On Saving for Your Kids and Keeping Up With the Joneses

Ever since I moved away from my hometown of Niagara Falls, N.Y. (which is now even more famous thanks to Nik Wallenda!), I have lived in some of the nation's most expensive real estate markets, particularly San Francisco; Orange County, Calif; Los Angeles; and Santa Monica. I never bought into the notion of home ownership as the American Dream in these places. I hardly ever considered it a sensible option.

I never felt like I had enough cash to get the ball rolling on a purchase. And I never felt comfortable with the notion of the place you live in as an investment. I would rather have free cash flow every month to save and invest. I feel like I have a better chance achieving the aforementioned goals by taking that route and not putting every last dime into a mortgage payment and ownership-related expenses.

More people seem to agree with that sentiment today, in the wake of the housing crash, than a few years ago when homeownership was the cornerstone of the (runaway) American dream.

I know people who live off the income they generate each week and/or month writing Apple(AAPL) covered calls.

I prefer that type of financial security over living to pay a mortgage and all of the other, often out-of-the-blue, costs associated with home ownership.

Sure, the well might run dry on Apple someday, but there will always be an opportunity to replicate a similar income stream if you have the capital to make it happen.

I'll keep my money in that type of asset any day of the week over the relatively illiquid dwelling that ties up my cash for the purpose of shelter.

Last week I wrote an article titled My 8-Year Old's Portfolio Will Kick Your Portfolio's ... -- about the custodial account I set up for my daughter.

We dollar cost average into shares of Kraft(KFT) , Viacom(VIA.B) and Madison Square Garden(MSG) . I promised to update that portfolio so, here it goes, as of Friday's close:

• KFT, + 0.74%, VIAB, + 2.17%, MSG, + 1.65%
• Portfolio value: $1,015.14, +1.51%

Although it's helpful to be transparent about performance and such, that's really not what I take away from the process. It's more about what we're building.