Greetings!Most of you already own one of these investments. Those of you who don't,pay rent to use one of these.(temporary situation I hope) Banks own a lot ofthese. I am talking about my favourite investment, my house. I am not talkingabout the specific house I am currently living in, but houses in general. I will giveyou a little background to tell you why.In 1984 my bank informed me not to use my credit card anymore since I was notmaking any payments. I was unemployed at the time and unable to make any monthlypayments. (In hindsight, I should have been able to make the minimum paymentjust to keep them happy. I didn't realize how this would affect my creditrating.) I moved to a different city for a job. Within a year I bought thecheapest single family residence I could find in a decent neighbourhood. It wasgood timing, since we were in a very depressed housing market. I fixed up thathouse and sold it within 18 months for a 40% profit. I then bought another house,fixed it and sold it. I then bought a third, fourth and a fifth house, making alittle profit each time I sold. This all occured within 6 years. While owningthe houses, I put every spare dollar into paying down my mortgage. I paid cashfor my fifth house. (Using $8000 from a line of credit.)What a wonderful feeling. I have since sold that house and bought a house in thecountry with 17 acres. I also have a second house in town that I am fixing upand paying down that mortgage.Reasons why this was a good investment. 1) You have to live somewhere. Its better to make mortgage payments toward something you will own than to pay rent to someone else. 2) No restlessness with the up and down markets. I don't get up each day to check the value of my house. 3) No capital gains on my profits. In Canada any increase in value of your principal residence is tax free. Mortgage payments are not deductible though. 4) The incentive to pay down the mortgage caused me to be more frugal. When I don't have a mortgage I tend to spend it elsewhere. 5) Most of my stock investments I have made end up being JWTIGBTWIPFI. That is short for 'Just Wait Till It Gets Back To What I Paid For It'. With the help of The Motley Fool, I am learning to invest more patiently.My advice to anyone wanting to try this investment. Pay off your mortgage. Yourprincipal residence is always a liability (unless you take in renters). The moreyou spend in interest, the more costly the house will end up.Thank you for your time,ffourP.S. - Your house is an asset - on the mortgage holders balance sheet.
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