Do You NEED Real Estate To Build Wealth?
Questioning societal norms
Do you need real estate to build wealth?
It's a respectably debatable question.
The first question everyone should ask is, "What does wealth look like to me?"
For some, wealth equates to freedom, having six or seven figures in the bank, or having enough to cover bills, expenses, and some.
What does wealth look like for you?
Define this to help you create your financial roadmap.
Homebuyers
For some people who buy a home, it takes them 30 or more years to pay it off, and they never acquire more than one property.
By the time they do pay the house off, what do they have?
A paid-off house and money in retirement if they invested prudently. But for many, this is all they have, and the wealth they build is relatively similar to their fellow renters.
What is the point of being house-poor if you never have money?
Renters
What does the renter have?
It depends on what the renter does with their money.
If you're a renter and decide never to buy property, there are other definitive ways to build wealth, which could come via:
Spending less than you earn.
Investing in non-real estate ventures.
Investing in digital real estate (REITs).
Society Claims Real Estate Is The Way
Real estate is the way to build wealth, but there are arguably just as many other ways.
The Renter
Could one accurately say that a renter in sales who earns six to seven figures, lives below their means, and consistently invests can't build wealth?
The Homeowner
A homeowner who earns an average income could end up amassing multiple properties and still earn the same amount or less as the renting salesperson.
"But they have property potentially worth millions."
Maybe so, but you must sell physical assets to tap into the cash unless you charge enough rent to bring in a high cash flow.
Who's better off?
There are alternative ways to build wealth. The opportunity to build and create wealth is available to all, and it doesn't have to come through real estate.
However, exploring real estate and adding it as an asset class (whether by physical or digital means) will only diversify your financial portfolio.
Much of society is caught up with the idea of owning property, and many never question the ramifications that come with it or if they possess a genuine desire to manage the responsibility.
Some believe that tangible assets are the only real assets, but we live in a digital world. You don't need tangible assets to build wealth; this is only one way. Using real estate as passive income is only one avenue; not the only avenue.
If you desire to avoid the responsibilities, maintenance, fees, costs, and taxes that come with home ownership but still want to create wealth, research and learn other options you can explore to create wealth how you want.
This article is for informational purposes only. It should not be considered Financial or Legal Advice. Not all information will be accurate. Consult a financial professional before making any significant financial decisions.
Thanks. This was helpful information.