tag:blogger.com,1999:blog-6818486532233792196.post8717485910817756592..comments2024-03-18T14:35:45.389-04:00Comments on The Dividend Girl: I cannot wait to get rid of BMO Bank of Montreal (BMO) inside my TFSA portfolioSunnyhttp://www.blogger.com/profile/10439081666297874311noreply@blogger.comBlogger1125tag:blogger.com,1999:blog-6818486532233792196.post-24322491921162811392019-08-22T00:01:22.833-04:002019-08-22T00:01:22.833-04:00People at retirement sell they house, cashing in t...People at retirement sell they house, cashing in the huge tax free growth of that investment, and move into something smaller, they don't keep paying until they're 70s. You don't need to fully pay you house before you sell it, it's leveraged investing. Investing you can live in. It's good debt.<br /><br />Buying a house is not just about value going up because the market is going up, it's hedge against money deflation, i.e. the value of money and the purchase power shrinking over time. If you deposited 100k$ in the bank in 2009, it would have lost 20% of its actual purchasing power in 10 years. In other words, it would be worth about 80,000$ today. So we invest, in stocks or housing, firstly just to preserve our purchasing power, just to stay even with inflation.<br /><br /><br />Putting money in a house preserves the purchasing power over time, even after all the interest, expenses, etc. And then on top of that you have also growth in value because of demand and housing market. The growth of Montreal housing is around 8% annualized. Many of us made 20% in a just a few years.<br /><br />Putting equity in a house is a fundamental and necessary diversification and there is no one that is rich that doesn't have equity in a house. <br /><br />For people who don't have a lot money, mortgage can be an auto-saving plan, it's forcing them to save and it's going into something solid that will grow steadily and pay off at retirement. <br /><br />Yes, it costs a lot in interest, but it's a huge leverage investing opportunity accessible to everyone and resilient to market crashes and financial crises. Anonymousnoreply@blogger.com