Is "Investment" a Dirty Word
December 17, 2008
The year 2008 has certainly been a challenging year for folks invested in the stock market. If, as some news articles have reported, folks have lost their life savings, "investment" does become a dirty word. the reality of any "investment" is that there can be a risk and some are riskier than others.Usually, the greater the risk, the greater the possible gain, but also the greater the possible loss - that is what risk is all about.
Investing in the stock market is clearly about risking monies to increase ones wealth. The caveat that many stock brokers often offer is that one should only use the monies that one is willing and able to lose, not monies that are needed for living. With the advent of 401Ks as retirement vehicles, the investment in stocks became very widespread and when stock markets fall, so do the funds for retirement.
So what does this have to do with the real estate market? If you are wanting a place to live and you have the income and qualifications to purchase a home, now is the time. It seems to me that the reason that folks get so concerned about whether prices might still go lower is that they are thinking of their homes as "investments" rather than where they want to enjoy their lifestyle.
True, there are "investors, who buy real estate as an income generator; i.e. rental property. This present market has seen many of these investor/buyers purchasing property to use as rentals. With interest rates low and property values depressed, and rents up, a single family home can be a positive cash flow "investment".
For those who want a desirable place to live, they could follow the example of investor.buyers and purchase when home prices and interest rates are as low as they have been in 5 years.
Five years from now, I believe that we will be able to look back and be grateful that we took advantage of the opportunity to own a home.
The year 2008 has certainly been a challenging year for folks invested in the stock market. If, as some news articles have reported, folks have lost their life savings, "investment" does become a dirty word. the reality of any "investment" is that there can be a risk and some are riskier than others.Usually, the greater the risk, the greater the possible gain, but also the greater the possible loss - that is what risk is all about.
Investing in the stock market is clearly about risking monies to increase ones wealth. The caveat that many stock brokers often offer is that one should only use the monies that one is willing and able to lose, not monies that are needed for living. With the advent of 401Ks as retirement vehicles, the investment in stocks became very widespread and when stock markets fall, so do the funds for retirement.
So what does this have to do with the real estate market? If you are wanting a place to live and you have the income and qualifications to purchase a home, now is the time. It seems to me that the reason that folks get so concerned about whether prices might still go lower is that they are thinking of their homes as "investments" rather than where they want to enjoy their lifestyle.
True, there are "investors, who buy real estate as an income generator; i.e. rental property. This present market has seen many of these investor/buyers purchasing property to use as rentals. With interest rates low and property values depressed, and rents up, a single family home can be a positive cash flow "investment".
For those who want a desirable place to live, they could follow the example of investor.buyers and purchase when home prices and interest rates are as low as they have been in 5 years.
Five years from now, I believe that we will be able to look back and be grateful that we took advantage of the opportunity to own a home.
posted by shirley harry at 8:54 AM
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