Posted November 14, 2018 12:03:13A recent study suggests the rich may not always have to spend more money to have a better home.
According to research from the Center for Retirement Research at Indiana University, the rich have been more likely to move out of their homes if they have already made a good financial decision.
The study suggests that people who are in their 20s, 30s and 40s are more likely than those in their early 30s to move.
The research is based on data from the US Census Bureau’s American Community Survey.
“When you’re a relatively wealthy individual, the first thing you want to do is to make sure you’re living in a home that’s going to have value,” study author John E. Hahn, the James B. Lohr Distinguished Professor of Real Estate and Economics at IU, said in a statement.
“The second thing you’re going to want to make is to invest in that home and make sure that you’re putting your money where your mouth is.”
To figure out what factors contribute to the higher wealth of the rich, the researchers analyzed a dataset of US homeowners.
Using this data, they identified which factors are most correlated with the average wealth of an individual.
“There is no single measure of wealth,” Hahn said.
“We found that these three factors were strongly related to a person’s wealth.”
Hahn said the study showed that wealthier individuals have more of a “straw man” factor in determining how well their home is going to hold up in the future.
“If you don’t have any assets, your ability to make a mortgage is going a long way,” Hannon said.
“That is a good way to make the decision to buy a house.
But if you have no assets, the value of the house will be more limited.
It’s a lot like a hedge fund manager who is invested in an index fund that is doing well and who has to sell at some point.”
In other words, when the value and quality of a home declines, a wealthy individual will need to spend less money to keep it in good shape.
Hahn believes that the rich can make better use of their wealth than their poorer counterparts.
“You could say that the poor do a better job of protecting their money, because they have a lot more time,” he said.