Your Home as an Investment

Nest Egg
Why Your Home Isn't the Investment You Think It Is
Too many people rely on their home as their primary savings strategy.
That's a mistake.
By David Crook
Wall Street Journal
March 12, 2007;
Page R1

Planning your retirement? Don't bet the house on it.

Your home means a lot of things to you, most of them good. Your home gives comfort and protection to you and your family, and it could well embody all your material hopes and dreams.

But houses have become much more than just places to live. Your home is probably your biggest asset, and the price you could ask for it today is almost certainly much higher than what you paid for it back whenever.

As a result, houses have become substitute credit cards, as profligate owners borrow their equity to finance everything from cars to vacations. Among thriftier owners, the equity they have built up in the family home has become a vital part of retirement planning -- a "fourth leg" of the now-unstable "company pension/personal savings/Social Security" stool that was long the model for a financially secure old age.

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