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RE: Earn 13% per year with these Low Risk, Tax Free, Inflation protected Investments
It costs to maintain a home and a home is a liability not an asset. In addition property taxes in some places are extremely high and most of the homes designed today do not reduce the cost of living. Sure if you can build a self sustaining autonomous home it might make sense, if the home is very reliable so it doesn't need constant maintenance. Problem is most home designs are not that. The closest thing I found to that is the ecocapsule.
I definitely do not want to own my own home until the homes are designed to be self sufficient, reliable, off grid, autonomous, and smart. We are far away from that with the current designs.
I factored in maintenance and taxes worth 40% of rent. You cannot say that's a problem when it's accounted for.
Yes but the loss of liquidity, the opportunity cost? Even if on a dollar basis you get theoretical 13% a year, you also lose mobility and you can't sell your house quickly. Why not just go with REIT? Or even index funds? I guess for me it would not be worth the loss of mobility and also I think the housing prices are still in a bubble so I don't have the faith that I could sell a $300,000 house for more in the future than I paid.
Dividend growth investing for me seems a better fit because I wouldn't have to sacrifice liquidity or mobility to get the same or perhaps better returns. Taxes would still be a bit of a problem though but maybe some politician can lower taxes.
There is opportunity cost with not owning a home.
Liquidity is a matter of price. At the right price you can get liquid in a hurry. There is certainly value in being liquid. On the other hand, most people invest in stocks and bonds through their 401k or IRA which is not really liquid either.
In times of financial crisis your stocks, bonds, and other traditional investments can become illiquid or result in a complete default.
Do you really think those other investments are likely to provide a reliable return during any economic situation? When inflation is high, governments are defaulting, and the world is in chaos nothing is safe.
I think with certain stocks and investment choices if you spread your risk appropriately then you will see growth even during times of recession. Certain stocks performed well even during the 2008 recession when the housing market wasn't doing so well. In addition I don't see anything fundamentally improved about our economy since the collapse of 2008 and expect to see another collapse much worse this time brought on by automation. I expect politicians and low income voters to blame their lost jobs on immigration (illegal immigration) instead of automation and I expect all sorts of instability when the bread and butter job of truck driver is dramatically effected by the self driving vehicle.
Overall stocks perform very well over the decades and if you own the right dividend stocks you can receive income from dividends even during an economic crisis. The dividend payments may not always grow at the same rate because for some years dividend stocks are in fashion and go out of fashion in other years but there are certain companies that aren't going to go away and certain products that people are always likely to buy. Personally I would feel very safe in a carefully inspected diversified portfolio of dividend stocks but I might not feel safe in a $300,000 house in an uncertain economy. It's very much like how some people bought gold to prepare for the last crisis instead of a house and people in 2004 might have wondered why anyone would want to be buying gold but by 2008 it made sense.
I would consider a mobile home but I don't think I will buy a home because I don't think I'll need one. I can always move to where the cost of living is cheaper or expect that rent will go down. If I were going to buy a home eventually then I wouldn't be paying $300,000 but more in the range of the price of a luxury car and I would not buy a home to flip it because I honestly don't believe the housing market can avoid a collapse when I look at how much personal debt Americans have (including college graduates), and I project massive job losses so I don't know where the continued money will come from for people to pay the inflated rent unless there is some kind of basic income.