The key take-away: focus on owning income-producing assets, not a primary residence.
One truism of investing is to follow the lead of those who are building wealth.This chart reveals the foundation of the wealth of the top 1% and the next 9%; business equity, i.e. ownership of enterprises. Compare the assets boxed in red:
The wealthiest households’ primary wealth is businesses and shares in businesses. The bottom 90% depend on the family residence as a store of wealth, and on debt as a means of funding asset purchases and consumption.
Primary residences were once a reliable store of wealth–a store that was accessible to working families who were willing to pinch pennies and save up a down payment.
But now that housing has been financialized and globalized, it is prone to boom and bust cycles like every other risk-on financialized asset. Unfortunately, recent history shows that many middle-class households bought homes at the top and rode the post-bubble burst down.
The Great Wave: Price ... Best Price: $2.65 Buy New $14.88 (as of 10:45 EDT - Details)
The Upside of Down: Ca... Best Price: $2.34 Buy New $20.40 (as of 05:35 EST - Details)
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Against the State: An ... Best Price: $5.02 Buy New $5.52 (as of 11:35 EST - Details)