of our investment in the value of the home as a place to live.
You may look at it any way you wish. I think it is only smart to consider the investment value of one of the biggest purchases you will ever make. Why do Americans as a group have to do anything? I think the only reason some feel this way is because it bothers them that others make money investing.
How do you view your home? Is it an investment that you live in or a place that you live in that is an investment? I imagine it is partially both but in different degrees for each of us.
A house is a financial investment, but also provides a place to live, raise a family and establish community...no doubt, there is "value" in all of this. But how much?
Do we as Americans need to change our paradigm and put more of our investment in the value of the home as a place to live.
Probably a bit of both for most folks. It's a poor investment though. I view my home as simply a place to live. If you actually did a spreadsheet on home ownership costs, with taxes, repairs, insurances, etc., then you would quickly see that if your goal was to make money then a home would not be the place to park your investment funds.
Having said that, my home has been paid off for a number of years now, so living here is relatively inexpensive (not to mention the fact that I like both the home and its location).
It's hard to separate the two unless prices are going up.
What I mean is that if you buy a house and while you're living in it and paying for it, it's appreciating, it's easy to not think about the financial aspect of it and simply make it a happy home. After all, what's to worry about?
However, knowing the statistics of what money stress can do to families and the statistics of current housing trends, it'd be foolish not to consider what the impact might be if you attempted to make a peaceful home out of a building that may become a threat to your future financial security. Growing old in an underwater albatross that will require the you to leave sizable money on the table at closing is a nightmare, not a "home."
Social security is fading fast. Anyone who doesn't consider their biggest purchase from an investment/risk standpoint is being naive and reckless.
My investments make me money. I have only spent money on my home so far. If I ever sell then it will become an investment. I have a business that I put money into and now it pays its own way so to speak. I have a retirement account that I pay into every check and it has made me more money than I have put into it over the years. My house has only cost me money so far. I am assuming that will be the case till it is sold. We love the home, it is our first home.
It's not an investment, it's a liability. My primary residence is my #1 liability to my cash flow. I try to minimize this drain by taking advantage of the tax deductible and buy in area with potential in appreciation.
It's a luxury vanity to own your primary residence, as a rental will put much less dent on your cashflow but usually are lower quality and you cant renovate it the way you want.
But i have no illusion about it being any kind of "asset", because it's not.
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