Warren Buffett: Buy Affordable Home, Not Your Dream Home

"Our country's social goal should not be to put families into the house of their dreams, but rather to put them into a house they can afford," says investor Warren Buffett, the third-richest man in the U.S., who still happens to reside in the 6,000-square-foot stucco house he bought in 1958 for $31,500.

"Home ownership makes sense for most Americans, particularly at today's lower prices and bargain interest rates,"; he wrote in a February 26 released letter he wrote to shareholders. But, "[a] house can be a nightmare if the buyer's eyes are bigger than his wallet and if a lender – often protected by a government guarantee – facilitates his fantasy."

In fact, the Berkshire Hathaway CEO's 5-bedroom Omaha, Neb., residence on the corner of Farnham and S 55th Street is the third-best investment he ever made, after wedding rings, he stated in the annual letter to shareholders from the company.

"For the $31,500 I paid for our house, my family and I gained 52 years of terrific memories with more to come," wrote Buffett, who purchased the home (pictured below) when he was 29 years-old. "...though I would have made far more money had I instead rented and used the purchase money to buy stocks."