When I sadly look at my stock portfolio more than 10% correct, I find there is a reimbursement of peace in my home. No matter how much the stock market is, it’s great to know that I always have a shelter to take care of my family.
This is interesting, but only active investors, people responsible for family investments, or personal finance enthusiasts may feel more stressed during the stock market correction. If you practice buying dipping sauces like I always do, it will feel like a recurring spiritual warfare as the stock market keeps falling, making you feel like a fool.
But for my wife who doesn’t often follow the stock market, this latest correction has little effect on her mood. Meanwhile, my little one is very happy to be unaware of the rising risks of recession and the imminent massive layoffs. They just want to play and have fun.
For me, I have to work hard and not let the three weeks of uninterrupted stock market decline negatively affect my emotions with my family. It’s not easy because I find myself less patient than usual. This latest discomfort is a good reminder of why I prefer real estate over stocks to build wealth.
If you are responsible for the finances of your family and don’t like losing a lot of money quickly in the stock market, consider paying off your home. I have paid off several homes over the past 10 years, but I have never regretted any.
The value of a paid house is more than just money
When mortgage rates are low, some people like to make fun of those who are paid. Although about 40% of homeowners have no mortgage, these critics somehow think that those without people are stupid. “With a mortgage, you can make more money in stocks and other investments!” is their most common criticism.
While the potential returns of using mortgages can be greater, critics are unable to recognize the value paid homes offer: Reduce stress and greater inner self. The older I am, the less money I want to owe financial institutions. Instead, I wanted to simplify my life with fewer bills and fewer debts.
For me, the feeling of financial security is worth it More More than my investments may earn an additional 4-8% extra income each year. That is to assume things are going well. Sometimes investments are underperformed in cash, treasury bills and real estate. Sometimes, you may even lose a lot of money.
Those who criticize homeowners who have no mortgages
I also realize that those who laugh at those people with paid houses are: How many of them can pay off their houses by themselves? I suspect this is over 50%. After all, one of the main reasons people invest is to eventually buy and pay off the house.
So maybe those who criticize homeowners who don’t have mortgages also secretly want no mortgages but no means. And since they can’t repay their homes, the only thing they have to do is criticize those who have them. This is human nature – trying to lower one’s own status.
As the percentage of home equity rises, your financial uncertainty is falling. In fact, the more you feel, the more confidence you have to buy dipping sauce when uncertainty is high. The feeling of financial achievement is priceless when paying for the final mortgage.
Paid houses can also be appreciated
It’s about your home, it can make money or save you a lot of money.
During normal times, real estate tends to be appreciated 4-5% per year. Of course, this is lower than the S&P 500’s historical 10% return. However, a 4-5% appreciation for large investments can produce a much higher absolute return than your stock portfolio offers. And, if you assume mortgage debt, cash returns are higher.
During a downturn, real estate tends to maintain its value as investors seek the security of bonds and tangible assets that generate income. Instead of appreciating 4-5%, real estate only rose 0-2%, while stocks are easily down 5-20%. However, since you are not paying your rent, your effective gain is actually a higher market rental yield.
Finally, both real estate and stocks fell in a serious downturn. But while residential real estate could fall 20% in a few years in the worst-case scenario, stocks could collapse 50% in a few months. However, since homeowners do not check the daily stock symbols, the pressure to experience is much less.
When you own a paid home, the appreciation rate (whether it is up or down) will not have a big impact on you. Instead, your focus is on living your best life while pushing money to the background. After all, the ultimate game of investing in stocks is to make money to buy things, such as houses.
Paid homes give you confidence to live a better life
We all need food, clothing, shelter and transportation. If we can lock in housing costs, everything else will become more affordable. And if you take a step further by fully repaying the home, you will find yourself more confident and free.
Want to take a vacation? Go for it! Desire to leave your job to suit your passion, but pay less? no problem. Want to actively buy the S&P 500? You dare to bet.
Yes, investing in stocks can produce greater returns in the long run. This is why the vast majority of homeowners also invest in stocks. But during recessions and recessions, paid houses shine with the smartest places. If you have one, hug it. If you don’t, recognize its value.
I certainly don’t want our economy to collapse. Financially, I just want the stock to rebound and perform better than my real estate portfolio. But if that’s what our aluminum and steel industry needs, then that’s it. Those who have paid homes will be better than those who don’t.
Related: Psychology of Paying All Cash for a House
Questions and suggestions
Is any of you rewarded? If so, how do you feel about unsecured loans during stock market corrections and economic slowdowns? With your age and wealthier grades, have you found yourself less focused on always maximizing profits? Why do some people with mortgages criticize homeowners who don’t have?
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