My largest investment is my home. I’m not sure there’s any other way to think of my home as anything other than “a pile of wealth… to be slept on.”
Am I missing something about modern economics?
Am I missing something about modern economics?
yes you have.
The home took someone money to build, the land cost money to buy (from the previous owners) - thru the long chain of title ownership that would stem from the conquerors of this land (who ultimately took the land from either natives, or whoever that previously owned it by force).
The previous owners who now got paid by you will use this money for other investments. It is not slept on. Your house is also providing utility (of being a shelter).
You just stopped thinking about the money as soon as it left your bank when you buy the house, and thus you feel that the value of the house is merely being "slept on", when in actual fact, this transaction that is your house is a small cog in a very large system.
I look at my tiny townhouse that my Dad could built in 6 weekends with his buddies and zillow needing seven digits to display the price and very well thinking “what a fucking real estate bubble we live in currently.”
there is a clear point at which one might start thinking about real estate as investment (and it sure looks bubbly). if you bought a house as an investments some decades ago it is not much of an investment and basically a loss inflation-adjusted, no?