The 22% appreciation rate that this country experienced from 2002-2005 was not typical, not even close. And just hoping your home will appreciate enough to fund your retirment is pure speculation and not wise. If you know your economic history you know that housing tanked in the 80's and average Joe could not sell his home if his life depended on it. With interest rates at 18% and seller financing being the only way to sell your home, I sure hope nobody tried retiring on their homes equity...since they lost a huge chunk of it. The housing market depends on the interest rate as well, and as you know the main reason for the market which made your home appreciate was fueled by record low interest rates...something we will not be seeing again for some time as inflation creeps up. So counting on a paid off home for retirement is risky...b/c if you retire during a down turn in the market...you will not have as muc as you had hoped. The higher the interest rates the lower the home prices.

Thats great that your home went up that much, in the DC area I made $150K in 2 years off an investment townhome in the same time period...but I did not receive any of that money until I sold it. I did have monthly cash flow of $500 off the rental income though. And if I tried selling it now...I would not have made as much. And it would take 6-9 months to sell it! So if you needed your equity now to pay the bills, then you would have to borrow from your house...costing you money in interest. Again another example of your home not making you money, but costing you money. All the big markets are now seeing depreciation...so your home is not worth what is was 2 years ago. The reason why your home is not an asset is because it does not provide you any monthly cash flow. All you do it put money into it. Repairs, improvements, maintanence.

I currently invest in 60 unit plus apartment complexes. With a good property management company...and a solid knowledge base...it is very stress free and I do enjoy the very comfortable monthly cash flow it provides. And I get amazing tax write offs and the line item depreciation which keeps my taxes to a minimum.

Remember a dollar is worth more today than tomorrow...so you want cash flow NOW to reinvest which will give you more money LATER! Compounding is important and your home equity does not compound!!!! That is why real estate is a great investment for someone who takes the time to educate themselves to own rental property than wait around for their house to appreciate in order to retire.

It is not the only investment strategy out there, and it can be risky if you don't know what you are doing....but no more risky than putting your money into your company's stock and losing your entire retirement fund and pension because the CEO was inflating profits and the company went under. (Worldcom, Enron). Or investing in the legacy airlines (American, United, Delta) very stable stocks for decades, then they all went backrupt. So everyone needs to decide how to invest and educate themselves. There are winners and losers in every type of invesment out there! :)