You don’t have to own a home to build wealth.Here are other places Americans are putting their money

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There may be more wealth-growing options than you thought.

Key Point

• Owning a home is often a good way to increase your net worth.
• If homeownership isn’t for you, there are other ways to grow your personal wealth.
• Retirement accounts and stock ownership are two other ways to build wealth.

There are many financial benefits to owning a home, including the fact that owning a home often serves as a wealth-building tool. This is because home values ​​tend to increase over time. For example, if a house he bought for $300,000 may be worth $600,000, $900,000, or more in 20 years.

On the other hand, it’s no secret that the housing market is going to be very tough for homebuyers in the second half of 2020 and beyond. This year has been even tougher for homebuyers due to rising mortgage rates.

So it’s no surprise that Americans are starting to change their view of homeownership. In fact, in a recent survey by Personal Capital, 43% of respondents said owning a home was just one of many ways to build wealth. And 25% of those surveyed said they would put off buying a home indefinitely because home prices are so high, mortgage rates are high, and the threat of a recession.

But that doesn’t mean those people are giving up on building wealth. Here are some of the other places they choose to put their money instead.

1. Retirement allowance

42% of those surveyed said they have committed to donating funds to a retirement account such as a Roth IRA or 401(k). These plans are good for long-term wealth growth as they include tax relief measures.

The downside, of course, is that these accounts require savers to keep their money in place until age 59 and a half. But considering they’re supposed to be used at retirement rather than pre-retirement, it makes sense.

2. High-yield savings account

For 36% of respondents, a high-yield savings account is a wealth-enhancing tool. The reality is that it’s important not to put too much money into your savings account. Because even if these accounts pay a lot of interest, the chances of building wealth are limited. But now, with interest rates on savings accounts rising, an increase of 1 may not be a bad idea (especially given the possibility of a recession).

3. Individual stocks

Twenty-five percent of those surveyed say they invest in individual stocks. And it’s a smart bet for growing wealth over the years.

The reality is that the stock market can be volatile, and buying stocks in a brokerage account means taking risks that aren’t relevant in a high-yield savings account. However, the return a stock portfolio can generate can far exceed the amount of interest a savings account pays.

carve your own way

Whether you’re dissatisfied with today’s housing market, or uninterested in owning a home because of the work and/or the expense, or both, we’re here to help you grow your wealth and increase your net worth. Rest assured, there are many options. A time when you don’t have to buy a place to live. So even if that’s not the route you want to take, there’s no need to break a sweat. Also, don’t assume that you are destined to never achieve your long-term financial goals.