What is the right way to look at numbers?

[Peter Morgan]

Hello,

If I own a single family home for my own personal use with PITI = $3000 and if $1000 of PITI

goes into principal payment, is it safe to consider my effective monthly real estate expense is $2000 and the other $1000 as a forced saving?

Thanks

[Joe Villeneuve]

No.  It's a $3000 cost.  You're taking cash out of your bank (liquid), and putting it into the floors of a house (solid).  All you're doing is transferring that money from one location to another, except when it's in the bank you have a choice of where it goes next.  When you choose to put it into the floors of a house, you've made that choice.  It's not different than buying a car...or anything else for that matter.