The reason that real estate makes the most millionaires is simple: one of their biggest expenses turns from a liability into an investment. If you have to pay for rent, why not have it be an investment too? If you pay $3,000 in rent each month for rent, then you’re losing $36,000 a year. Yes you’re paying more for a mortgage, but its usually less than the equity gain of your home. So when you’re done paying off your mortgage after 30 years, you now have the full equity of your house as an asset. If you were renting the entire time you would have 0 equity or money to show for it. So by purchasing over renting, value wise, after 30 years not only did you live there the entire time essentially for free, but you actually got paid.
A $3,000 monthly payment on a 30 year mortgage at 4% means the house cost $628,384.
At the end of the 30 year mortgage you would have paid $1,080,000 ($628,384 Principle, $451,616 Interest)
Real Estate is typically between 4-8% meaning the appreciation on 628,384 principal would be between $2,038,099 and 6,323,213)
That payment of $1,080,000 over 30 years doesn’t seem as bad anymore. You already had to pay for rent anyway. So over 30 years you got all your money you paid in back and another 1-5 million on top of it.