Warren Buffett is up 4,000% on this investment – and you’ll never guess what it is

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Investing your money is a great way to turn it into a bigger sum over time. And there are different approaches you can take to investing.

You may decide to invest a large portion of your money in stocks in the hope that your stocks will rise in value over time. You can also decide to incorporate bonds into your strategy for more stability.

And then there’s real estate to consider. Of course, buying houses to rent out often means having to shell out a lot of money up front, and that’s something that can be out of reach. Plus, it means spending time managing tenants and taking on the risks that come with being a landlord.

But the simple step of buying a house to live in yourself could make you much richer down the line. Take it from Warren Buffett, a billionaire investor whose home is one of the smartest purchases he’s ever made.

A clearly profitable investment

Buffett is known to be an ace stock picker. And as a general rule, Buffett is not a fan of buying real estate as an investment.

However, in 1958, Buffett bought a house to live in for $31,500, which is about $250,000 in today’s dollars. Now Zillow estimates that Buffett’s home is worth more than $1.3 million. And that means Buffett is sitting on a nice payout.

It is for this reason that people are often advised to own a home rather than rent it. To be clear, home ownership is not for everyone. But if that’s your goal, and you’re able to pay your mortgage and housing costs, home ownership could work for you, provided you’re willing to stay in the same house for a good number of years. of years.

You see, homes as a whole tend to go up in value, but it can take time for that to happen. Anyone who’s been following the housing market lately might look at the gains we’ve seen over the past two years and think, “Wow, buying a house is an easy way to make some money.”

But in most cases, homes appreciate in value at a much slower rate. However, if you buy a house and stay there for, say, 10 years, you may find that it has gone up in value by the time you are ready to sell. And if you’re willing to do what Buffett did and stay in the same house for several decades, you could really end up with a good profit in your hands.

Should you consider your home as an investment?

It is indeed debatable. Although houses have the potential to gain value, they are also an expense. And remember that the gains you enjoy by keeping a home may be offset by the thousands of dollars you are forced to invest in your home over the years due to expenses such as maintenance, repairs and property taxes.

As such, you might want to think of your home as a hybrid expense/investment. But you might also want to follow in Buffett’s footsteps and buy a home that you can easily afford right off the bat and stay there for as long as possible.

Over the years, Buffett has been asked why he kept the same house when moving was clearly an option. And he’s holding firm that he’s happy there and as such doesn’t feel the need to move.

Now, your situation may change over time, so you have move, for example to accommodate a growing family or a job. But if you’re like Buffett and stay in the same house for many years, your house could end up gaining a lot of value. And that’s something you could benefit from immensely.

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We are firm believers in the Golden Rule, which is why editorial opinions are our own and have not been previously reviewed, approved or endorsed by the advertisers included. The Ascent does not cover all offers on the market. The editorial content of The Ascent is separate from the editorial content of The Motley Fool and is created by a different team of analysts. Maurie Backman has no position in the stocks mentioned. The Motley Fool has positions in and recommends Zillow Group (A shares) and Zillow Group (C shares). The Motley Fool has a disclosure policy.

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