A Home As An Investment

Most young people don't look at buying a home as an investment opportunity, although they should because a home is the most valuable asset most people will ever own. Usually, when a home is bought, by individuals or by couples, it is thought of as a place to live and to raise a family, not as a vehicle for future profits.

A home is actually more than just a place to live. A home, especially one that is free of mortgages and other liens, is a true blessing for most people, especially those who are either nearing or are already in their retirement years.

Many baby boomers are approaching retirement age, and it is a good feeling to know that, with all the prior years of talk recommending diversification and taking equity out of homes and investing in the stock market, many were smart enough to leave their equity where it would do them the most good when they needed it the most, and that was in their homes.

Refinancing your home and taking the equity out to invest in other ventures sounded good, and it worked for some people, but many people who did, now find themselves with high monthly mortgage or rent payments that may be with them until they become eighty or ninety years old.

There is nothing wrong with investing in the stock market, but it is not good for every one. If you are looking to get rich, the stock market may be just the place for you, but if you are looking to invest in a smart, strategic vehicle that is relatively safe, real estate is a good start.

Real estate, like everything else, has cycles. Property values go up when money is flowing freely in the economy, but it may go down or stagnate when money is tight.

During periods of inflation or recession, or in a market where there is little or no movement either way in pricing, people still need homes and they will continue to buy, though not at the same pace.

The great thing about the housing market is that it is the power that drives the economy most of the time. When the housing market booms and people can afford to buy homes, all segments of the job market is affected in a positive way and the economy grows as a whole. When the housing market is in a downturn, so goes the rest of the economy.

Regardless of the news concerning homes and other properties, housing costs, interest rate increases or decreases, foreclosures, bankruptcies, and other economy related news events, home ownership is still the best investment for most people.

Owning a home, as a place to live and to raise a family, and as a serious investment vehicle, is still the right choice for most Americans. Home ownership is still the American dream, and those who have the impetus to know that there is no time like the present to buy property, are buying everything that they can pick up and hold on to.

With news of social security becoming questionable in years to come, and many companies lowering expectations for retirement incomes, buying a home is still, and will always be, the way to go.

Thirty years may seem like a long time to pay for anything, but 30 years is going to pass, and buying a home with a thirty year loan may be the best course of action for most people who are not rich. Who doesn't want to live without a house payment when they retire.

In other words, social security and a large retirement income may not be there for you when you become elderly and need a place to live. Buying a home today may be the best investment you will ever make for yourself, and your family.

Finance Topic of the Month: Federal Deposit Insurance Corporation (FDIC)