Pundits That Say Homeownership Doesn’t Work Are Wrong, Says Author

Some financial writers—not strawmen, but honest-to-goodness people—have made arguments recently that buying a home is unwise. They say that buyers sacrifice certain freedoms and tie up all their money in one place.

David Bach, a bestselling author who is releasing an updated version of his book, "The Automatic Millionaire," says that these naysayers are incorrect. Bach spoke with Business Insider and said that renting leads to financial insecurity. Buying is more secure and beneficial, because once an owner pays off the mortgage, he or she can grow wealth.

Bach gives the example of a couple who bought an average-sized home, worth around $250,000, to raise their kids in. They worked to pay down their mortgage early and owned it outright in 18 years. Instead of moving up into a bigger home once the mortgage was paid off, they moved into another similarly sized house and paid that off while renting out their original place. By 55, the couple was earning a steady rental income and living debt-free in a home they owned.

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