exceed long term mortgage rates, especially in periods when rates are relatively low. That does not mean you should automatically invest instead of paying cash. Markets are volatile and past returns are not guaranteed. It simply means that every dollar sitting in your walls is a dollar that is not: • Growing in tax advantaged retirement accounts • Earning returns in a diversified investment portfolio • Funding a business or other opportunity In other words, cash in a house is safe, but it may not be working as hard for you as it can be.
3. You Concentrate Your Risk
If you put a large portion of your wealth into a single property, in a single town, in a single state, you are concentrated in one asset. If something affects that specific market, neighborhood, or property type, a big chunk of your net worth is exposed.
A balanced financial life often includes a mix of:
• Home equity • Retirement accounts • Taxable investment accounts • Cash reserves • Maybe business interests or other assets
Putting too much into just one house can tilt that balance. You don't want all your 'eggs in one basket.'
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