We welcome back Katelyn before she heads off to New Zealand for the 2023 Women's World Cup. We also welcome our 28th country , Taiwan!

In this episode we discuss whether your house is a good investment. JL Collins and various other personal finance experts say a home is not a great investment. When compared to the stock market, in general, your house will not return as much over the long term as the stock market will they claim.

EXAMPLE-OUR HOUSE VS. THE STOCK MARKET

Bought our house in 1990 for $209,000 dollars. We put down 45,000 and held a mortgage of $164,000. We paid it off in 22 years.

If I had invested $209,000 in the total stock market index fund for 33 years because it is now 2023, and I got a 9.3% return (which is the average), I would have $3,931,982.92.

According to Zillow I could sell our house right now for $902,500. That is a lot less than 3,931,982.92. We had various mortgage rates throughout the years because of refinancing and recasting (We refinanced 3 times) but if I approximate a 5.75% average mortgage rate for 22 years, that means I paid approximately 606,063.64 for our house. I came up with that figure by adding $45,000 down and $164,000 remaining balance compounded at 5.75% for 22 years. So I added

$45,000 down and $561,063.64 (the compounding) and it came to $606,063.64.

That means over time I made approximately a $300,000 profit over 33 years. I could have made $3,931,982.99 investing the $209,000 for 33 years versus a $300,000 profit owning a home over 33 years. Was JL Collins right?

The difference is $3,600,000.00 more by being in the stock market.

THE PROBLEM WITH THIS ARGUMENT

1)I never think of a house as an investment. It is a place to create memories, raise a family, meet new neighbors and friends, and have a sense of stability in our crazy world. Especially as a freelancer.

2)I didn't have $209,000 to just put in the stock market 33 years ago. Who does?

3) I have housing for the rest of my life that doesn't cost me anything with the exception of property taxes, utilities and minor maintenance.

4)I would have been paying rising rent for 33 years, that is money I would never see back. And when you are a senior citizen living on a fixed income who wants the stress of rising rent?

5)At least I have made a $300,000 profit so far which will go up if we live here another 35 years. And that profit will probably be $100,000-$150,000 more with write offs if we sell sooner.

6)We have a house the to leave Katelyn which could mean giving her more than a million dollars which is a cool legacy.

Enjoy!