Housing is the classic example of this leverage. My parents bought their first house in suburban Vancouver, Canada, in 1977 for $69,000. At the time, it was a large sum of money for them. But with a down payment of $10,000 and a mortgage of $59,000, they were on their way to seeing the benefits of buying assets in an inflationary environment. Their incomes rose over the course of their careers, and with that rise in incomes, the mortgage of $59,000 became easier to pay. All the while, inflation also increased the value of their home: today it’s worth about $1.5 million.
