6. Can You Eat Your House or Will It Ever Pay Dividends?

You recall from our previous discussion (in the Introduction, “Human Capital: Your Greatest Asset”) that for most people during most of our lives, human capital is the most valuable asset on our personal balance sheets. But have you ever thought about what asset is next in line—what your second -most-valuable asset is? It probably won’t surprise you to learn that for homeowners, this spot is occupied by their personal residence. According to the Survey of Consumer Finances (SCF), their personal residence represented fully 85 percent of homeowners’ financial net worth in 2007. For the general population under the age of 35 (not limited to homeowners), homes represented fully 220 percent ...

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