Millionaire to Millennials: Buy Now!

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Self-made millionaire David Bach was quoted in a CNBC article explaining that “the single biggest mistake millennials are making” is not purchasing a home because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Times bestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Times bestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Today bestseller lists.

He has been a contributor to NBC’s Today Show appearing more than 100 times, has been a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS, and has been profiled in many major publications, including The New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, The Washington Post, The Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Homeownership Offers Stability & Wealth Creation

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The most recent Housing Pulse Survey released by the National Association of Realtors revealed that the two major reasons Americans prefer owning their own home instead of renting are:

  1. They want the opportunity to build equity.
  2. They want a stable and safe environment.

Building Equity

In a recent article by The Mortgage Reports, they report that “buying and owning a home is the essence of ‘The American Dream.’ Each month, your housing payments go toward owning your home instead of renting it; building your personal wealth and assets instead of someone else’s.

History has shown that homeownership is a clear path to wealth-building, with homeowners boasting a net worth [that is] multiples higher than the net worth of renters.”

Family Stability

Does owning your home really create a more stable environment for your family?

survey of property managers conducted by rent.com disclosed two reasons tenants should feel less stable with their housing situation:

  • 68% of property managers predict that rental rates will continue to rise in the next year by an average of 8%.
  • 53% of property managers said that they were more likely to bring in a new tenant at a higher rate than to negotiate and renew a lease with a current tenant they already know.

We can see from these survey results that renting will provide anything but a stable environment in the near future.

Bottom Line

Homeowners enjoy a more stable environment, and at the same time are given the opportunity to build their family’s net worth.

Millionaire to Millennials: Buy a Home!!

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Last week, CNBC ran an article quoting self-made millionaire David Bach explaining that not purchasing a home is “the single biggest mistake millennials are making” because buying real estate is “an escalator to wealth.”

Bach went on to explain:

“If millennials don’t buy a home, their chances of actually having any wealth in this country are little to none. The average homeowner to this day is 38 times wealthier than a renter.”

In his bestselling book, “The Automatic Millionaire,” Bach does the math:

“As a renter, you can easily spend half a million dollars or more on rent over the years ($1,500 a month for 30 years comes to $540,000), and in the end wind up just where you started — owning nothing. Or you can buy a house and spend the same amount paying down a mortgage, and in the end wind up owning your own home free and clear!”

Who is David Bach?

Bach is a self-made millionaire who has written nine consecutive New York Timesbestsellers. His book, “The Automatic Millionaire,” spent 31 weeks on the New York Timesbestseller list. He is one of the only business authors in history to have four books simultaneously on the New York Times, Wall Street Journal, BusinessWeek and USA Todaybestseller lists.

He has been a contributor to NBC’s Today Show appearing more than 100 times, has been a regular on ABC, CBS, Fox, CNBC, CNN, Yahoo, The View, and PBS, and has been profiled in many major publications, including The New York Times, BusinessWeek, USA Today, People, Reader’s Digest, Time, Financial Times, The Washington Post, The Wall Street Journal, Working Woman, Glamour, Family Circle, Redbook, Huffington Post, Business Insider, Investors’ Business Daily, and Forbes.

Bottom Line

Whenever a well-respected millionaire gives investment advice, people usually clamor to hear it. This millionaire gave simple advice – if you don’t yet live in your own home, go buy one.

Fiddler on the Roof

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“I’d build a big tall house with rooms by the dozen right in the middle of the town.” Fiddler on the Roof.

My Dad always sang an old hymn that stated “I’ve got a mansion…just over the hilltop, in that bright land where, we’ll never grow old.”

Either way you look at it, Dad and Tevye had it right. The concept of homeownership and owning a home is so large a part of the way we think. It is a sign of wealth and not ridiculous wealth…just comfortable wealth. It is the fact that we own something of our own. We have a home. Our home. It’s our mansion.

What a delicious thought.

#home #homes #realestate #mansion #ownership #rich #wealth

Building Wealth: First Rung on the Ladder is Housing

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How Housing Matters is a joint project of the Urban Land Institute and the MacArthur Foundation. It is “an online resource for the most rigorous research and practical information on how a quality, stable, affordable home in a vibrant community contributes to individual and community success”. A recent story they published, The First Rung on the Ladder to Economic Opportunity Is Housing, discussed the importance of having affordable housing available to as many families as possible because:

“The ladder to economic success can stretch only so high without the asset-building power of homeownership. Home equity provides Americans with the ability to send their children to college with less student loan debt and is the primary source of funds for retirement. Half of the assets of Americans over age 55 are in their home.”

Bottom Line

We have often posted that the net worth of a family owning a home is 45 times greater than that of a family that rents. That is not a coincidence.

A Million+ Boomerang Buyers about to Enter Market‏

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TransUnion recently released the results of a new study titled The Bubble, the Burst and Now – What Happened to the Consumer? The study revealed that 1.5 million homeowners that were negatively impacted by the housing crisis could re-enter the housing market in the next three years. TransUnion defined “negatively impacted” as…

“…those who were 60+ days past due on a mortgage loan, lost their mortgage through foreclosure, short sale or other non-satisfactory closure, or had a mortgage loan modification between the Bubble and Burst.”

Other interesting findings in the study:

  • During the mortgage bubble in 2006, 78 million consumers, or 43% of credit-active consumers in the U.S., had a mortgage
  • More than 8% of these consumers were “impacted”
  • 5 Million consumers will again be eligible for a mortgage in the next four years

Here are the number of consumers who will meet mortgage guidelines over the next four years.

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Bottom Line

If you are a family that experienced the impact of the last housing crisis, now may be the right time to again buy your own home.