Post
Topic
Board Economics
Re: House is a forced saving
by
Poker Player
on 06/11/2022, 04:56:33 UTC
The reason people say that owning a home is forced saving is because most people don't save at all.  Paying down the principle on a loan while maintaining the value of the asset like real estate does, builds equity, which for a lot of people is their only form of wealth. 

I think this hits the nail on the head. Unless people foresee a lot of mobility for work or other reasons, I recommend everyone to buy a house, to the extent of their possibilities, without going into excessive debt.

A paid off house or a good equity in it, just with an emergency fund of between 3 and 6 months of expenses and regular investment in the stock market in mutual funds and/or pension plans give a financial peace of mind that is worth experiencing.