They'll say real estate that they can rent out for income or a business that generates $$$
Discussion
My parents bought a house in 1990. Today my mom said it cost $134,750.
I converted this to ounces of gold. It turns out gold did better than real estate.
It makes sense. Houses depreciate over time. This calculation didn't include interest, insurance or repairs. Real estate is not a store of value. It just loses value slower than the dollar or wages.
Real estate returns on equity have been high for the last 30+ years because the amount of equity fronted by the owner relative to the appreciation of the real estate has been very low.
The rest of the funding is bank debt and as long as rental payment can cover the bank note, property taxes, insurance, and modest maintenance then there is very little the equity needs to do other than just sit there and get the juiced returns.
This dynamic was especially prescient over the last 30 years because they just kept lowering interest payments and coming up with creative mortgage loans.
In that environment: buy a home, wait 3 years, refi, buy another home wait 3 years, refi, but 2 more homes … the boomers didn’t have to do much to get rich…
I agree, just repeating what they say
I have real estate that we rent out, it’s great.
Problem with real estate is you need a huge chunk of $$ to get anything, especially these days..
Another problem is up-keep, it’s a lot especially with renters.
So if you have millions yes, some could go into real-estate, but for savings or a bank account, for a fluid asset?