Quote:
Originally Posted by Slava
I've tried to avoid these threads, but that graph is scary. You buy a house in 1988 at the peak, pay 11% interest on your mortgage (which was below prime at that time) and after 20 years and roughly double your money for a compound return of about 3.52% per year. Where do I sign up?
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Are you not forgetting about the leveraging aspect?
Say in 1988 your house cost $150,000 but in fact you only put 10% ($15,000) of your own money towards the house. In 2008 you sold the house for $325,000.