Return on Investment
The global economy has taken a turn in a downward direction in recent years. The strategies that made sound investment practices just a short time ago are no longer valid ways to save money. The home was once a great individual savings account. When surplus funding was available, it was prudent to sock it away toward the mortgage. The interests rates held on the mortgage were usually high, so any pre-payment of principle went a long way toward mitigating future interest charges. The value of the home could be counted on to climb in a steadily upward direction. The return on investment was decent since the home value was expected to rise. Housing prices are static currently so there is no sense in seeking a return on investments into your home.
The reality in the current economic climate is that savvy investors need to have diverse holdings that fall in a wide range of monetary sectors. When too much money is placed in one area it can be subject to losses during a downturn. Some investors hedge their bets with high interest savings accounts to provide a conservative cornerstone to their portfolio. By spreading the investment into various sectors, an investor is subject to less risk.
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