Episode 076: Home Equity Fails Safety Test

Episode 076:

Home Equity Fails Safety Test

In this episode, I’ll cover the second proof that paying off your mortgage is a dangerous and unwise financial decision based on outdated data. Home equity is not safe from depreciation, foreclosure, or natural disaster even if you carry insurance. All tests of a wise and conservative investment.

Included in this episode:

In the previous episode, we talked about how it is safer to keep mortgages than pay them off

Home equity = any dollar you put into your home is not liquid enough in bad times to pass the wise investment test.

Four Tests of a Wise Investment

“How does it perform as an investment?”

Test 2: Safety = can you lose your money?

• What this test seeks to know is whether or not you can lose any of all of the investment you can make in a home equity
• Is home equity safe from losses?
  • Market values of home can drop and will depreciate in value
  • Depreciation… you never know when it’s coming
• If you leave money inside of a home, in the form of home equity or value, you can lose it
• Home equity is NOT safe for depreciation
• Solution? Depreciation Insurance!
• It’s not safe to go into foreclosure
• Home equity is not safe from losses (natural disasters)
• Putting equity inside of a piece of real estate is not conservative!

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“Charlie Jewett is an Author, Speaker, Podcast Host, Consumer Advocate, and Investment Advisor from San Diego, Ca.  Charlie has spent the last eleven years trying to change the way the industry professionals and consumers think about Retirement.  Charlie provides education materials that help people to create their own financial plans and offers services to protect consumers from the bad guys in the Financial Services Industry.”  

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