Monday, March 6, 2017

The Connection

The Connection Between Home Prices & Family Wealth! Let's suppose you put $20,000 in savings in a bank account or other investment program of your choice. You will likely earn some interest on that money (hopefully) but the amount you earn is based on the amount you invest. Now, let's suppose you invest that same amount of money into a home valued at $200,000. You have either a roof over your head or an investment property to rent out AND you earn appreciation on the $200,000 not just your $20,000. Let's assume you were able to earn 3% on your $20,000 - that would be $600. Let's assume homes appreciate at only 3% - you would earn $6000 on the $200,000 home. Other things to consider - the $600 is taxable; the $6000 is appreciation. The $6000 is a benefit of having a roof over your head and not paying your landlord's mortgage. And that is how wealth for your family - or even for yourself if you are single - increases. Read more in today's article