Real Estate – Forced Savings

Some people are just plain lousy at saving money.  A house is an automatic savings account.  You accumulate savings in two ways. 

First, every month, a portion of your payment goes toward the principal.  Admittedly, in the early years of the mortgage, this is not much.  Over time, however, it accelerates.

Second, your home appreciates.  Average appreciation on a home is approximately five percent, though it will vary from year to year and area to area, and in some years may even depreciate.  But over time, history has shown that owning a home is one of the very best financial investments you can make.