by your own rent—rent you would have had to pay any-way," Roy concluded.
"You're saying that our parents didn't turn thirty thousand dollars into one hundred and seventy thousand; they turned six thousand into one hundred and seventy thousand. Right?" I repeated Roy's earlier statements to confirm my understanding.
"Precisely, Dave. And that represents an average annual compound return of. . . around eleven and three quarters percent." Roy's answer was aided by James Murray's watch-calculator.
"Is that all?" Cathy wondered.
"Is that all?" Roy echoed, with a look of dismay. "Hey that's not bad, especially when you consider the other ad-vantages of home ownership."
"I didn't mean it that way," Cathy defended herself. "I realize eleven and three quarters percent is a more-than-decent rate of return. It's just that I thought it would take a lot more than that rate to turn six thousand into one hundred and seventy thousand over thirty years."
"The magic of compound interest never ceases to amaze," Jimmy added.
"That is a good rate of return, Roy," Tom resumed. "Especially because, as you said, there are other benefits, too. The interest portion of your mortgage payments is tax-deductible, isn't it? And the whole time you're making all that money, you get to enjoy living in the comfort of your own home. No wonder people say their house is the best investment they've ever made!"
"Your points are well taken, Tom," Roy began. "Your mortgage interest is fully deductible and, what's more, you are also able to claim a deduction for your property taxes.