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Most Germans don’t buy their homes, they rent

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Re: Most Germans don’t buy their homes, they rent

#191

Post by aianus »

Jtsummers wrote: post #169
aianus wrote: post #165

Earlier quoted context omitted.

It takes ten minutes to earn $10 doing software engineering. In no universe am I cooking a better meal in less time.

If you strictly want to maximize your money , you're probably making the best choice for yourself. For many of us, time with family, friends, hobbies, is a relaxing and physically/mentally/emotionally healthy thing to engage in, rather than trying to exploit every waking hour for income.

So instead of spending time with the family, friends, and hobbies you'd rather slave away in front of a stove to save $600/mo?

Re: Most Germans don’t buy their homes, they rent

#192

Post by dasmoth »

ZeroGravitas wrote: post #57
bryanlarsen wrote: post #15

Earlier quoted context omitted.

I know some incredibly debt-averse Americans, and they all consider mortgage debt to be "good" debt. They still try to minimize it, and pay it off as quick as they can, but they all would recommend reasonable mortgages.

Part of that might be tax incentives for mortgages, which another commenter claims Germany doesn't have

The UK doesn't have tax incentives for mortgages any more, but they're still popular.

I think the big distinction is that -- unlike nearly anything else you might buy on credit -- houses don't really depreciate. Even without the overall rising house prices, relatively few people value a 20 year old house at a meaningful premium over a similarly-sized 40 year old house. So it's comparatively easy to justify as an asset counter-balancing the debt.

Re: Most Germans don’t buy their homes, they rent

#193

Post by Noughmad »

thesimon wrote: post #76
Noseshine wrote: post #26

Earlier quoted context omitted.

From the PoV of someone who once co-owned a small business in Germany that accepted card payments: The reason they are "evil" is that they charge the dealer the by far largest fees. Cache: no fee. EC card: small fee. Credit card: large fee. And of course I can't ask the customer to pay for it, I must have one price for all. It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). It's no…

>Cash: no fee Because it just magically transfers from your register to your bank account? :) >It was something like 1% vs. 3% (approximately(!), just to give an idea of magnitude). I know, but by now it is down to 0.9% for most retailers so not accepting credit cards is always an interesting decision. >most credit cards cost a yearly fee of 20-70 Euros or so When you get a card to collect airline miles or get the ca…

My bank card in Slovenia is contactless. This has nothing to do with it being a credit card or not, although some bank only offer contactless credit cards.

Re: Most Germans don’t buy their homes, they rent

#194

Post by nommm-nommm »

riprowan wrote: post #126
cm2187 wrote: post #5

So in Germany, the interest on a mortgage is non tax deductible. The article doesn't mention it but I understand that property owners are also liable for capital gain tax if they hold the property less than 10 years. I think that makes sense. There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds, which enable companies to raise money…

> There is no reason to favor individuals investing into an unproductive investment (property) over productive investments (stocks and bonds). I beg to differ. I think that real estate, like farming, has critical societal benefits that are worthwhile to develop and maintain. Namely, it is very difficult to raise a family of four in a mutual fund. Investing in a home may is absolutely "productive." See, there are sign…

>1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles. Even if all of them are unemployed, all of them have a roof over their heads.

Until you can't afford to pay the taxes, utilities, insurance, and maintenance. My grandma bought her house outright with my grandpa's life insurance money. No mortgage ever. It was a terrible choice because she didn't have the money or wherewithal for maintenance or utilities. 30 years later the house was literary falling apart. As you can imagine, the utility bills for a house with gaping holes in the roof were astronomical. It was a positive feedback loop. She lived with massive anxiety about shit getting old and breaking. We all really hoped her house would stay upright until she died. It did, thankfully. She would have lived a much better quality of life in an apartment.

>2. A paid-off home frees up cash flow. It allows the owner to divert his earnings into other activities or investments or reduce the amount he has to earn monthly.

Renting frees up cash flow sooner thus allowing interest to compound much more.

> Real estate can be borrowed against. Try that with stocks. If you are an entrepreneur, your home is likely the asset you will use to acquire bank financing for your business.

You can borrow against your 401(k). Then there's the people who borrow against their 401(k) to buy a home, yes, those exist... I personally know some.

Anyways, I own a home, I'm not anti-home ownership. I just can't stand the myths about home ownership.

Re: Most Germans don’t buy their homes, they rent

#195

Post by monksy »

filmor wrote: post #133
SyneRyder wrote: post #119

Earlier quoted context omitted.

That's really intriguing. The fees you're describing are the same in Australia (2.9% on AmEx) and don't seem particularly evil at all. A few stores do charge a credit card surcharge here, but the majority of retailers don't anymore. As a near-annual visitor to Germany, it drives me nuts that I can't use my Australian credit card everywhere (especially at Saturn). I would LOVE to have an EC card, but it seems there's…

Since last year Saturn and MediaMarkt (basically the same company) apparently allow payments via Visa or MasterCard ;)

Oh wow that's a huge deal. I remember seeing posts on ToyTown about people buying washers/driers with cash because CC wasn't accepted.

Re: Most Germans don’t buy their homes, they rent

#196

Post by heisenbit »

Spooky23 wrote: post #180
kgermino wrote: post #164

Earlier quoted context omitted.

