As a society, we view buying a home as the ultimate achievement in adulthood.
When someone in their 20s or 30s buys their first home, their family, friends and colleagues treat them like the Olympic runner that has worked her entire life to earn that gold. They’re now standing on the top of the podium with arms raised as cheers rain down.
“Congratulations, you’ve done it,” we scream.
“Congratulations on your purchase of massive debt,” we should, in reality, cheer.
Buying a home isn’t the ultimate achievement. For some it’s the right choice. For others, it’s not.
But like any investment, it depends.
I know millionaires that rent. I know others still that have seen their wealth fly by investing in a home.
It depends on the price, the location, the city, the cost of rent, the cost of repairs, the cost of insurance, the cost of interest, and the cost, and the cost, and the cost.
That’s why you should break down the math before buying a home because it’s not the end of the race and your home isn’t a medal.
It’s an investment; one that could leave you scrambling for extra funds or one that pays off over many years.
No one cheers you for investing in your low-cost, low fee index funds and renting instead. Sometimes, though, that’s who wins the race.
Photo by The Exploragrapher