Leverage: Turn a Little into Alot
Lastly, the concept of forced savings is pretty simple. Paying off a mortgage as savings? Sounds counterintuitive, but as a homeowner pays off the mortgage, they are building equity at the same time. When the mortgage is paid off a homeowner has something to show for it. A home that is payment free from that point on, but more importantly value that can be taken out against the home, or profit on the sale of the home. A home can be much more than a place to live, it is in essence a giant piggy bank. Now keep in mind all the factors listed that contribute to home ownership can work in the other direction. A home can depreciate in value as well.