Since a house is inevitably both a place to live and an investment, it would seem to be appropriate to treat it as both
Mental accounting can really bite you here. It is easy to treat everything house related as an ‘investment’ without ever bothering to actually do the math.
I think what that argues against is having a single mental pigeonhole labelled “investment” and treating everything in that pigeonhole alike. But surely the right way to think about this is that many things you buy can later be sold for some non-negligible fraction of what you pay for them; goods for which that fraction is likely to be bigger than 1 and for which that’s the only reason you buy them are pure investments, goods for which the fraction is tiny are pure non-investments, but lots of things are in between.
Failing to do the math in any situation involving large amounts of money is asking for trouble.
Mental accounting can really bite you here. It is easy to treat everything house related as an ‘investment’ without ever bothering to actually do the math.
I think what that argues against is having a single mental pigeonhole labelled “investment” and treating everything in that pigeonhole alike. But surely the right way to think about this is that many things you buy can later be sold for some non-negligible fraction of what you pay for them; goods for which that fraction is likely to be bigger than 1 and for which that’s the only reason you buy them are pure investments, goods for which the fraction is tiny are pure non-investments, but lots of things are in between.
Failing to do the math in any situation involving large amounts of money is asking for trouble.