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Renting is where wealth is redistributed from those unable to retain their own wealth, to those able to command wealth from others.
My wife and I don't own a home, and have no plans to buy one anytime soon. We retain wealth just fine, thank you very much.
Quote:
Originally Posted by Mircea
Then migrate to a place where you can afford a home.
Impossible, he works in a very specialized field (flipping burgers) so is required to stay in the extremely high cost of living area year after year, despite full employment it would be impossible to ply his trade at any of the many low cost areas of this country.
If your mindset is to argue every last Fed policy and conventional economic theory until you use up the last unbound O2 molecule on earth, then you're not capable of taking the step back that teaches you that economics is malleable fairy tales and that there are different ways of looking at the big picture. I choose a viewpoint that puts individuals, families and communities first, and basically tells corporations to go sit in the corner and shut up. And governments to be truly for the people... not economic theories and corporate bottom sessions.
Some nations actually get this, but then, they don't have to deal with the inbred and usually misplaced arrogance of independence Americans have.
My wife and I don't own a home, and have no plans to buy one anytime soon. We retain wealth just fine, thank you very much.
Impossible, he works in a very specialized field (flipping burgers) so is required to stay in the extremely high cost of living area year after year, despite full employment it would be impossible to ply his trade at any of the many low cost areas of this country.
If you pay rent, you are effectively transferring wealth to the recipient of your rent.
There are times and life stages where this is optimal, including cases where putting your wealth into home equity would provide you a lower ROI.
But you can't argue that you would not retain more wealth by owning. That's all the statement said.
(I will concede that narrow circumstances can be devised wherein renting is economically superior in a wealth-building plan, but just that... narrow.)
I didn't even say that much. For many homeowners, the intangible benefits of owning their home are valued more highly than financial returns.
For some renters, the intangibles of renting are more highly valued than the intangibles of owning, and/or they are able to build wealth faster OUTSIDE of home equity than within it.
So the total household wealth is 96 Trillion. And we have a population of 323 Million. Including babies, elderly, teenagers, etc. That equates to a wealth of 297K per ever person alive in America today, clearly an extremely wealthy country. But I know few people with 300K net worth. Much less babies, teenagers, or millennials with that level of wealth. Most are much lower. A few are higher, but not astronomically so. How can our country be so rich in terms of household wealth when everyone seems so poor?
Most of my older relatives with paid-off homes have a higher net worth than that. Even I have a higher net worth - much higher. It's really not that much...if you are older.
But you can't argue that you would not retain more wealth by owning. That's all the statement said.
I don't think so.
"Renting is where wealth is redistributed from those unable to retain their own wealth, to those able to command wealth from others"
To me that makes no statement about which avenue is advantageous for wealth accumulation, it was a simple statement that people who rent are unable to retain their own wealth. It's false.
Quote:
Originally Posted by freemkt
If you pay rent, you are effectively transferring wealth to the recipient of your rent.
If I pay Netflix, I am effectively transferring wealth to the sender of videos.
If I buy a tamale down the street I am effectively transferring wealth to the lady with the basket of tamales.
If I buy a monthly gym membership I am effectively transferring wealth to the mamado that owns it.
If I pay rent for my apartment I am effectively transferring wealth to Paula and her Mom.
None of these statements backs up your claim that renting precludes retaining wealth, unless you want to also ding homeowners for not retaining wealth when they buy a beer at the pub.
Then migrate to a place where you can afford a home.
Prove it.
No such rules exist.
A group of poor people could easily pool their money to buy and flip properties to make money.
1) I don't think a single burger flipper can afford / qualify to mortgage a single-family detached house anywhere in this country.
2) Do SEC rules allow, say, 5,000 individuals to pool $100 each for real estate acquisition? When I looked it up they would have to do the IPO thing with all the expense and hassle that entails. After the costs are accounted for, could such a project even be profitable? Especially after Goldman Sachs takes its cut? (Assuming they didn't toss their cookies in ridicule.)
To me that makes no statement about which avenue is advantageous for wealth accumulation, it was a simple statement that people who rent are unable to retain their own wealth. It's false.
If I pay Netflix, I am effectively transferring wealth to the sender of videos.
If I buy a tamale down the street I am effectively transferring wealth to the lady with the basket of tamales.
If I buy a monthly gym membership I am effectively transferring wealth to the mamado that owns it. If I pay rent for my apartment I am effectively transferring wealth to Paula and her Mom.
None of these statements backs up your claim that renting precludes retaining wealth, unless you want to also ding homeowners for not retaining wealth when they buy a beer at the pub.
If you make a mortgage payment, you are retaining (some of) your wealth, plus you are capturing ALL value appreciation.
Try doing THAT with rent.
Yes, it is possible for a renter to increase their wealth by investing elsewhere (outside of home equity) but most renters do not have that option.
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Much less babies, teenagers, or millennials with that level of wealth. Most are much lower. A few are higher, but not astronomically so. How can our country be so rich in terms of household wealth when everyone seems so poor?
