Buying a home doesn't make you rich

5 May 2023

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A homeowner's 40× higher net worth than renters isn't because the house itself made them rich. It's because owning a home gives you stability to take bigger risks: changing careers, starting a business, buying more properties. Those decisions compound over decades.

So there's a study, and it says that a homeowner's net worth is 40 times greater than that of a renter. But this is completely misleading, and here's why. Yes, owning a home is a good financial investment. It's going to go up in value, and you're going to pay down the debt over time. But this is not the real reason why a homeowner's net worth is so much greater than a renter. There are so many other things about owning a home that lead to a higher net worth. Mainly, it's the stability that homeownership brings. And that stability allows you to think bigger. Things like, hey, how could I increase my income? How could I get that promotion? How could I start this business? Maybe now that I own this property, how could I buy future investment properties? Right. Those things all start with buying that first property.