CS 007: Personal Finance for Engineers – Stanford University 2017-20 • Hacker News Board

Re: CS 007: Personal Finance for Engineers – Stanford University 2017-20

#41

Post by appleiigs » Mon, Nov 25, 2019, 11:02 PM UTC

sersi wrote: post #31

wil421 wrote: post #19

Earlier quoted context omitted.

Thanks I’ve been watching videos on YouTube about becoming a millionaire in retirement. They say mortgages and car payments are bad in any form. To them any debt is bad no matter what it is and drags down their calculation of becoming a millionaire. Their calculation for net worth is all savings minus any form of debt.

Car payments and mortgages are very different things. A car payment is a loan for a depreciating asset. So even after you finish repaying your car, at the end you have an asset that's worth much less than what you paid for it. A mortgage is different, by getting a mortgage and buying a house, you build up your assets with every payments you make, it's often better than paying a rent and not getting anything in the en…

No, car payments and mortgages are very much similar things. Excluding the land, your house depreciates. You have to spend money to maintain both. The rent expense goes to the landlord, and the mortgage interest goes to the banklord. Rent is often cheaper, saving you money. And the savings can be invested and grow in value. You get that in the end.

Re: CS 007: Personal Finance for Engineers – Stanford University 2017-20

#42

Post by dannykwells » Tue, Nov 26, 2019, 12:12 AM UTC

Bostonian wrote: post #36

neonate wrote: post #28

It seems to me a bad sign for computer science that this is part of the curriculum. It shows what the degree is really about, and when a field becomes about that, it is decadent.

Stanford costs about $275K for 4 years. Of course students and their parents spending this kind of money care a lot about the financial payoff.

The sticker price of Stanford is not what it actually costs most students. Stanford is a zero loan school. Students do not graduate with debt.

And also, then, why is this class not for everyone?

Re: CS 007: Personal Finance for Engineers – Stanford University 2017-20

#43

Post by thfuran » Tue, Nov 26, 2019, 5:08 PM UTC

neogodless wrote: post #20

thfuran wrote: post #7

Earlier quoted context omitted.

Buying a house shouldn't make your net worth go negative (unless it massively depreciates, I guess). The mortgage balance is debt, but it's backed by the value of the house.

Not sure of location of parent comment, but in the United States, buying a house includes a lot of initial expenses, called "transaction costs." Things like purchasing title insurance, prepaying taxes and insurance for the escrow, paying for inspections and appraisals, and of course the bank has some fees they roll into the mortgage. So unless you value the house you just purchased for more than the purchase price an…

Yeah, I suppose if you start with 200k and manage to get someone to give you a mortgage with nothing down for a 20 million dollar house or something crazy like that, your transaction costs might wipe out your net worth.