While I watched my stock wallet sadly by more than 10 %, I find the serenity in my paid house. Regardless of the amount of stock market tanks, it is comfortable to know that I will always have a shelter to care for my family.
It is funny, but only active investors, people responsible for their families investment may feel, or that personal finance lovers may feel an increasing feeling of tension during stock market corrections. If you are practicing a DIP purchase, as I always do, you may feel like a frequent mental war where the stock market continues to dip, making you feel like you are fool.
Imagine the bet on red 15 times in a row in the roulette game, only for black to appear every time. This is exactly what this last correction looks like. Ultimately, the victory will come – but by that time, the losses may be already very slope.
For my wife, who does not follow the stock market regularly, this last correction had no little impact on its mood. Meanwhile, my young children do not realize the risks of increasing stagnation and mass demobilization operations that loosen the horizon. They just want to play and fun.
For me, I had to work hard so that I wouldn’t leave three weeks from the stock market without a stop that negatively affects my mood with my family. It was not easy, as I found myself less patience than usual. This last discomfort is a good reminder why the best real estate on stocks to build wealth.
If you are responsible for your family’s money and do not enjoy a lot of money in the stock market quickly, think about paying your home. I have paid several homes over the past ten years, and I have never regretted any of them.
The value of the paid house is greater than just money
When the mortgage rates are low, some people love to mock the paid homes. Although about 40 % of home owners do not have a mortgage, these critics somehow believe those who do not have one fool. “You can earn a lot of money in stocks and other investments by getting a mortgage and not paying it!” It is their most common criticism.
Although it is certainly correct that taking advantage of the mortgage can lead to greater possible returns, critics fail to identify the value provided by the paid house: Low tension and an increase in peace of mind. The bigger, the less debtor to financial institutions. Instead, I want to simplify my life with fewer bills and less debt.
For me, the feeling of financial security is worth Much more An additional 4-8 % per year will earn an investment. This is on the assumption that things are going well. Sometimes, weak investments of money, treasury bonds, and real estate. Sometimes, you can even lose a lot of money instead.
With a paid house, no one can force you to leave if you don’t want it. Meanwhile, every month without paying the mortgage improves your cash flow, giving you more flexibility and peace of mind. What a wonderful situation to be in it, especially with the ghost of the recession, waving on the horizon.
Those who criticize homeowners without a mortgage
What I also realized about people who make fun of paid homes is: How many can pay their homes themselves? I doubt it is more than 50 %. After all, one of the main reasons that people invest is to buy and eventually pay the house.
So they may want those who criticize homeowners without mortgages secretly to be free from mortgage as well, but they have no means. And because they cannot pay their homes, the only thing remaining is to criticize those who have. This is the human nature – in an attempt to drop others to devote themselves.
As your home shares are high, your feeling of financial uncertainty decreases. In fact, the more you feel certain, the more confidence you will get to buy the decline when the uncertainty is higher. When the final mortgage is paid, the feeling of financial achievement is invaluable.
The paid home can also be estimated
Here is the thing that revolves around your paid home, it can make you money or save you a lot of money as well.
In normal times, real estate tends to estimate 4-5 % annually. Certainly, this is 10 % less than the historical S&P 500. But the estimate of 4-5 % on a large investment can generate a much greater return than your stock portfolio offered. If the debts of mortgage are taken, then the return on criticism is higher.
During the decline period, real estate tends to retain their value as well as investors looking for the integrity of bonds and concrete assets that generate income. Instead of estimating 4-5 %, real estate may rise only 0-3 %, while stocks may decrease easily 5-20 %. However, since you do not pay the rent, your actual return is actually higher through the return of the market rental.
Finally, in a severe decline, both real estate and shares declined. But while residential properties may decrease by 20 % over a period of several years in the worst realistic scenario, stocks can disrupt 50 % within months. However, since homeowners do not examine a daily symbol, the experience appears less tired. Moreover, homeowners enjoy their homes.
When you own a paid house, the estimated rates-whether or down-do not affect you as much. Instead, your focus on living at your best while paying money to the background. On the contrary, the final game to invest in stocks is to make a profit to buy something fun. Thus, the attention of all fluctuations can be distracted.
Paying all money to the house comes with a psychological obstacle, but in my experience, peace of mind is worth it.
The paid house gives you confidence to live better
We all need food, clothes, shelter and transportation. If we can lock our shelter costs, everything becomes more affordable. And if you take a step forward by paying your home completely, you will find yourself living with more confidence and freedom.
Want to take a vacation? Go for it! You die to leave your job for a person that fits your emotions but pays less? No problem. Do you want to buy S&P 500 strongly? You are betting. Are you thinking about starting the family last? Just make sure they are one.
Yes, in the long run, the investment in stocks is likely to generate larger returns. For this reason, the vast majority of homeowners are also investing in stocks. But while retreating and dresses, a paid house shines with brightness. If you have one, embrace it. If you do not do that, get to know its value.
Certainly I do not want our economy to collapse. Financial, I don’t like more stocks for apostasy and outperform my real estate portfolio. But if this is what the prices of eggs must decrease and to provide our aluminum and steel industries, let it be. Those who have paid homes will be better off than those who do not have.
Reader questions
Does any of you have a paid house? If so, what is your feeling about being free of mortgage during the corrections of the stock market and economic slowdown? As you get old and wealthy, have you found yourself less focused on increasing profits? Why do some people who hold real estate mortgages criticize homeowners without one?
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