Warren Buffett: Buy Affordable Home, Not Your Dream Home

warren buffett
warren buffett

"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."