Now that facebook has gone public, it seems like everyone (and their mother) is scrambling for a piece of the pie. However, we’re curious to see how facebook shares stack up against good ole’ home equity. Dona DeZube, writer for HouseLogic.com, seemed similarly cautious as she shared some interesting considerations about the two types of investments.
“The fact is, more of us are getting rich by buying and paying off our homes than by picking the next Facebook.”
DeZube goes on to offer up some a few interesting statistics from the National Center for Real Estate Research:
- 6 in 10 of us have more home equity than stock equity.
- A fifth of Americans’ total net worth is home equity.
- Home owners accumulate, on average, $167,000 in their lifetimes, compared to $42,000 for renters.
- The median wealth for the poorest American home owners, those earning less than $20,000, is 81 times that of renters with similar income.
A recent study into the fluctuations in home prices found that, “Buying was still more likely to generate wealth than renting, simply because renters are more inclined to spend instead of save and invest in stocks.”
The fact is that even though renting may feel like the cheaper route, the “forced savings” incurred via home ownership is far more likely to lead to wealth than renting.
“Many of us simply don’t have the willpower or motivation to save our discretionary income and invest it in stocks.So unless you’ve got the inside track on the next hot future IPO, keep making your mortgage payments.”