Sophia White said:But honestly, that’s exactly the point! When we talk about what is investment in an economic sense, we're talking about something that builds actual value or—if you're feeling a bit more aggressive—something that generates income. Now, having a super comfy lifestyle doesn't generate income, just like having a steady paycheck doesn't automatically buy you freedom from a boss.
You've really gotta draw a line between the economic definition and the casual way people use the word "investment"—otherwise, you end up making weak excuses for buying a house. Look, I bought my condo because I wanted to "invest" in my own peace of mind and independence. But strictly speaking? My place isn't an investment. It’s tied up in a mortgage, I spent a ton of extra cash customizing the interior, and I’m not looking to flip it for a quick profit whenever the market spikes—I actually want to live there for the long haul. From a cold, hard investment standpoint, it’s a total flop—I’d probably be better off putting that money elsewhere. That said, if you look at it as a form of forced savings, I can pretty much count on getting back roughly what I put in, give or take whatever the current market vibes are.
I suspect the root of this misunderstanding lies in how we define "income."
It seems like you view cash as the only possible metric for return. I haven't approached it quite that way—because, honestly, comfort carries its own kind of value, which, if I'm deciding whether to buy a condo, is certainly significant to me. There's also the security of knowing I won't be kicked out onto the street, among other things, but let's not get too sidetracked here.
So, everything that distinguishes owning versus renting represents a value to me that can, in theory, be measured in dollars and cents. And I am essentially capturing that value by purchasing the property.
In that light, I viewed it as an investment—looking at the total gain, rather than just the liquid cash.