How does anything on your list stem from owning vs renting? Presumably if you were renting - you would still garden and you or your landlord would still maintain the lawn - your landlord would still maintain the house - you would still be living in the community and therefore motivated to participate in it's government - I don't understand this one at all. Why would a second family suddenly move in if the house was r…

Residential properties usually have short term leases. You have minimal incentive as a tenant to plant flowers, buy shrubs, etc. You have minimal inventive as a landlord to make the house look any more attractive than it needs to be. Landlords don't maintain property to the same standard as an individual homeowner, when they do, they use more efficient service models (ie. a single crew with a single set of tools) to…

"Residential properties usually have short term leases."

Not true in Germany. Most leases are indefinite. As the contractual rent often increases by less than the market there is some incentive to stay put. Also keep in mind that moving in Germany is an expensive proposition as the kitchen is usually not part of the deal.

Re: Most Germans don’t buy their homes, they rent

#197

Post by darkhorn »

andreasklinger wrote: post #9
DocTomoe wrote: post #2

Being German I want to pPoint out that the article leaves out one cruicial detail: Building your own home puts you into debt for quite literally the rest of your life. We do not like debt.

+1 To explain cultural difference: - In the US you are considered financially stable if you are always paying your debt/credit on time. - In the germanic countries you are considered financially stable if you have none. My US Bank clerk needed a few meetings to convince me that it is good to build go into monthly credits (creditcard) to support my credit score.

>My US Bank clerk needed a few meetings to convince me that it is good to build go into monthly credits (creditcard) to support my credit score.

Uhmm, can't a bank see your salaries? Because in Turkey they want to see your salaries. You enter to www.turkiye.gov.tr and print out your last 12 months salaries with a validation number and then hand it to your bank. Or you ask from your employer, he ask it from Social Security, travels back to you and you hand it to your bank.

Then they check wheter you had missed to pay back your credit (even to another bank, because they share data). And they check wheter if you were rejected by an another bank (because they share data).

Basically, your score is high if your salary is high.

Re: Most Germans don’t buy their homes, they rent

#198

Post by kgwgk »

mtw wrote: post #175
coldtea wrote: post #117

Earlier quoted context omitted.

From what I see, most people use the CB, but: "Euromonitor International, a market research company, estimated that there were just 34 million French credit cards in circulation" (0.5 per person, in contrast the US has ~4 cards per person). Average credit card spending per French annually is $300 -- so quite insignificant compared to Americans (which would be almost half their annual salary if not more).

A credit card in France is not the same as a credit card in the USA or Canada. In France, a purchase paid with a VISA/Mastercard is taken directly from your checkings bank account. Yes it is called "carte de crédit" i.e. credit card but when you think about it, it is not actually credit. In Canada, paying with VISA/Mastercard is considered as credit i.e. debt. You can pay with VISA even if at the present moment, you…

Do you have any reference for the French "cartes de crédit" not being the same as the credit cards elsewhere?

Re: Most Germans don’t buy their homes, they rent

#199

Post by marcosdumay »

Kalium wrote: post #158
coldtea wrote: post #69

Earlier quoted context omitted.

> Your future mobility to pursue jobs in other cities, becoming significantly constrained Perhaps the idea of people who haven't adopted this is that, unless they like doing so, humans should not have to live like nomads moving here and there to pursue this or that financial opportunity, but instead should be allowed to grow roots in some place, help shape it and improve it, connect with their neighbors, etc.

People are allowed to grow roots, shape and improve a place, and connect with their neighbors all they like. This is the state of places like the USA today. People aren't allowed to demand that the economy provide them with all the means they might wish for to do these things in any arbitrarily selected location.

> People are allowed to grow roots, shape and improve a place, and connect with their neighbors all they like.

Well, their landlord may disagree.

That is, if they are renting... what is what this discussion is about.

Re: Most Germans don’t buy their homes, they rent

#200

Post by Jtsummers »

aianus wrote: post #191
Jtsummers wrote: post #169

Earlier quoted context omitted.

If you strictly want to maximize your money , you're probably making the best choice for yourself. For many of us, time with family, friends, hobbies, is a relaxing and physically/mentally/emotionally healthy thing to engage in, rather than trying to exploit every waking hour for income.

So instead of spending time with the family, friends, and hobbies you'd rather slave away in front of a stove to save $600/mo?

I don't slave. It takes me 30 minutes or so to have a complete meal most nights. But only, perhaps, 10 minutes of my time. I start the rice as soon as I get in from the gym. Meats and vegetables get prepared after my shower. If it involves the stove, they're done in approximately ten minutes for most of my recipes. If it involves the oven, I may spend up to ten minutes in total on prep before tossing them in to bake.

I guess I don't make the most involved meals, but they certainly taste good.

EDIT: Besides, why can't the time I spend cooking be with my family or friends? Not like my home is big, if my girlfriend doesn't want to be in the open floor plan kitchen/living room/dining room and would rather hide in the bedroom, I guess she can. Would be awkward. Similarly for when friends are over. It's not like I need intense concentration while I cook, just enough to not burn/cut myself or burn the meal.

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