A house is a home, not a way to fund a comfortable retirement
The best strategy for wealth accumulation is a diversified portfolio
Buying your own home is important. It provides a place to live and a form of security. But you cannot rely on appreciation in house prices to fund a comfortable retirement. Data on household wealth accumulation over the past eight years shows that the best strategy for growing wealth is to hold a diversified portfolio with a weighting towards financial assets like shares or bonds, rather than property. Household wealth is influenced by three factors. The first, is that a surge in debt can quickly undermine the net worth of any household, especially if the debt is being used to fund consumer spending rather than buying an asset such as a vehicle or residential property. The second component is growth in the value of financial assets such as unit trusts, direct holding of shares, pension funds, retirement annuities or a bank deposit. Their appreciation is largely determined by the level of interest rates or the performance of the stock market. Stock markets can be volatile over short ...
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