Join Australia's most dynamic and respected property investment community

The Economist Who Just Won a Nobel Prize Thinks Owning a Home Is a Terrible Investment

Discussion in 'Property Experts' started by Redwing, 1st Jul, 2016.

  1. Redwing

    Redwing Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    838
    Location:
    WA
    The Economist Who Just Won a Nobel Prize Thinks Owning a Home Is a Terrible Investment

    It's a 2013 Article that just popped up on my feed, hindsight is always a great thing, so it's intertesting took backwards and well as forecast forward

    Well, human thinking is built around stories, and the story that has sustained the housing boom is that homes are like stocks. Buy one anywhere and it'll go up. It's the easiest way to get rich... It can't be true that homes rise 10 percent a year. If they did, in the long run no one would be able to afford a house.
     
    Perthguy likes this.
  2. Bayview

    Bayview Well-Known Member

    Joined:
    22nd Jun, 2015
    Posts:
    2,716
    Location:
    Mornington Peninsula
    What would he have folks invest in if not their home?

    Folks need to put money aside to fund their retirement; what is his advice on how to do that?

    I'm not bagging shares at all; but what if you were a person (as many are) who put their savings into a managed fund their whole working life, and the day you decide to retire, the biggest stock market crash in history occurred - a la 1929, or 1987, or 2000, GFC...

    I guess there is the Bank...negative Cap Growth over time...after tax on interest and inflation.
     
    Last edited: 2nd Jul, 2016
    Perthguy likes this.
  3. jprops

    jprops Well-Known Member

    Joined:
    24th Sep, 2015
    Posts:
    108
    Location:
    Sydney
    You have to de-risk as you approach retirement... say 10 years out.
     
  4. Perthguy

    Perthguy Well-Known Member

    Joined:
    23rd Jun, 2015
    Posts:
    4,700
    Location:
    Perth
    @Redwing ih he
    If he thinks that he is doing it wrong :p

    My investment partner has used his main residence three times to buy three different investment properties (well, 50% to be precise). Next year he will use it again to pay for his half of a build. If you work for your house, that's not good. But if you make your house work for you that is a completely different scenario.
     
    Colin Rice, LeonW and Bayview like this.
  5. LeonW

    LeonW Active Member

    Joined:
    12th Sep, 2016
    Posts:
    31
    Location:
    Sunshine Coast, QLD
    I concur
     
  6. Colin Rice

    Colin Rice Mortgage Broker Australia Wide Business Member

    Joined:
    9th Jul, 2015
    Posts:
    1,078
    Location:
    Perth
    Tis a great feeling to have 100% PPOR secured debt as tax deductible debt :)
     
    York, Perthguy and el caballo like this.
  7. Terry_w

    Terry_w Solicitor, Finance Broker, CTA Business Member

    Joined:
    18th Jun, 2015
    Posts:
    8,979
    Location:
    Sydney
    This is a good point Colin - you can have you home and still invest tax effectively.
     
    Colin Rice and Perthguy like this.
  8. oki doki

    oki doki Well-Known Member

    Joined:
    31st Aug, 2016
    Posts:
    55
    Location:
    Canberra
    The award winning economist is rite....houses don't go always go up 10%...but I am happy if it went up by 6-7 % .
    What else can a avg person with a job to create wealth. The system is set up for him to fail by default!!
     
    Colin Rice likes this.
  9. Azazel

    Azazel Well-Known Member

    Joined:
    18th Jun, 2015
    Posts:
    8,113
    Location:
    Brisbane
    I was going to say it's not Steven Keen again is it?
    But the only Nobel Prize he would have a shot at is being wrong.
     
    Leo2413, Perthguy and Redwing like this.
  10. Leo2413

    Leo2413 Well-Known Member Premium Member

    Joined:
    18th Jun, 2015
    Posts:
    5,754
    Location:
    Sydney
    The guy is an idiot.

    And a Yale economist? lol

    You couldn't make this sh%t up.
     
    Last edited: 14th Sep, 2016