Quote:
Originally Posted by DoubleF
I personally view my primary residence as a consumptive good. A secondary residence+ can be considered an investment.
I keep meeting people who think their primary residence is an investment. I've had weird conversations with people who just regurgitate and never think critically about the whole scenario. They never think about the end game. Usually it's something like:
Investment, in what sense?
"Oh, you can sell it and take the gains."
And then what? Rent?
"Obviously you don't sell it if you need to live in it."
Then when would you ever be able to sell the home?
"I don't know, but it's an investment."
I mean, I own my own home. In a horribly misguided financial way, I view it as a vehicle to force myself to save. I wouldn't have the diligence and control to properly save excess money I earn. I'd probably blow a huge portion of it on things I wouldn't normally do if the cash wasn't liquid (like a home).
The rental perspective is starting to get more and more accepted vs home ownership, at least in my friend circles. That being said, I don't know of many individuals who rent and have big savings. I think I literally know of 1 guy like this and he's not even a normal millennial. He's planning to retire in his mid 30s, has very few vices, sits on a pile of cash and has a few minor business ventures set up in anticipation of retirement.
I mean, geez. That's the way to do it if you are diligent and disciplined isn't it? I'd be elated to be mortgage free at 35. This guy is contemplating retirement at the age of 35 without lucking out on building some app or program.
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It's more like a retirement savings plan. Theoretically, you will accumulate housing equity until you have an empty nest and then sell it for a smaller place and use the excess as a large chunk of your retirement savings.