“If something's worth doing it's worth doing for money.”
In 1987 Michael Douglas uttered this infamous one liner as Gordon Gekko in Wall Street. As an extremely successful and ruthless broker, Gekko had a valid point.
“You got ninety percent of the American public out there with little or no net worth. I create nothing. I own.”
More than 20 years later, little if nothing has changed. Blame today’s excess inventory, lack of financing options and the daily media speculation that has sidelined potential buyers from positively impacting their own net worth.
Like it or not, real estate still remains the number one long term investment to aid in future retirement. Purchasing real property allows the average consumer to accumulate real personal value.
The Federal Tax Reserve Board estimates that homeowners have a net worth almost 36 times more than that of renters. In 2006, the median net worth for homeowners was $171,700 compared to only $4,800 for those cutting monthly rent checks.
The numbers are hard to ignore. So, where do you add up?
Every three years, the Federal Reserve undertakes a massive survey of nearly 5,000 U.S. families. In the most recent Federal Reserve's Report on U.S. Family Finances, 2006 data showed the median American family net worth was $93,100.
"After growing rapidly during the boom of the 1990s, the net worth of the typical American family rose. A booming housing market boosted the typical American family's wealth between 2001 and 2004, but stagnant stock prices and rising debt offset many of those gains."
The next Federal Reserve Report will take place in 2009, and more than likely the median American family net worth will take a short-term hit as a result of the current housing correction. However, most homeowners are changing their investment perspective, refinancing out of ARM products and signing the dotted line for long-term 30 year fixed mortgages.
Not signed up? Time to Get Real! Invest in your future and add to your own net worth today.
If nothing else, do it for the money.