The Secrets to Building Wealth Through Home Ownership
Building wealth is part of the American Dream. And yes, that dream is constantly in flux and ever changing depending on who you are and the unique goals you bring to the table. However a stable piece of that dream seems to be building wealth and moving towards financial freedom. Part of that involves owning a home. It’s not just about security and having that piece of the dream to show for yourself. It’s bigger than that. Owning a home can help you build wealth and move into greater financial freedom, for yourself as well as future generations.
What is wealth exactly?
In succinct terms, wealth is all the assets one owns minus any and all debts you’ve incurred. That’s the more technical definition that goes along with the math and simplifies you to numbers on a page. However, wealth means greater freedom. Having more wealth means the ability to save for retirement, achieve financial freedom, have more security and mobility to make financial decisions, and the means to save for future generations. Wealth allows you to live more fully in sync with your other dreams and goals.
How does owning a home help build wealth?
There are more ways to build wealth than home ownership. Some people achieve this through stocks and bonds. Others save from their income and pay off debt over time. However, home ownership is one of the most effective ways to build up wealth over time. Here are a few reasons why:
- Provides a stable investment: While you are able to live in this house and make it a space to call home and your own, it’s also providing an investment. You make monthly mortgage payments and those also double as monthly investment payments. It’s like an automatic savings account because each payment actually builds your investment.
- Provides a stationary monthly payment: You won’t have to worry about rent increases each year. You know what your fixed mortgage payment will be each month and can budget around that without the worry of rising rent.
- Provides tax breaks: You may be eligible for a tax deduction when you buy, especially if you’re a first time homebuyers. Look into what tax incentives and breaks are available to you.
- Provides you with a generational asset: You can pass down the home itself or the equity you’ve built up through owning a home to your children and grandchildren.
- Provides greater financial freedom: As you own your home for longer and continue to pay the monthly payments, you’ll find greater freedom to invest in other areas. You know your budget and that stability allows you to invest in stocks, retirement or other ways to save and grow your wealth. Not to mention, if you pay off your mortgage, you can really build that wealth and retirement without those monthly payments. Or you can always sell one home and purchase the next one, perhaps at a greater cost, thus building your wealth further.
Consider all these aspects of home ownership to determine when it’s the right time for you to take that step. I’m here to help with any and all questions you have along the way. Contact me today to learn more!