Home might be where your heart is, but it isn’t necessarily where your wealth grows.With American homeownership in a steady decline, according to the U.S. Census Bureau, many households are not living in the passive asset that is a house. Homeownership is a long-term play, and for most families, true wealth only materializes when the mortgage is nearly paid off. Renters have an array of alternative strategies for building wealth, but doing so requires an extra dose of self-discipline to save money in the absence of a mortgage that converts an essential cost of living to an asset.
“The costs of ownership are so high in so many areas that it does make sense to rent – if you can invest the difference,” says Rachel Podnos, a financial planner with Wealth Care LLC, based in Merritt Island, Florida.