The author is a clown. He completely omits the positive impact of leverage over long periods of time. For example, if I purchase a property that is “fairly valued,” with a 20% down payment and it increases at 3%/year (that is, zero real return after 3% inflation), my nominal return is 15%/year on my invested capital (and 12%/year after inflation) assuming I relever the property every few years to maintain 20% equity.

Omitting the impact of leverage when looking at buying a house or evaluating a real estate investment is like omitting the impact of earnings when valuing a company. It completely discredits the author.

Furthermore, his 7% real return assumption from owning businesses is largely dependent on his starting points for calculating such returns (when valuations were relatively low). There have been plenty of one- to two-decade periods for which the return from owning businesses was in the low single digits. It’s probably best to assume a “real return” of about 4% over the long term. That’s 2% productivity growth plus 2% growth in the population – and I’m being VERY generous.

It’s hard to believe that articles this fallacious actually get published. Who edits this stuff?