[Alberta's Child]

When you are paying the mortgage, you are actually building equity for yourself. It starts slowly at first, as most of your first mortgage payments go towards interests (especially on 30-year loans) but year after year, your equity portion increases and you are essentially paying yourself for living in your own home.

You don't need to build equity in your home to do this. In fact, building equity in your home actually flies in the face of one of the most important principles of finance that has gotten a lot of attention in recent decades (after Harry Markowitz was awarded the Nobel Prize in Economics for his work in this area): diversification.

From a purely financial perspective, a home is one of the least diversified (and most illiquid, I might add) investments you can ever own. More than anything else, it truly is a case of "putting all your eggs in one basket."

[SamAdams76]

Well that’s assuming that purchasing your home is your only investment. Many people who own their homes also own stocks, mutual funds, 401(k)s and even other real estate from which they derive rental income from.