for an asset to count as an "investment" it must be able to provide cash flow. Any asset that does not provide cash flow is a cost.
Retire@40.. are you 40? are you retired? (sorry if I admit to not taking the time to investigate)..
As has been explored already in many posts here: implicit "cash flow" comes from NOT having to pay rent. Rent MAY be inferior at times, but what renting brings one may also be inferior.
Personal housing (to me) is an asset class unto itself.. one that precludes me -largely- from having to WORRY about other asset classes. My accounts can go to near zero and as long as I can somehow come up with prop.taxes this baby is MINE. Try that with most any other kind of investment.
My old house in the US was
definitely an investment, though I did not intend it as such. I just knew that buying into that neighborhood would not do me wrong. Nor did it. I would not be sorry to've kept holding that property to this day nor into the future, notwithstanding the general downturn; its proximity to the city center is and was key. I sorely regret not hanging onto it, but didn't want the hassles of overseas prop. mgmt. So be it.
NOW, what I have traded for.. is "a castle" (sez my mom).. and not nearly as liquid an "investment" (Italians mainly and Europeans generally do not change houses easily as do Americans). I may have made a mistake, but it will be seen what rich Italians or foreigners may want to pay tomorrow for a no-need-of-restructuring stone villa with 3/4 acre of land <15 minutes from the A1 (major) h'way, halfway btw. Rome and Florence. Who knows?
I only know it could be worse.
Anyway.. if I hold shares of CITI.. what? Even If I were to have 100,000 shares.. will they let me camp out/sleep rough in one of their many atria in NYC, London, Dublin?? in the kiosk of one of their ATMs in Dubuque or Dakka?
No.
Here, however, I freely camp out in MY atrium. You are all welcome to come pitch a tent and see the Milky Way free of charge, weather permitting.
Another small aspect for you to re-assess, retire@40:
if you buy a stock to hold forever and never sell it until you die, then it is a cost.
Unless it pays a dividend.
To me,
Stock dividend = money to live on.
House paid for outright = freedom from vagaries of market rent and random (land)lords.
This is a bad thing?
Answers:
1.) Own
2.) Yes
3.) Yes, to an extent
4.) Yes, to an extent
The "extent" is the difference between our current home size/value and the lower limit of a future 'livable' home size/value for us.
Retire@ 40: I really tried, but could not comprehend, your distinction between "a 'cost' asset" and "an 'investment' asset".
To me, a cost is a cost; an asset is an asset. A house has cost aspects and investment aspects .. but so do most all other assets. A mere house is less impegnative than a Van Gogh. Wanna buy a 'Banksy' for £200,000? Wanna try and INSURE it?
I must be the strongest woman in the universe by now.
W2R: ayuh!