Homeownership is one of the most common financial goals. And for those of us without access to generational wealth, it’s also one of the most elusive. The value of individual houses has seemed to levitate over the past five years, often triggering bidding wars, delaying the start of families, and forcing long-tenured residents out of their neighborhoods.
This is a consequence of a policy decision to treat housing as a financial asset instead of a human right. That will be difficult to undo without significant collective action, so in the meantime many people are left wondering what they can do to increase their odds of access to a secure housing situation.
The traditional answer is quite simple: save money and buy one.
But because saving for a house often comes with an intention to buy sometime in the coming few years, it is widely and correctly seen as imprudent to invest a would-be down payment in the stock market since an untimely gyration could eliminate a full year’s worth of savings or more.
That leaves savers in a tough position. Interest rates are near record lows, which means that money parked in a savings account will be slowly and surely eroded by inflation. We work with clients from all walks of life at Invest Vegan, and some of them are feeling the stress that results from this situation acutely.
Our flagship strategy already holds several positions in real estate investment trusts. As of our last rebalance on January 3rd 2022, these investments comprised 16.3% of our overall portfolio. They have the benefit of actually being real estate, which means they can reasonably be expected to produce similar returns to the houses our clients hope to buy.
In my view, that makes them the natural asset to invest in for this objective. And I’m delighted to share that we will be introducing a new strategy in the first quarter of 2022 designed specifically for these clients and this objective. Thanks to our intentional and rigorous approach to portfolio design, we are able to do this using our existing research.
I guarantee that this won’t solve the housing crisis on its own. But I am hopeful that it will make the uncertainty of planning for the future a little less stressful for our clients. I am also proud to share this as an example of our ability to listen in client conversations and use the resources at our disposal to respond imaginatively.Â
If you’re interested in learning more about this (or anything else) please don’t hesitate to reach out. You can always click here to schedule a time to chat with us.
Sloane founded Invest Vegan in 2021 to make high quality ethical investment portfolios accessible to anyone, no matter how much money they have available to invest. Before establishing her own firm, she spent close to a decade as a staff member at CFA Institute, a global nonprofit dedicated to promoting ethics, market integrity, and the highest standards of professionalism in the investment industry.
Invest Vegan LLC is a Utah registered investment adviser that provides managed account services to individuals, institutions, and others interested in aligning their investment activities with vegan ethical principles.
How to Save for a House
Written By
Sloane Ortel
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Homeownership is one of the most common financial goals. And for those of us without access to generational wealth, it’s also one of the most elusive. The value of individual houses has seemed to levitate over the past five years, often triggering bidding wars, delaying the start of families, and forcing long-tenured residents out of their neighborhoods.
This is a consequence of a policy decision to treat housing as a financial asset instead of a human right. That will be difficult to undo without significant collective action, so in the meantime many people are left wondering what they can do to increase their odds of access to a secure housing situation.
The traditional answer is quite simple: save money and buy one.
But because saving for a house often comes with an intention to buy sometime in the coming few years, it is widely and correctly seen as imprudent to invest a would-be down payment in the stock market since an untimely gyration could eliminate a full year’s worth of savings or more.
That leaves savers in a tough position. Interest rates are near record lows, which means that money parked in a savings account will be slowly and surely eroded by inflation. We work with clients from all walks of life at Invest Vegan, and some of them are feeling the stress that results from this situation acutely.
Our flagship strategy already holds several positions in real estate investment trusts. As of our last rebalance on January 3rd 2022, these investments comprised 16.3% of our overall portfolio. They have the benefit of actually being real estate, which means they can reasonably be expected to produce similar returns to the houses our clients hope to buy.
In my view, that makes them the natural asset to invest in for this objective. And I’m delighted to share that we will be introducing a new strategy in the first quarter of 2022 designed specifically for these clients and this objective. Thanks to our intentional and rigorous approach to portfolio design, we are able to do this using our existing research.
I guarantee that this won’t solve the housing crisis on its own. But I am hopeful that it will make the uncertainty of planning for the future a little less stressful for our clients. I am also proud to share this as an example of our ability to listen in client conversations and use the resources at our disposal to respond imaginatively.Â
If you’re interested in learning more about this (or anything else) please don’t hesitate to reach out. You can always click here to schedule a time to chat with us.
Author
Sloane founded Invest Vegan in 2021 to make high quality ethical investment portfolios accessible to anyone, no matter how much money they have available to invest. Before establishing her own firm, she spent close to a decade as a staff member at CFA Institute, a global nonprofit dedicated to promoting ethics, market integrity, and the highest standards of professionalism in the investment industry.
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Invest Vegan LLC is a Utah registered investment adviser that provides managed account services to individuals, institutions, and others interested in aligning their investment activities with vegan ethical principles.
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