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Originally Posted by stephen wilson
Also, the odds of an investor picking a stock with that kind or return, except in hindsite, is about nil.
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Agreed. On matching Berkshire.... But I used Berkshire because it just happens to be his company! Even if Buffett invested in a simple index fund he's still up massively since that home purchase was made. And that's even with a bear market that lasted well over a decade until the high flying 80's and 90's.
And I don't know anyone who advocates stock-picking for 99% of the country...
From John Bogle to the Hedge Fund manager of the month, they all beg the average income investor to buy the total stock market through an index. Why? Because the data is more than ample that over any extended period the total stock market beats owning real estate or any other asset class. 99.6% of multi-millionaire mutual fund managers can't beat you the S&P 500 investor sitting at home in his lounge chair and slippers. Yet the average U.S. worker passes up more of this oppourtunity than they should for the privilege of being a home owner/owing the bank. The major benefit of investing in different asset classes comes from doing so over a long period. You can't expect a good result if you wait until your in your 50's because most of your money was tied up keeping up with home-related expenses.
You should not base your decision to buy RE just on how much you saved vs. renting, you should also factor in what owning is costing your investment portfolio over the course of 30 years. That's my point.