Are you a person who goes up to a child and asks, what do you want to be when you grow up?
Typically, you are not thinking about a response that will consider the compensation for their preferred profession or the benefits. However, as you get older, you begin to look at your occupation as a primary way to build wealth. It does not matter what you do for a living; there is one immediate decision we can all make to help us build wealth and begin doing it immediately! This decision is buying a home.
If you are a renter, you pay a landlord to live in their property. These funds are typically applied to their mortgage, and over time, you are helping that homeowner build wealth. Rather than helping someone else build wealth, invest it into your future. When you purchase a home, you are building equity right from the start. According to the 2019 Survey of Consumer Finances, the homeowner has a median of 40 times the household wealth than a renter. Therefore buying a home is one of the most vital tools for wealth building.
When you purchase your home, you are putting funds toward ownership. And if you elect to do a 30-year mortgage, for example, you can lock in a specific interest rate. While paying off your home, you are typically gaining added market value. Market value in the current market is increasing significantly because of the lack of inventory and the updates made to homes in high demand. These components are what develop equity. As you acquire equity, it provides you with more borrowing capabilities. It can help catapult you into a new wealth realm because you are essentially putting funds into a “savings account” when you pay your house payment. Compared to renting, you would be putting your payments toward an expense, not equity, and your renting cost would likely increase with inflation.
Lastly, when you own a home, you can strengthen your credit score. By keeping up with your monthly payments, you can demonstrate to lenders that you are a reliable borrower, making it easier to receive financial support from institutions in the future. We encourage you all to not only build your wealth with your day-to-day profession but through being intentional with your investments. We highly recommend leaping to own your own home and are ready to assist you when you are ready.