Why Real Estate Feels Like the Best Investment

For many Americans, owning real estate isn’t just about having a place to live—it’s a deeply rooted symbol of financial success. It offers something tangible, visible, and emotionally reassuring. In fact, surveys consistently show that consumers overwhelmingly believe real estate is the best long-term investment. But while real estate can be a powerful wealth-building tool, most consumers miss out on its full potential by not integrating it with smart financial planning. That’s where a Certified Liability Advisor™ (CLA™) comes in.

Why Consumers Trust Real Estate as Their Best Investment

1. Appreciation Over Time
   Homes tend to increase in value over the long run. This appreciation is the only way a house increases your net worth (besides the invisible savings of money you would have spent on rent over that same time period) —but if you access that equity strategically, it can also be a form of accelerated wealth creation.

2. Tangible and Usable
   Unlike stocks or bonds, a house you own provides both financial and functional value. It shelters your family and gives you control over your environment, making it feel "safer."

3. Forced Savings
   Paying down a mortgage is a disciplined form of savings. As principal is reduced and property value increases, your equity rises, especially in an inflationary environment where liabilities shrink in real terms. The confusing part is that doesn’t increase your net worth, it is balance sheet neutral.

4. Inflation Hedge
   Inflation increases the cost of living, but it also erodes the real value of fixed mortgage payments. As a result, long-term homeowners often pay yesterday’s prices with tomorrow’s dollars, improving real cash flow.

The Financial Blind Spot: Asset-Focused Advice

Most consumers have a financial advisor who manages their assets. But they rarely have anyone managing their liabilities, even though liabilities like mortgages often outweigh liquid investments. This imbalance leads to misaligned decisions that can cost homeowners tens (or hundreds) of thousands of dollars over time.

Enter the Certified Liability Advisor™: The Missing Link

A Certified Liability Advisor™ (CLA™) works in concert with financial advisors to help clients align their liabilities with their financial goals. Their approach focuses on three core areas:

1. Cash Flow Management
   A CLA helps homeowners manage their housing payments in the most cost-effective way—often identifying smarter mortgage products or payment strategies that improve monthly cash flow.

2. Tax and Equity Efficiency
   By understanding the tax implications of mortgage interest and home equity, CLAs optimize not just the loan structure, but how it impacts overall net worth and retirement plans by also including a CPA in the wealth team.

3. Three-Sided Balance Sheet™ Thinking
   Traditional planning only looks at assets, not liabilities and real estate. CLAs introduce the three-sided-balance-sheet conversation and the ultimate understanding—cash flow—is what drives most decision now and in the future.

A Collaborative Wealth Team

The future of wealth creation isn't built in silos. A CLA joins your financial team—alongside your CFP®, CPA, insurance agent, and real estate advisor—to ensure that borrowing decisions don’t undo investment progress.

This is particularly powerful in today's economic climate, where rising rates, tax shifts, and housing affordability challenges require a more dynamic and proactive planning process.

Conclusion: Manage Liabilities (and your real estate) Like You Would Your Assets

Owning real estate is a great start. But owning it wisely—by integrating liability strategy with your financial plan—turns a passive asset into a powerful wealth engine. A Certified Liability Advisor™ helps you borrow smart, repay smart, and collaborate with your financial team to unlock the full wealth-building power of your home.

a BORROW SMART CONCEPT
Why Manage Liabilities?

They asked why you rob banks. Because that is where the money is, he famously replied. For most consumers, the bottom 90%, the house is where the money is and where the money flows! It is the biggest asset and biggest liability, so it has the most opportunities to impact the client in a positive way.

The chart shows that homes make up 27% of total consumer assets, more than pensions, deposits, or any single investment category. But there's a flip side: mortgages account for 66% of total consumer liabilities.

This means your home isn’t just where you live—it’s where most of your cash flow risk lives, too. Managing that liability wisely through effective borrowing and repayment strategies can significantly impact your long-term wealth.

Your house doesn’t just sit passively on your balance sheet. It drives your net worth through appreciation and reduces it through poor cash flow decisions. A CLA™ helps you evaluate whether to prepay, invest, refi, or reposition equity—unlocking smarter decisions across all three sides of your financial life.

LIABILITIES
What’s Happening?

REAL ESTATE
What’s Happening?

ASSETS
What’s Happening?

ON BEING HUMAN
What’s Worth Sharing?

DOPAMEMES
And Other Happy Moments…

AI
and The Future of Work…

Borrow Smart University || National Institute of Financial Education