HOME OWNER: Diversifying My Home Investment In the US, the typical household has the preponderance of its net worth in the equity of its home. Further, accessing this equity has been a large source of funding for retirement, education and healthcare costs, home improvements and overall consumerism. Over the last few years, however, with the decline in home values, much of this “piggy bank” has been eroded, which has affected family spending and retirement plans. In fact, the wealth of the US has declined by over $15 trillion in the last three years.
At PRIMARQ, we view a home as having both utility value and financial value. While you enjoy the occupancy of the home, one needs also to consider one’s home equity as a financial asset, i.e., an investment. As most financial advisors suggest, part of a long term investment strategy should include some level of diversification. With approximately 80% of a household’s net worth, it may make sense to diversify out of having such a concentration. But how?
PRIMARQ is an exchange where a home owner can sell part of their home equity to an investor, who is seeking to participate in the future appreciation of the home. By selling a portion of your home, you can generate cash proceeds to invest in other investment classes, such as stocks, fixed income investments, or treasury bills and bonds. Also, you can supplement your 401(k)s, KEOGH or other retirement accounts. So in managing your investment portfolio, you may consider an equity sharing arrangement as a prudent method of diversification.