Your Home is Not an Investment

For most people, your house is your biggest asset and also your biggest liability. So it’s understandable to think about the financial implications of the most significant purchase you’re ever going to make. But a home is about more than what you buy it for and what you think it will be worth in ten years.

A home is the roof over your head. It’s what you miss when you’re gone too long. It’s where you raise a family. It’s where you make some of your most special memories.

Obviously there are financial considerations to take into account. First and foremost, can I afford it? And that’s pretty much the extent of it. You don’t want to be house rich and cash poor. The fact that you shouldn’t dramatically overpay goes without saying, but for the sake of actuallies, I’m saying it.

The last thing that should enter the equation when thinking about buying a house is the macro situation. At least most of the time. If you’re in a super hot housing market that went up 30% in 6 months, then yeah you should probably take that into consideration. But for most people most of the time, this isn’t anywhere near the top of the list in terms of what’s important.

A house is so many things, but an investment? I don’t know about that. I mean, okay I guess in a sense it is, given that it could be your biggest asset in retirement, but that shouldn’t drive the decision you make today.

Ben and I got into this and much more on this week’s episode of Animal Spirits.

This content, which contains security-related opinions and/or information, is provided for informational purposes only and should not be relied upon in any manner as professional advice, or an endorsement of any practices, products or services. There can be no guarantees or assurances that the views expressed here will be applicable for any particular facts or circumstances, and should not be relied upon in any manner. You should consult your own advisers as to legal, business, tax, and other related matters concerning any investment.

The commentary in this “post” (including any related blog, podcasts, videos, and social media) reflects the personal opinions, viewpoints, and analyses of the Ritholtz Wealth Management employees providing such comments, and should not be regarded the views of Ritholtz Wealth Management LLC. or its respective affiliates or as a description of advisory services provided by Ritholtz Wealth Management or performance returns of any Ritholtz Wealth Management Investments client.

References to any securities or digital assets, or performance data, are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.

The Compound Media, Inc., an affiliate of Ritholtz Wealth Management, receives payment from various entities for advertisements in affiliated podcasts, blogs and emails. Inclusion of such advertisements does not constitute or imply endorsement, sponsorship or recommendation thereof, or any affiliation therewith, by the Content Creator or by Ritholtz Wealth Management or any of its employees. Investments in securities involve the risk of loss. For additional advertisement disclaimers see here:

Please see disclosures here.