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Get Rich by Renting!

synthetiksynthetik
edited May 2007 in Housing Bubble
Why rent? To get richer
Shares have been remarkably consistent over the past two centuries in their 7% real returns. In Jeremy Siegel's book "Stocks for the Long Run," he finds that real returns averaged 7% over nearly seven decades ending in 1870, then 6.6% through 1925 and then 6.9% through 2004.

The average real return for houses over long periods might surprise you: It's virtually zero.

Comments

  • small_far_uglysmall_far_ugly
    That actually doesn't surprise me at all, but it's interesting to see it laid out like that. Just put logic to it: If housing consistently shot up greater than the inflation rate, like the bulls say it does, then we'd have reached unaffordability a loooong time ago. Inflation compounds just like any other interest based annuity, and it would've quickly reached a point where virtually everyone was PRICED OUT FOREVER.
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