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bull , that is only one option for increasing net worth, , i took the money i didn't tie up in a house , rented and grew a whole lot more money in other assets..
again you are confusing the fact you already have the income and savings to buy and have options vs having zero money,low income and zero options to buy or rent and invest elsewhere..
first you need the money and income ,then you have the options in life.
without money for a down payment from the get go and the income to cover all the expenses and still have enough money left to live on nothing is a go .
simply put homeowners are wealthier because they have more that lets them be homeowners or they can be renters growing wealth with other investments. in either case it can be just as good ,just another path to increasing net worth.
you want to have no money , no credit ,no income but reap the benefits of growing something with near nothing.
to be honest ,yes it can be done using opm in creative deals offering sweat equity and connections if you had them but you are not the type to be able to come up with ways of doing it .
when the opportunity presented itself to become a partner in that real estate venture i had no where near enough money to buy in. but by being creative and utilizing pro's alot smarter than i am who know how to get other peoples money to fund things i was able to come up with convincing ways of getting the partnership to loan me what i didn't have.
someone else would have just walked away and said can't afford to do it and they would have believed that to be true for the rest of their life. in the mean time someone found a way , me, but i enlisted the help of some real pros to learn to make a convincing offer for financing it. .
Last edited by mathjak107; 12-01-2014 at 03:39 AM..
Hoomeowners build equity every month when they make an amortizing mortgage payment plus every month their home value appreciates. Try doing that with your rent. (And yes I know you can but the average paycheck-to-paycheck renter cannot.)
having no money has all the options of having nooooooo money. i am poor so i will be poor is usually how it goes unless one finds a way of not being poor first. but again in your case ,that is something you can't ,will not , have not and won't overcome.
increasing net worth is done many different ways and with many different investments or by cost cutting on the biggest expenses like housing costs ..
but you can't do any of the above without first having the resources and or ability.
Last edited by mathjak107; 12-01-2014 at 03:31 AM..
Hoomeowners build equity every month when they make an amortizing mortgage payment plus every month their home value appreciates. Try doing that with your rent. (And yes I know you can but the average paycheck-to-paycheck renter cannot.)
You are too intelligent to not understand what mathjak is saying. You're being deliberately obtuse.
Low Income = low likelihood of being wealthy because of low savings (in whatever form).
Higher income = better chance of being wealthy because better potential to save (although far from a guarantee). Higher income folks tend to buy houses, but that is not a given and it's not necessarily the house that made them wealthy. When you look a the net worth of the truly wealthy, the house they live in is usually a relatively small portion of their total net worth. Many well off folks don't count their house as a part of their net worth at all.
when we had the pa home i never counted it in any calculations, it would serve me no purpose other than the glory of the number.
since i would be retiring soon and my first years income will be a percentage of spendable assets so only the liquid assets capable of spinning off my yearly income were of concern.
the fact i was planning on living in the house made its worth a moot point. only the housing costs mattered and their effect on flow.
How many people do you know that are driving around in $40k plus new trucks that don't need one?
I work with a guy who just bought a full size GM truck on a 72 month note. The cruel irony is by the time he pays it off it will be rusted out and be worth about a $1.25 a pound or what ever the next mouth breather will pay for it.
bull , that is only one option for increasing net worth, , i took the money i didn't tie up in a house , rented and grew a whole lot more money in other assets..
again you are confusing the fact you already have the income and savings to buy and have options vs having zero money,low income and zero options to buy or rent and invest elsewhere..
first you need the money and income ,then you have the options in life.
without money for a down payment from the get go and the income to cover all the expenses and still have enough money left to live on nothing is a go .
simply put homeowners are wealthier because they have more that lets them be homeowners or they can be renters growing wealth with other investments. in either case it can be just as good ,just another path to increasing net worth.
you want to have no money , no credit ,no income but reap the benefits of growing something with near nothing.
to be honest ,yes it can be done using opm in creative deals offering sweat equity and connections if you had them but you are not the type to be able to come up with ways of doing it .
when the opportunity presented itself to become a partner in that real estate venture i had no where near enough money to buy in. but by being creative and utilizing pro's alot smarter than i am who know how to get other peoples money to fund things i was able to come up with convincing ways of getting the partnership to loan me what i didn't have.
someone else would have just walked away and said can't afford to do it and they would have believed that to be true for the rest of their life. in the mean time someone found a way , me, but i enlisted the help of some real pros to learn to make a convincing offer for financing it. .
I appreciate your knowledge and experience but later in life when retired the ability to live in a paid off home which can be reverse mortgaged if need arises is beneficial.
Otherwise that retirement income will be tied up in rent.
I am not sure there is much I can say. You have decided that loans and other forms of debt should be avoided. You think that is sound if not profound.
I used to think the same way. I bought my first half dozen or so cars with cash. I had such little debt that my credit score was actually quite low. So I bought a car with financing at a very low rate. That helped my credit score and I kept my money in investments. Now rates are so low it is foolish to pass up financing. I feel the same about my mortgage. This past year the money I covered with a mortgage earned me about $20k over the cost of the mortgage. I am not at all worried about interest rates. The Fed has been telegraphing the upcoming rate increases for months. I have structured my portfolio to avoid bond fund decreases and I should make even better returns when the increases begin.
Current interest rates are absurdly and artificially low. It only makes sense to take advantage of them when possible.
You will probably also not like my credit card use. I buy absolutely everything with a credit card. A few years ago I was able to buy a new three quarter ton diesel pickup truck with my credit cards... It took two of them. I paid my daughter's tuition with a credit card. The trick of course is to pay the card off immediately with no interest payments. I have an institutional card with double points. I have enough points stashed away for lots of airline travel for years to come.
Anytime you use credit or incur debt, there are risks. The trick is to use credit and debt wisely.
You can certainly limit your downside risk on your bond portfolio - no problem there. I think the whole issue comes down to the subjective matter of risk tolerance and there is no one-size-fits-all right or wrong answer.
Though I do not subscribe to the Efficient Market Hypothesis, I must point out that if there were truly such thing as a risk-free short-term 4% return, no investors would be in cash/short-term at all.
There is no way you have that high a discrepancy between renting and owning. Nobody would buy if that's the case, house prices would drop due to diminishing demand and renters would buy or rent would go up due to rising demand. I have never seen such discrepancy.
There have been even bigger discrepancies, believe it or not. In Taiwan, it is likely newly-minted landlords were making a 0% cap rate in 2010:
Hoomeowners build equity every month when they make an amortizing mortgage payment plus every month their home value appreciates. Try doing that with your rent. (And yes I know you can but the average paycheck-to-paycheck renter cannot.)
You are missing the point - it is not renting that causes a lack of wealth, it is the other way around.
Total housing cost as a percent of your income is a difficult issue for most renters, because renter incomes are generally much lower than homeowner incomes (median renter income in 2010 was almost exactly half median homeowner income) and renting is usually substantially more expensive per square foot than is owning. (I pay $4/sf/month to rent a room, most homeowners pay well under $2 to own.)
Median homeowner cost to own is in the neighborhood of 15-20 percent of income; renters typically spend at least twice as high a proportion of their income on housing. Half of all low income renters spend at least half their income on housing according to Mortgage News Daily; this is pretty much antithetical to saving.
You act like it's the home owner's fault for this. When in fact it's the renter's. Don't want a lower income - do something about it.
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