Both sides of the property debate have merit. However, I think most people confuse the definition of wealth in terms of standard of living
I can only increase my standard of living with stocks if I earn a dividend. With bonds it's through a coupon payment and with property it is through rent.
If my stock portfolio was worth $500,000 I may earn $15,000 in dividends. Therefore, I have $15,000 more to spend on myself and my family which increases my standard of living. With property I need to earn $15,000 in rent above interest payment to improve my standard of living. If rent does not cover payments, and I am forced to pay the difference, then that sum of money actually decreases my standard of living as I have that amount less to spend on my family each year. One solution would be to flip houses annually and live off the additional income that provides. So buying a property and holding it for life does not improve your standard of living unless you are cash flow positive, i.e. no debt and renting
- Forums
- Property
- does property reduce your wealth
Both sides of the property debate have merit. However, I think...
-
- There are more pages in this discussion • 172 more messages in this thread...
You’re viewing a single post only. To view the entire thread just sign in or Join Now (FREE)