Mark’s Market Update – 9/10/2021
I’ve had the pleasure of helping the starry-eyed first-time homebuyer buy their first home, and helping a seasoned homeowner expand their Real Estate portfolio. Just starting out, barely able to qualify to super-well qualified and driving a Porsche. And, I’ve learned one absolute: I’ve never met a rich person who did NOT own real estate and was renting. Never. Not once.
That’s a very telling statistic, which says that one of the most important things needed to develop wealth – is to own a home.
I’ve learned that there are four aspects of building wealth – and the first (and, arguably, the most necessary) one is owning a home. We’ll talk about each one over the course of the next four Friday Mark’s Market Updates.
Here’s are four reasons homeownership is so important (there’s far more than these, though):
- First – you’re not paying money to your landlord and making their mortgage payment for them.
- Second – you’re establishing your own equity in an asset that appreciates over time (also known as “good debt” – and probably the only good debt that exists.)
- Third – it creates generational wealth (wealth that can be passed on to the next generation).
- Fourth – it creates a home for you and your family to grow up in. It creates roots in the community.
Simply put – rent, while a necessary thing for some and an absolute for people in certain stages of their lives, is not a long-term solution. It never has been and never will be. Some people, however, have a fear that owning a home creates this long-term commitment that could go sideways down the road if something changes with job, or income, or family.
True – but, I would counter that with some sage advice that my wife told me when I started wobbling (translation: Freaked out) for the same reason when we were buying our first home:
“Mark – for as long as we live, we’re going to have to live somewhere, right?”
“And, that somewhere we live is going to cost us something, right?”
“Then, why not have it work for us – and gain equity and have something we can call our own if we’re always going to have to live somewhere and it’s going to cost us something. We’ve rented for four years – and have NEVER had a problem – why do you think we will, suddenly, once we own a home?”
I don’t give my wife enough credit. In some respects, she’s the most brilliant woman I know – and I’m glad that she decided to say yes to the date that last day of school my junior year at NMSU.
So – spread this far and wide: Own a home. It is, absolutely THE most critical cog in the four stages of wealth building. I can talk about the fear – I’ve experienced it – and let me help you or your clients get past it.