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Originally Posted by Red
4%? How do you figure? Include the management fees and put a cherry on top to make it worth it. Remember, you don't just want to break even with what a mortgage costs you, you want more.
And 5 years is not long term. I have a fund that's done double digits in the last 3 years, but that's not a rule for all funds. Also don't forget, some funds have up to 2% management fees.
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You should be looking at your returns net of fees anyway. I don't see the point of including them into the equation! The long-term average of most funds is over 5% (as I mentioned earlier), so people can make money with leveraged investments, end of story.
The fact is that buying a house is the exact same thing as a leveraged investment. You put some money down, borrow a lot more and pay onto this every month. If the market falls out from under you then you have a few choices; buy more houses, sell at a loss, hold and pay the loan more in hopes that things go up. This is the same for an investment.