The Leverage Myth: Mortgage as Wealth Builder

A 20% down payment controlling 100% of an appreciating asset can generate leveraged returns, but the 2008 crash proved that leverage also amplifies losses — millions of homeowners went underwater, with peak-to-trough home prices dropping 27%. This risk is often underestimated by bulls, while bears highlight that a 10% decline wipes out 50% of equity. Compared to the rent-and-invest strategy (rank #4), which avoids leverage entirely, owning requires accepting a 27% historical worst-case drawdown in exchange for potential gains.