Buying in Brooklyn

Why buy, a national perspective

As I continue to try to convince you that there are a myriad of reasons why it is extremely important to get off the renters bandwagon, and own a home, I came across this article written by Anand Chokkavelu, an editorial director for the Motley Fool investment advisory. If these statisticsĀ  don’t make you an active buyer, I don’t know what will! Here it is;

 

“Rent vs. buy: The buyer’s trump card
When the Federal Reserve tallied it up in 2010, the median household had $77,300 socked away in net worth. In other words, when you look at a family that’s doing better than 50% of us and worse than 50% of us and you add up all their assets (stocks, bonds, house, cars, IRAs, 401(k)s, gold, equity in private businesses, checking accounts, savings accounts, certificates of deposit, cash under the mattress, etc.) and subtract out all their liabilities (mortgages, student loans, credit card debt, etc.), you end up $77,300 to the good.

How much of that is due to owning a house? Here’s a picture

 

 

It’s pretty stunning that for all the hidden costs and arguments about better investments, housing makes up more than 60% ($47,500/$77,300) of the median family’s cushion against bankruptcy.

Now you still may not be convinced. You may be clinging to the thought that those without homes should be able to put the money they don’t spend on curtains and sump pumps to better investment use. It’s a compelling theory refuted by reality. Here’s the picture:

That’s over a 30-to-1 net-worth advantage in favor of homeowners. Anticipating the sharp readers who will argue that this could be demographics (e.g., older people, more educated people, families, or high-income people are more likely to own houses), I looked further. Households headed by folks under age 35 have a median net worth that’s about double the $5,100 median net worth of non-homeowners. Households headed by folks with no high school diploma have saved more than triple what the non-homeowner has. So have single folks with no children. And, yes, even families in the bottom 20% of income have more net worth than the non-homeowner.”

That’s what I’ve been trying to tell you!!! Homeowners across the board, even those in the bottom 20% of income earners have 30 times the net worth than a non homeowner. If you don’t own a home, please call your local real estate broker, and start the process. Your future wealth depends upon it.

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