At portfolio.com the other day, I ran across a Felix Salmon article that drew me in with its first sentence: "This is the worst website I've seen in a very long time."
Of course, I had to click in and see what the fuss was about. The most egregious issue with the site in question -- which offers "housing market facts" courtesy of the National Association of Realtors -- is its content. Salmon takes issue with much of it. Let me add my own two cents. Here are a few "facts" offered by the NAR website:
- "Over the past 30 years, home values have risen more than 6% annually." Ooh, that does sound good, doesn't it? But they forgot to mention that the S&P 500 grew by an annual average of about 9.4% during that same period. Over 30 years, stock investors end up with more than double what homeowners have. (This isn't to suggest you shouldn't buy a home -- it's a smart thing for most of us to do. Just don't think of it as a ticket to riches.)
- "The average homeowner's net worth is $171,000 -- that's nearly 46 times that of a renter's, who has an average net worth of $4,800." This almost suggests that if you buy a home, you'll suddenly boost your worth. Over time, you may, but this comparison is problematic. For one thing, many renters are young Americans, saving up to buy a home. At some point, they'll be in the other group.
My advice? For long-term wealth building, look to the stock market. Over the long haul -- 20 years or more -- stocks like Eli Lilly
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