Your home may be your most valuable asset. But it’s unlikely to deliver bigger gains in the long run then a diversified portfolio of stocks or bonds. And that was true even before real estate values started sinking. Over the past 20 years – a period including the headiest days of the housing bubble- home prices have averaged gains of just 3.6% a year. Stocks, despite their recent pummeling, were up 8.4% over the same period. But of course, you live in your home not under your stock and bond certificates.

The Long-Term Advantages. Owning a home, however, offers other important financial benefits. There are the tax breaks: deductions for mortgage interest and property taxes (plus, the first $500,000 that couples make after selling is tax-free). Home ownership is also a stellar savings tool – every mortgage payment forces you to sock away more money adding to your home’s equity, the key reason most homeowners have a higher net worth than renters. And real estate historically has been a good hedge against inflation.

So what investment could be better than one you can live in, use to define your reality or lifestyle and use as a savings and collateral tool? If you want to make the place where you live an investment please let us help you with your questions.

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• Earn Big Bucks as a Landlord (abcnews.go.com)
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• Betting your retirement on real estate (money.cnn.com)
• Economic View: Flaw in Free Markets: Humans (nytimes.com)

Filed under: Commentary, Economy, Finance, Money-Saving, Mortgage, Real Estate Market, Tax Issues, VRN