Skip to main content
Message Font: Serif | Sans-Serif
No. of Recommendations: 0
intercst wrote:
Certainly there are some areas of the country where real estate has done well (e.g. Silicon Valley), but if you bought stock in some of the companies headquartered there (e.g., Intel, Cisco, etc.) your investment returns would be orders of magnitude higher.

I retired in 1994 at age 38. I'm convinced that not owning a home (I prefer to rent an apartment) was a big help. My portfolio has grown to the point where my annual living expenses are now less than 1% of assets. On a nationwide basis, the stock market has offered much higher investment returns. (Over the past 30 years, S&P500 13.67% annually vs. 5.71% annually for residential real estate. Source: Chase Investment Performance Digest, as quoted from How to Retire Rich, by James P. O'Shaughnessy, page 23.)

If you can capture that 8% difference in CAGR, you'll have a stupendous amount of money 15 or 20 years down the road.

As usual, I agree 100% with intercst and disagree with gpgraph. The only reason I own a home is because my wife NEEDS it as a security blanket. If it were up to me, we would rent. I'd rather have that money being held captive in those sticks and stones plus land roaming free in the stock market to earn far better returns.
Print the post  


What was Your Dumbest Investment?
Share it with us -- and learn from others' stories of flubs.
When Life Gives You Lemons
We all have had hardships and made poor decisions. The important thing is how we respond and grow. Read the story of a Fool who started from nothing, and looks to gain everything.
Contact Us
Contact Customer Service and other Fool departments here.
Work for Fools?
Winner of the Washingtonian great places to work, and Glassdoor #1 Company to Work For 2015! Have access to all of TMF's online and email products for FREE, and be paid for your contributions to TMF! Click the link and start your Fool career.