This week we have some really great articles to preview. The first one is
Mortgages for Forced Savings
Check out the article here - Mortgages as Forced Savings
In this article, The Physician on Fire brings up some great points both for and against using mortgages as forced savings accounts
In a nutshell, most people don't save enough but a mortgage forces them to do that.
One part he got wrong was the claim that homes appreciate. As we know from people who study these things, homes do not appreciate over the long term, though they can move up (or down) for decades at a time.
The reality is that homes DO appreciate at around 2-3%, but inflation averages around 2-3% and there is an overall appreciation of almost exactly 0%.
Though this chart is not indicative of long term trends, it's a great illustration to my point.
Besides that one nitpicking detail, I do agree that homes are a great way to force the average person to save.
Not because it's a good way to save (because it's not) but because most people have no discipline and won't save.
Saving at 0% return is better than not saving at all!
$100,000 Dream Decimated
Read the Article at 1500 Days
This is a cautionary tale about how volatile your wealth can actually be. In the same month, his stock portfolio was up $60,000 and down $9,000! That's a crazy swing that I know would make me sick to my stomach.
It's good for us all to see, because you might meet your net worth goals but it's all on paper until you sell.
Just because you set your goal at say...$1 million in net worth and then achieve it, doesn't mean you will keep it.
Realtors Get New Tax Deductions
This is really big news for those of us in the real estate field, because a ton of investors are also real estate agents.
One of the great parts of the new tax law was the 20% deduction on qualified business income. It was a question if real estate agents would get it or not, but apparently after a lot of lobbying, the IRS has decided to interpret the law in a favorable way for agents.
I'm not an expert on this, so, for more details, check out the article.