Is the American dream really dead? Is buying a home actually a bad idea?
According to Gary Vaynerchuk (or Gary Vee), a motivational speaker and advertising entrepreneur, Yes.
“I do not think the American dream should be buying a home anymore,” Vaynerchuk said on a recent podcast.
Vaynerchuk argues that you’re better off renting a nicer home than you can actually afford, and putting your cash into your business instead (if you’re an entrepreneur or entrepreneurially-minded).
Here are 4 reasons why Gary Vee is simply wrong. Buying a home is still the American Dream–and one of the wisest decisions you can make for your quality of life, future, and financial assets.
Reason #1: Home ownership = A sense of accomplishment and pride.
Sure, renting potentially means you can live in a bigger, fancier home without having to put down a huge down payment. You can impress your friends, neighbors, and visitors. And, as Gary Vee says, No one has to know the difference.
That may be true, but you still know the difference.
Home ownership comes with an inherent sense of accomplishment and pride. There’s just nothing like knowing that the house you live in is your own property, the result of your own hard work, and a wise, long-term financial investment.
You can rent a McMansion to feed your ego and give the impression of wealth. Or, you can put a large down payment on a home you can be proud of…and work on building your wealth instead.
#2: Buying property still has a proven, solid track record of success.
Investing in home ownership has an incredible track record of successfully producing wealth. Some of the richest individuals in America have made their money in real estate. People will always need a place to live. A home is a concrete asset, and its value isn’t necessarily vulnerable to the volatility of the stock market. Buying a house is a good idea, period.
Businesses, on the other hand, typically fail.
If your business doesn’t succeed, but most of your money is in your business, then you’re going to see your net worth rapidly depreciate.
Instead of pouring all your cash into a startup that could potentially crash and burn, build your business slowly and invest your cash in a sound, proven method of wealth creation: buying real estate.
#3: Not every business needs money to grow.
Even though we live in a Shark Tank-era of watching bold, intrepid entrepreneurs stand before a panel of uber-wealthy real estate moguls to ask them for a few million bucks, we don’t actually need that much cash to see our businesses grow.
Most businesses, in fact, might be better developed by bootstrapping, or earning money from your business to help your business grow. You’ll see slower, organic growth–and ultimately, you’ll probably build a stronger, more resilient business because of it.
#4: “Slow and steady” is just a better, wiser way to live.
Renting a home so that you can “show off” (or simply live in a bigger place) might be tempting…but it’s not wise.
With most things in life, “slow and steady” is a better, more productive approach. Building wealth organically. Putting cash in sound investments. Thinking long-term success instead of short-term profit or gratification.
Even the Bible says that fast profits usually fail.
It’s short-sighted advice to rent property so that you can have “bigger and better” right now and use your extra cash to fuel your business. Better to focus on building organic growth for your business…and living the American dream by buying a home for less than you can afford, doing a 15-year mortgage, and enjoying long-term wealth creation and home ownership.
If you’re interested in buying a home and growing your wealth with real estate, Gluch Group can help you out. We believe that buying property works to grow your wealth over time–after all, it’s what we do with our own money.
Give us a call at 480-378-6700.