Rayvt analyzes,
Well then, don’t keep a lot of money in a poorly appreciating asset. (i.e., residential real estate.)
Instead of paying cash, have a 30 year fixed rate mortgage and keep the money earning inflation + 8% in the stock market.
My house may or may not be poorly appreciating asset (spolier: it probably is), but I don’t care. Because the bulk of its value is in the stock market, at the minor cost of paying a below-inflation interest of 2.5%.
That’s not how arithmetic works.
You just added mortgage interest to the the price of your “poorly appreciating asset”, making it even worse.
Since I’ve been using a “rent vs. buy” calculation to inform my real estate decisions, I didn’t purchase a home until I found one at a low enough price to give me a prospect of an S&P 500 return on the asset. I wasn’t investing money in real estate at a lower return than the S&P 500.
But I’ll admit that a lot of people share your thinking – and your banker loves you for it.
intercst