Baby boomers in the US hold $19 trillion in residential real estate out of the $47.9 trillion total value. Lena, a 32-year-old single mom, inherited $420,000 and faces a decision: buy a home for stability or invest in stocks for retirement and her son’s education. Stocks historically outperform real estate, offering higher returns and lower ongoing costs. Lena could potentially grow her $400,000 inheritance to $1.21 million in 15 years or $5.3 million in 35 years by investing in an S&P 500 index fund. Real estate, while less volatile, comes with ongoing costs and challenges, especially on a waitress’s salary. Lena could choose a smaller home under $400,000, but unexpected repairs or emergencies could strain her finances. Stocks offer lower fees and easier access to funds compared to real estate. Lena could potentially manage both homeownership and stock market investing by relocating to a city where homes are $200,000 or less. However, moving could increase her expenses, especially childcare costs. Investing $200,000 in an S&P 500 index fund could grow to $605,125 in 15 years and $2.65 million in 35 years, while a $200,000 home could appreciate to $1.3 million in 35 years. Ultimately, Lena’s decision between buying a home and investing in stocks depends on her personal goals and financial stability. Strong financial habits like staying out of debt, building an emergency fund, and setting clear goals will be crucial for her long-term financial success.

Read more at Yahoo Finance: My estranged dad left me $420K when he died and I want to make the most of it. Should I invest in stocks or buy a house?