The American wealth guru will hammer it home again and again. When you want to build wealth, pay off credit cards, save, and own your home. Whether it’s your first home, a vacation property, or an investment in luxury real estate, owning real estate is one of the most reliable ways to secure and grow your financial future.
Real Estate is just what the name implies, a real asset. It is tangible and valuable for its own sake, the value holds lower correlation than other assets like stocks and bonds, the price is always negotiable and your real estate is worth exactly as much as you are willing to sell it for. Hold on to your home.
Real estate has long been considered a tangible asset with the potential to appreciate over time, giving you the opportunity to build equity as the market value of your property increases. Unlike other investments that can be unpredictable, homes offer a level of stability that few other asset classes can match.
One of the key advantages of owning a home is the ability to leverage your equity. Over the years, as you pay down your mortgage and the value of your home appreciates, your equity builds. This equity can be used to finance other significant purchases, invest in additional properties, or even serve as a safety net for retirement. By using the equity in your home strategically, you can create additional pathways to wealth.
Homeownership also offers significant tax advantages. From mortgage interest deductions to potential capital gains exclusions, owning a home can reduce your taxable income, adding another layer of financial benefit. These tax incentives are often overlooked, but they can make a substantial impact on your wealth-building strategy.
The final reality I would like top point out, for those of you still renting, is the TRUE cost of shelter. A mortgage may cost slightly more or slightly less than rent, it is typically a negligable difference that is defined as "cash flow" or the amount of money you pay each month for shelter. Regardless of the "cash flow" difference, the number I encourage all of my clients to look at is the wealth difference. This is the total difference between cash flows for rent and the cash flow from your investment, less what goes back into your pocket. That's right, even if your mortgage may be higher than your monthly rent from a cash perspective. The difference to your total wealth picture is nearly always positive.
Owning a home is more than just a financial decision—it’s an investment in your future security and quality of life, and I am happy to speak further on how we can secure your financial future together.
