People like to hold on to what they know.
Your home may be your most valuable asset, but that doesn’t mean it’s your best investment, said The Washington City Times commentator and co-editor of the new book “How I Invest My Money.”
And the equity in your home can be misleading.
“It’s really a form of consumption. You own the house instead of paying rent for a house you don’t own, but you have to live somewhere,” said Brown.
You should think of your home as an emotional investment. You spend money on it because it makes you happy, says Brown.
Once you start calculating home ownership, you’ll find that decades of inflation, repairs, and renovations leave you with an asset that underperformed the market, Brown said.
Investing in more properties can make that return even worse.
That doesn’t mean real estate can’t be part of your portfolio. To take advantage of real estate, Brown invests in Real Estate Investment Trusts or REITs.
REITs allow an investor to own stock in a publicly traded company that owns income-generating properties.
Watch this video to learn more about the REITs Josh Brown invests in and to learn more about the asset advisor’s philosophy on real estate.
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Disclosure: NBCUniversal and Comcast Ventures are investors in Acorns