I see it stated a lot in social justice circles that the path to building ‘generational wealth’ is via home ownership, but having lived with homeowners, that doesn’t seem to make sense. From the outside it looks like something you throw money into for decades, and then die and the bank takes over. How does just having a mortgage start to accumulate wealth???
In: Economics
A person’s “net worth” isn’t just measured by how many dollars they have in the bank, it’s measured by the value of the things they own (minus their debts). So if you own a house and it’s worth a million dollars (often the case even in regular-degular neighbourhoods here in Canada), that adds a million dollars to your net worth, and you can use that to do things like get good loans or establish a good credit rating: it increases your access to money in that way.
Also, just as another example: in the United States, public schools are often funded by property taxes in the area. So if you live in a neighbourhood where the houses & properties are worth a lot, your schools are better funded and that benefits you and your neighbours in all the ways that it does (including but not limited to job prospects). But if you live in an area with low property values, and/or places where most of the residents rent and just a few landlords own all the buildings, chances are your schools will suck and that will suck for you and your neighbours economically.
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