Buz Livingston/Wall Street Journal

VOICES: Buz Livingston, On Long-Term Real Estate Investing - Financial Adviser - WSJ#

"If there is one thing we?ve learned over the past few years it?s that buying real estate in order to flip it is a bad idea. There are some churches up in Tennessee where they pray and pick up rattlesnakes ? if you?re into risk-taking, you?d be better off doing that.

We?ve also learned that having a large portion of your assets invested in your home is a big financial risk that can easily become a financial burden, especially in retirement. A few of my clients are in retirement, living off a 401(k) or an IRA and still paying off multiple mortgages. That?s not a good position to be in.

As a general rule, you should pay off your mortgage before you retire. If you?re in the middle class and you?ve got an expensive home along with a nice beach house, however, you?re going to be locked into your mortgages for a long time. An expensive home is not necessarily a good investment ? things can change quickly in the real-estate market. When you buy your home it should really be a quality-of-life decision, not a replacement for a good long-term savings plan and well-balanced portfolio."