(Nov 10, 2006)
I read this article about people said to be Canada's best individual investors and one guy said that he essentially doubled his net-worth through luck by putting a down-payment on a couple of condos that seemed reasonably priced that doubled in a few years or so. Also some in my family in California who run businesses have said to me that owning a business didn't make them rich or that it wouldn't make you rich, but that owning property does. So I realized that when one buys property such as a house, one is essentially buying an asset on massive margin. In the same sense that one could buy stocks on borrowed money, you're buying a house through usually 75-90% debt. So naturally if it appreciates in value you're really up a lot in the same way you could be if your borrowed stocks were up a lot. About the only difference is that people seem to think that real-estate never goes down in value (which is false) and that they are generally less volatile in terms of price-changes than stocks.
I read this article about people said to be Canada's best individual investors and one guy said that he essentially doubled his net-worth through luck by putting a down-payment on a couple of condos that seemed reasonably priced that doubled in a few years or so. Also some in my family in California who run businesses have said to me that owning a business didn't make them rich or that it wouldn't make you rich, but that owning property does. So I realized that when one buys property such as a house, one is essentially buying an asset on massive margin. In the same sense that one could buy stocks on borrowed money, you're buying a house through usually 75-90% debt. So naturally if it appreciates in value you're really up a lot in the same way you could be if your borrowed stocks were up a lot. About the only difference is that people seem to think that real-estate never goes down in value (which is false) and that they are generally less volatile in terms of price-changes than stocks.
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