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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.
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