I’ve always advised my clients to start their wealth journey by purchasing their first home. There’s a number of reasons for this apart from having your own place to call home. To start with you won’t pay capital gain tax on gains in the value of your property. This means your own home is one of the most effective – if not the most effective, ways to accumulate wealth.
Once you purchase your new home you will be able to build equity in the following ways:
- Your initial equity into the purchase which would include deposits, grants and savings
- Loan repayments.
- Improvements you make to your home
- Capital gains which will accelerate due to the magic of compounding.
Once you have built equity you can either upgrade to a better home or start to use the equity in your home to fund the purchase of an investment
If you can afford to get involved in property at a young age, I would really encourage it. Over the long term, it is a very safe and stable asset class that will become your most valuable financial investment for the future.