A different way of thinking of wealth

Wednesday, October 22, 2014

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Today, we are a very money-oriented people. We commonly think of wealth in terms of accumulated money, and of investments returning a favorable rate of money gains. I noticed this afternoon a TV commercial touting reverse mortgages. One of the talking points was that the equity you own in your home is like a cache of money sitting there doing nothing. So, a reverse mortgage is a means of converting your equity into cash for paying bills, or buying stuff you want. The ad encouraged the thought that having the money in hand makes you feel more wealthy and secure than owning that equity in your home. The same advertiser at one time used to make the statement that you retain full ownership of your home. That always seemed misleading to me, since with a reverse mortgage you are selling your equity back to the mortgage company to get cash; so you really don't retain "full" ownership of your home.

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