Animal Spirits Podcast Talk Your Book: Where to Save For Your Down Payment
Nov 22, 2021
Brett Sohns, co-founder of Lifegoal Investments, shares his expertise in tailored investment strategies for homebuyers. He discusses the innovative Life Goal Home Down Payment ETF, created to counter inflation and assist those saving for a home. The conversation touches on balancing risk with growth and the challenges of current market conditions, including rising prices and low interest rates. Sohns also emphasizes the importance of liquidity and strategic savings for achieving financial goals in real estate. Tune in for fresh insights!
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Pandemic Housing Boom
- Brett Sohns delayed his house-building plans during the 2020 pandemic, expecting prices to drop.
- Instead, prices rose significantly, especially in suburban areas like his, due to people relocating from cities.
Down Payment Crisis
- Taylor Sohns highlights a "home down payment crisis" due to the increasing gap between home prices and savings interest rates.
- Low savings rates make it difficult for potential homebuyers to keep up with rising home prices, worsened by the pandemic's impact.
Down Payment Investment Strategy
- Avoid leaving your down payment in low-yield savings accounts, as they don't keep pace with inflation.
- While investing in the S&P 500 offers better returns, it also carries significant downside risk, unsuitable for short-term down payment savings.