Jaspreet Singh: This ‘One Thing’ Stops Most People From Creating Generational Wealth
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Andrew Lisa
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Renee Ross
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Conventional wisdom says your home is your biggest investment and your most valuable asset. Jaspreet Singh disagrees on both counts.
The personal finance influencer, licensed real estate agent and founder of the Minority Mindset YouTube channel cautions his audience that a home is neither an investment nor an asset, but a liability that you live in.
Wait, Isn’t a Home the Ticket to Generational Wealth?
Singh told his Minority Mindset audience that a home can contribute to general wealth once you pay it off and hand it down to your heirs free and clear. But he warned that the decades-long process of equity-building can be the highest barrier to wealth creation.
“Your home is a liability until it’s an asset,” he said in a recent episode. “For so many people, a home is a money pit until you sell it or until something happens where you can finally get some of the value back from owning the home.”
Along the way, real estate transaction costs, property taxes, bank interest, renovations and other unavoidable expenses gobble up money you could have put toward actual wealth-building investments.
If You Buy a House, Buy Strategically
Homeownership has been the cornerstone of the American Dream for generations. But you’re part of a new generation — and it’s time to adapt.
“The American dream is not dead,” Singh told his audience, “but it is changing.”
That means your strategy for buying a property must change with it.
He’s Not Against Buying a Home — He’s Against Buying Too Much Home
Singh doesn’t believe that no one should buy a house, but when people view it as an investment instead of a liability, they let their financial guard down.
He said, “When they can sell you on the idea that a home is an investment, now you’re going to be willing to go a little bit bigger — buy a bigger home, get a bigger mortgage — because now it’s something you’re investing in for your financial future, investing in for your kids. You can justify it.”
But bigger houses come with higher property taxes, higher monthly payments, costlier utility bills and more expensive upkeep and renovations. All of that steals money you might have put into wealth-generating assets.
If you do choose to buy a house, Singh wants you to buy one that you know you can afford — and buy it with the mindset that it’s a liability that has the potential to one day become an asset.
Buy the Right Kind of House in the Right Place
To jump-start a house’s transition from liability to asset, Singh tells his audience to consider buying a distressed property below market value instead of the move-in-ready dream home.
“Look for a fixer-upper that needs work so you can come in and add value,” he said.
The second key is to put as much thought into the value of the location as you do into the value of the home itself.
“Maybe you have to look in a different neighborhood, a different city or even a different state,” Singh told his Minority Mindset audience. “In California, people don’t understand that you can buy a home for under $150,000,” he said, citing Michigan and the Midwest, in general, as examples.
Don’t Rely on Your Home for Wealth Generation
Even if you buy a home you can afford below market value in a low-cost city, it will still be a liability until it becomes an asset. While you’re waiting for that to happen, Singh wants you to invest in true assets with wealth-generating potential.
Buy a Property To Make Money, Not Memories
Despite his contrarian stance on homeownership, Singh is a vocal proponent of real estate ownership — but he favors income-generating investment properties that you rent to other people.
“You get cash flow,” he told his Minority Mindset audience. “If property values continue to rise, you get appreciation, and you have an asset that you can potentially pass down to your heirs.”
Invest in Dividend Stocks
Buying a rental property isn’t for everyone, but that doesn’t mean you can’t have an ownership stake in something that pays you back.
“If you’re worried about how you’re going to have money to fund your lifestyle, live your life and still have money to pass down, if you start investing in ETFs or stocks that pay out dividends, these dividends can create cash flow.”Singh likes dividend stocks for the same reason he likes rental properties.
Unlike a primary residence, which you can’t convert to cash without selling or borrowing against your equity, rental properties provide income without your having to sell the property. Similarly, dividend stocks pay you periodically without requiring you to sell shares.
Invest in Startups
Singh is happy to live in an era where investing in emerging startups is no longer the exclusive realm of well-heeled, well-connected big shots.
“I love it,” Singh told his audience. “I’ve always wanted to be able to invest like ‘Shark Tank,’ and now there are a whole bunch of companies on the internet that let you do that,” he said, citing Wefunder, StartEngine and Republic as examples.
Singh cautioned that while startup investing is risky, you can get started with only $100, and it offers huge growth potential.
Start Your Own Business
If you have more capital, greater risk tolerance and an entrepreneurial spirit, Singh believes starting your own business has the most growth potential of all.
“If you have the entrepreneur mindset and you start investing in your own business, now you have something that you can use to survive, because your business should profit,” Singh told his audience. “You can sell the business and go out and buy some stocks. Or you can sell the business and give the cash to your kids. Or you can take the ownership of the business and give it to your kids. So now you have a different way to create generational wealth.”
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