Perfect for wealth building?

Housing in past times was a entity that was perfect for wealth building. It wasn’t liquid, so you couldn’t trade it. It wasn’t something that was priced easily or often, so you weren’t feeling the price movements, therefore we hold on through troubled times. It wasn’t something that was likely to go down in value over the long term, at least keep up with inflation. But perhaps more importantly, we all were highly leveraged. We went into the investment with only 20% equity and borrowed the rest. Plus adding the dividend of providing a place to live, Jackpot! The perfect investment, or close to it.

But now, we are too leveraged, instead of building equity, we are spending equity as if it were income, and perhaps worst of all, we are trying to buy and sell as if it were a liquid market with no sales or tax consequences.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s