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Imaginary Equity

Submitted by Bob Klosterman on March 15, 2008 - 05:48.

Great thoughts Philip! When market value exceeds economic value of a property it is often combined with a speculative and/or emotional enthusiasm that will not persist over time. It only seems that way when your living through it. Housing is a particularly good example. When comparing the cost of actually renting a property versus owning it one needs to use it generally 4 to 6 months a year to break even. I have a white paper on the topic at http://www.whiteoakswealth.com/pages/whitepapers.asp .

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