In
my previous article
I explained why buying a house is often a very silly financial
decision, especially for people who are young, or those that have a low
net worth.
In this article I’m going to explain why I think people are so
infatuated with the idea of buying and owning a house, even though,
if you look a the facts, it goes against many of the investment principles they believe in and hold dear.
But first, I need to address one of the myths about buying residential property, which was brought up in
the comments section of my previous article.
Myth #1: Buying a house is a way to beat inflation
The theory is:
It is worth borrowing a huge amount of money to purchase a house
because, not only will your property appreciate in value over time, your
loan amount will also decrease in value
in record time, partly because you are paying off a bit of your loan every month and partly because
inflation eats away at the value of the amount you still owe!
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