In the third chapter of The Richest Man in Babylon the book lists and details "seven cures for a lean purse." Today, we'll cover cure #5 which is:
Make of thy dwelling a profitable investment.
Yes, before David Bach and The Automatic Millionaire Homeowner there was The Richest Man in Babylon, giving advice on how a home can make you wealthy.
The book goes on a bit about how every man needs to enjoy his own property as does his wife and family. It talks a bit about putting down a good-sized downpayment and paying off the lender quickly. Then, it ends with this:
Thus come many blessings to the man who owneth his own house. And greatly will it reduce his cost of living, making available more of his earnings for pleasures and the gratification of his desires. This, then, is the fifth cure for a lean purse: Own thy own home.
I've talked a lot about the value of home ownership here at Free Money Finance. It's a fact that homeowners have higher net worths than renters on average and that there are good reasons why homeowners get rich and renters stay poor. However, you still need to follow a reasonable formula when buying a house to make sure your home is the financial asset you want it to be.
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