Monday, November 22, 2021 / by Lynn Boyarski
When it comes to building your wealth, there are few investments as good as real estate. When you buy a house, you boost your net worth considerably. In fact, in 2016, the average homeowner had a median net worth of $231,400. Renters on the other hand had a net worth of only $5,200, according to the Federal Reserve.
That’s a HUGE difference in net worth—we’re talking hundreds of thousands of dollars. And we don’t know about you, but we would much rather have a bigger net worth.
But can renters build just as much net worth as homeowners? The short answer is yes, in some cases. The long answer is a bit more complicated.
First, to build wealth as a renter, you have to find a place to rent that’s WAY cheaper than owning a house would be. If you can’t find super cheap rent, you won’t be able to build as much wealth as a homeowner.
You then have to put all the money you would have spent on a home into the stock market, which is often volatile and requires long periods of time to get consistent returns.
So, if you want to be a lifetime renter, then go ahead. But make sure you’re investing the money you would have spent on a home in smart stocks.
No spending extra on vacations or Starbs. You have to be ruthless with your spending to make up for not owning real estate.
But of course, even if you do go this route, you’re still paying housing costs that go straight to your landlord—which is money that could be going into building wealth.
And wouldn’t it make more sense to put that money somewhere you can actually use it? Like, say. A house? We said it before and we will say it again: real estate is truly one of the best investments out there. You’re going to have to pay for housing regardless, right? Might as well turn it into a wealth-building machine.
If you’re ready to build your wealth with real estate, just reply to this blog and we will get you started!