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Thanks to Darshan and Professor Bruce for first bringing this story to us.

When it comes to wealth and happiness, the Swiss might have discovered a secret that eludes many Americans: homeownership is not the be-all and end-all.

The Swiss have figured out that renting is better than owning. Meanwhile, North America still believes a 30-year mortgage is the ultimate life goal.

I mean, who wouldn't want to be in debt for eternity? Here are a few Swiss facts that might surprise you:

• 1 in 7 adults is a millionaire in Switzerland (5x higher than the U.S.)

• 14.9% of Swiss adults are millionaires (8.8% in the U.S.)

• Switzerland has the world's largest percentage of millionaires

• They have 1 billionaire for every 80,000 people

Further, with a homeownership rate of just 31%, Switzerland boasts one of the lowest rates in the world. Yet, the Swiss consistently rank high on global happiness indices.

Across the pond, the American Dream is dying, and consumers are increasingly waking up—by choice or necessity—to the benefits of renting. According to a new Redfin report, America's renter population is growing 3x faster than its homeowner population. The surge in mortgage payments, up 90% since the pandemic, has pushed more people towards renting, increasing rents by 23%.

In Switzerland, renting is not merely a temporary solution but a preferred lifestyle choice. Several factors, including financial flexibility and lower risk, drive this preference. Renting allows Swiss residents to avoid the substantial costs associated with homeownership, such as property taxes, maintenance, and market volatility.

This financial freedom enables them to allocate their resources toward investments, travel, and personal development.

According to the Swiss Federal Statistical Office, the average household spends a smaller portion of its income on housing than in many other developed countries. This lower expenditure allows Swiss residents to save more and invest in diverse assets, fostering financial security and growth.

Happiness Without Homeownership

Switzerland’s high ranking on the World Happiness Report can be attributed to the financial and personal freedom that renting provides. Swiss renters enjoy the flexibility to move as their circumstances change, and they often do.

In Switzerland, moving every few years is a national sport. It’s like their version of musical chairs, but with yodeling and more furniture assembly. In 2020, the average relocation distance was just 12.5 kilometers, reflecting the adaptable nature of Swiss living.

Swiss investors don’t just diversify their bank accounts; they think globally about their assets and even their residency. Many hold second passports or residencies in other countries, which opens up more financial opportunities and tax optimizations. This global perspective on wealth-building is a key component of the Swiss approach to financial security.

So, what can we learn from the Swiss model? First, the idea that homeownership is essential for financial success is worth re-examining. Renting can offer significant financial advantages, including lower costs and greater life flexibility. The Swiss emphasis on global diversification and long-term planning also provides valuable insights for anyone looking to build and maintain wealth.

The Swiss experience demonstrates that homeownership isn’t the only path to financial stability and happiness. By embracing renting, diversifying investments, and thinking globally, we can learn to achieve financial security and personal well-being without the heavy burden of a mortgage. It might be time to rethink the American Dream and take a page from the Swiss playbook on wealth and happiness.

HEADLINES

Building Blocks: The construction industry faces a significant rise in project abandonments due to a combination of factors, including higher insurance rates, persistent high interest rates, increased materials costs, and labor shortages. According to the latest Project Stress Index analysis, construction abandonments were up 11% nationally for public and private projects compared to last year, with private projects alone seeing a 49% increase. Experts predict that construction spending may be challenging for the next 12 to 18 months, with a potential recovery thereafter. (Bisnow)

Flippin’ A! A recent survey by New Western reveals that 91% of real estate investors anticipate growth in 2024, with 80% planning to flip 1-5 homes next year. The optimism is fueled by an influx of 68,000 new investors in 2023 despite current market challenges. New Western's president emphasizes the crucial role of local investors in addressing affordability issues, as they focus primarily on rehabilitating single-family properties. This positive outlook persists in the face of broader market trends dominated by large institutional investors, highlighting the potential for local, independent investors to significantly impact their communities. (CRE Daily)

Political Piggy Bank: Real estate industry leaders have become significant financial contributors in the 2024 presidential election, with many backing Donald Trump despite supporting other Republican candidates in the primaries. As of mid-July, the industry had contributed over $7 million to Kamala Harris' campaign (formerly Joe Biden's) and nearly $11 million to Trump's campaign. Notable donors include Steve Witkoff, who has given over $437,000 to Trump-connected entities, and Jeff Gural, who initially supported Biden but has since reconsidered. The industry's political contributions reflect concerns about tax law, housing initiatives, immigration policy, and the ongoing conflict in Gaza, with some citing the rise of antisemitism as a reason for their support of certain candidates. (TRD)