Com 156 Essay

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Building Wealth While Living the American Dream: Home Ownership Purchasing a home is a wiser financial decision than renting due to the long-term gain that is critical in building financial wealth. As we all sit down and begin to draw an outline stating where we want to be at retirement very few us include the word rent in that equation. The majority of American children are raised hearing that having a decent job and purchasing a home is the quintessential American Dream. In addition to this dream we are also told that we must save money through our working lives in order to have a solid foundation to provide for ourselves during our retirement years. As the population is living longer it is going to be imperative for us to save in every way we can. Gone are the days of big company pension plans for the average employee, management included, 401k’s are little help if not self-guided, and Social Security is not secure at all if you have no additional funds to go with it. A sure way to help yourself build wealth is to purchase property and pay it off during your working years in order to secure a healthy amount of equity. The government run website Ginnie Mae shows through comparison charts the advantages of buying over renting and how those advantages allow a person to build wealth. If a person rents an apartment for $800 with 5% annual increases and another purchases an $110,000 home with a $1000 monthly mortgage, after 6 years the homeowner is paying less per month than the renter. Also, with tax savings of home ownership, a homeowner’s payment is less than a renter’s in only three years. Due to the fact that a buyer locks in their monthly payments they are not subject to cost of living increases like a renter is every time they sign a new lease. In addition, a renter is never able to take advantage of tax savings on what they pay for housing, the

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