Why the hedge fund king was dead wrong about investing
James Altucher is a famous hedge fund manager, best selling author and entrepreneur who claims that it’s financial suicide to own a home.
He basis the claim on his own personal experience of owning (and losing two homes) and his work in investing.
One of his claims is that the average home has increased 0.2% per year over the last century. I’m not sure where he got this number. Here is what I saw today. The average U.S. home price in 1986 was $98,500. The average price today is $276,800. This is nearly 6% per year for the past thirty years. And that includes the mortgage crisis which was biggest recession in the last 100 years.
All of these figures do not take into account that you also get the benefit of living in your investment. When you add those costs back in, the gain is impressive.
Try taking shelter in your 401k the next time the economy falters.
James also claims that renting is like making money because you can invest the difference in what you would spend. That rule is predicated on the fact that renting is cheaper than buying a home. Sometimes it is, but today owning is cheaper than renting a home.
And in order to rent, someone still has to own the home.
Now, I’m not saying that his info is incorrect because I do not know where it came from. But as an owner of a company that manages hedge funds, he’d probably prefer that you invest all of your money in the stock market.
The truth is “one size fits all” rarely works for everyone.
Your situation and problems are not the same as your neighbors. You need (and deserve) a solution that works best for you.
And that’s where I can help.
If you are considering investing, lets talk a few minutes about what you want to achieve.
And I’ll help you find the best solution to your unique situation.
The Deal of the Day in Nashville is a ranch in Forest Hills with a view and sold for less than $460,000.