The key to building equity in this way is to actually invest as much of the difference as you can afford. Returns on stock market investments are comparable and, at some points, have been even greater than returns on real estate. While we are comparing them right now, remember that the stock and real estate markets are two very different things. Real estate has inherent, tangible value, whereas investments don’t. The stock market is much more volatile, but real estate is less liquid, which means if you wanted to sell your home for cash, it would take much longer than liquidating your investments.
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