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Updated almost 17 years ago,

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Doug Greenville
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Buying a house vs. investing in mutual funds

Doug Greenville
Posted

Hello everyone. I currently have a significant amount of money invested in mutual funds with a major investment firm. Considering the current state of the U.S. economy and the prospects, or lack thereof, of a recovery anytime in the not too distant future I'm wondering whether or not it would be wise for me to take my money out of my mutual fund account and use it as a down payment on a house.

If it hasn't already been made painfully obvious I have absolutely no experience with real estate investment at all. It just makes sense to me that if I were to take say $30k, use it to buy a house, live in the house until I am ready to move on,(I am ready, willing, and eager to leave my current housing arrangement),then sell the house, it would be better than leaving my money in a mutual fund account that will continually lose money just about every month for god knows how long.

I know there are certain "if" factors such as if I were to get suckered into a house that needed thousands of dollars worth of repairs or something like that. But for arguments sake let's say that the house I would purchase would be at a fair price and would be move-in ready with no hidden or surprise expenses, do you think it would be a good idea? The way I see it is like this; yeah the housing market fluctuates but it just seems like a much more secure investment in these economically uncertain times.

The house will always be there and as long as I could find a buyer I would get out every penny that I put in unlike mutual funds where 5 years down the road I could very easily have lost thousands of dollars with nothing to show for it.

This sounds like a good idea to me but I know that there are probably factors I'm not considering due to my lack of knowledge and experience in this field. All opinions are welcome and I thank you in advance.

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