311–320 of 445 posts
You can take money and pay off your mortgage or you can take that same money, throw it in a low cost index fund, and keep the mortgage. Most people are going to end up better off with the later. Cash has the illusion of being safer but start talking about inflation and it starts to lose its luster.
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Generally, to break even you've gotta stay at least 5 years. The transaction costs of selling a house are enormous. Meanwhile, Microsoft stock is about 10x over the last 10 years. Transaction costs are minimal. I can sell it on a moment's notice. I was paid dividends. No insurance costs, no property tax, no maintenance. I just had to replace the roof on my house. Wow, that was a whopping bill. The roofer told me if I…
"Meanwhile, Microsoft stock is about 10x over the last 10 years. Transaction costs are minimal. I can sell it on a moment's notice. I was paid dividends. No insurance costs, no property tax, no maintenance." If you manage to pick Microsoft in 2014, Apple in 2000, Tesla in 2015 and BTC in 2010, you are definitely way better off not buying a house but keep renting.
On QQQ it's 450%.
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To each his own, but I get more peace of mind with a larger retirement account due to the low fixed rates we had in the US from 2009 to around 2022. I can't liquidate my house piecemeal when I need money like I can my brokerage assets.
But can’t those all go to zero overnight, leaving you with nothing? The same could happen with a home, but that’s what insurance is for. So I guess the gamble is between a natural or fire disaster or our financial system collapsing.
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Roofs are so expensive they factor heavily into what you can sell the house for. Asphalt shingle roofs are lucky to get 20 years, cedar shingles are even worse.
Too bad metal roofs don't look great on traditional houses... I would love to install that
I'm picky and it looks great.
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To each his own, but I get more peace of mind with a larger retirement account due to the low fixed rates we had in the US from 2009 to around 2022. I can't liquidate my house piecemeal when I need money like I can my brokerage assets.
This is one of those areas the Australian government has done ok in. Mandatory superannuation retirement funds. 11% (?) of all pay goes into this fund to be invested. Thus you can pay off the house and have an investment fund at the same time. You can withdraw from your fund if you have a hardship but it is generally considered best to not touch it.
Here is a mind bending concept. Those that hold a lot of cash are resilient. But that cash came from someone else getting into debt. That's because money IS debt. Money gets created when people take out loans. That debt ends up as income to someone else. If you hold a lot of savings, others had to get into debt to create the money that ended up in your bank account. If EVERYONE decides to hoard cash, then the economy…
If I stop saving, it won’t make their life better, it will just make my life worse.
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A house has intrinsic worth. It is a house, people live in it, it provides shelter by it's nature as a house. How many dollars it's worth to others is extrinsic, but it certainly has intrinsic value.
> A house has intrinsic worth It's value is only what people will pay for it. For example, a relative of mine died some years ago. She had a house full of expensive furniture. You couldn't give that furniture away, even though it was in perfect condition. It had no value. The average estate value, excluding land, houses, and cars, is about $900. I have friends who ran an estate liquidation service. You'd net somethin…
At least where I live, there would be a gulf between the estates of people who bought into the property market and those that rented their entire lives. Latter will have some furniture no one wants and scraps. The owners will have a $2m property and then investment property that get split up between their kids.
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This is one of those areas the Australian government has done ok in. Mandatory superannuation retirement funds. 11% (?) of all pay goes into this fund to be invested. Thus you can pay off the house and have an investment fund at the same time. You can withdraw from your fund if you have a hardship but it is generally considered best to not touch it.
I have a house and a brokerage account that’s worth a few times my what my house is (it’s rather modest). Nothing is stopping an American from doing both other than their own priorities (and I’ve neglected areas that other people find important - I rarely travel and drive a beater car for instance; to each their own).
On my end it is just a manner of optics. The money being put aside, I never see week to week thus it just seems like an added bonus even though it is really just a part of the pay cycle.
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Owning a house does not mean not owing anyone a cent. You still owe multiple types of taxes to the government. You still need to get insurance. You still need to make repairs. I actually find piece of mind in renting. I can always say screw it and move to the cheapest part of the country as I am getting closer to retirement age.
The ongoing expenses of owning a house are still there, taxes, insurance, maintenance, electricity, garbage disposal, water, gas etc. if you can't cover these, you're not debt free. As you get over retirement age medical expenses could dwarf all these. you need to be more than debt-free you need to be debt-free and a good cashflow and emergency funds you can call on. Just as you get to the top of the hill there is al…