STOCK MARKET WATCH - Wednesday, 1 February 2012

[Tansy_Gold]

91. I didn't say it was easy

and I did point out (somewhere) that TPTB have made it more and more difficult. But under normal conditions, home ownership is still the best route to stable wealth and the establishment of a viable middle class.

I own my home free and clear because my husband and I worked damn hard to make the payments. We refied not for lower payments or to cash out equity but to pay it off in 19 years instead of 30. We never cashed out any equity. When I sold that house after his death, I didn't trade "up" but traded "even."

I've watched too many friends lose everything because they either got greedy with what they had, or they thought renting was cheaper. No maintenance, no taxes! When they realized they were paying for maintenance and taxes through the rent -- and a profit for the landlord on top of it -- it was too late. They'd poured 20, 30, 40 years of rent money down the drain and had nothing to show for it.

One couple, now in their late 60s, just saw their rent go from $1200/mo to $1550, because the landlord died and the heirs wanted to make more money. Oh, they're free to move to a cheaper place, but that means coming up with moving costs as well as deposit on a new place, if they can even find one that's cheaper. As the wife told me a couple months ago, when they got word of the rent increase, they should have taken the "savings" they got from renting all those years and put it into buying.

The mobility factor is one thing; lack of job security and stability are another factor. But at the end of the day, if all you do is rent all your life, you have nothing. If you CAN buy, and you can do so sensibly, home ownership remains IMHO the best way to build wealth. I know the aristos don't like that; they want to keep it all to themselves, and they're doing a damn fine job of it.