In the next few articles, I’ll be writing about different tools of wealth creation for a salaried individual (which I am not), a student (which I am) or a writer (also which I am, incidentally).
Buying a house/apartment can be a great wealth creating instrument for salaried people. The following 5 ways describe how:
1) In most societies, buying a house/apartment is seen as the safest way of generating wealth. Real estate is not prone to disturbances as other instruments like the stock market or the forex, etc, are.
2) In many parts of the world, the banking system has made it very easy for people to own homes by making home loans easier to get access to. This was not possible even 50 years ago. Also with the advent of monthly installment schemes of payment, many people can own a home and live in it as early as they have earned the college degree and stat earning.
3) The value of a home is appreciative. There! It says all. In many cases, the value of a house increases manifold compared to the same amount of money kept in a saving’s bank account during the same period.
4)Owning a home gives a person stability early in one’s life while the work. They can spend their extra savings in many different ways.
5)After retirement, if there is no monthly fixed income, then the house can be mortgaged to the bank. The bank pays a certain amount of money every month to the owner/owners during their lifetime. This is calculated on the basis of the value of the house. The owners do not have to sacrifice their standard of living and can live quite comfortably during their lifetime afterwards the property reverts to the bank. This is quite prevalent and is known as ‘reverse mortgage’.