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.

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  1. Redwing

    Redwing Well-Known Member

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    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.
     
    Redwing, 1st Jul, 2016
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  2. Bayview

    Bayview Well-Known Member

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    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
    Bayview, 2nd Jul, 2016
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  3. jprops

    jprops Well-Known Member

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    You have to de-risk as you approach retirement... say 10 years out.
     
    jprops, 2nd Jul, 2016
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  4. Perthguy

    Perthguy Well-Known Member

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    @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.
     
    Perthguy, 2nd Jul, 2016
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  5. LeonW

    LeonW Active Member

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    I concur
     
    LeonW, 12th Sep, 2016
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  6. Colin Rice

    Colin Rice Mortgage Broker Business Member

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    Tis a great feeling to have 100% PPOR secured debt as tax deductible debt :)
     
    Colin Rice, 12th Sep, 2016
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  7. Terry_w

    Terry_w Lawyer, Tax Adviser and Mortgage broker in Sydney Business Member

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    This is a good point Colin - you can have you home and still invest tax effectively.
     
    Terry_w, 12th Sep, 2016
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  8. oki doki

    oki doki Well-Known Member

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    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!!
     
    oki doki, 12th Sep, 2016
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  9. Azazel

    Azazel Well-Known Member

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    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.
     
    Azazel, 12th Sep, 2016
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  10. Sackie

    Sackie Well-Known Member

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    The guy is an idiot.

    And a Yale economist? lol

    You couldn't make this **** up.
     
    Last edited: 14th Sep, 2016
    Sackie, 14th Sep, 2016
    #10
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