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Old 10-02-2018, 08:07 AM
 
2,697 posts, read 1,723,902 times
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Quote:
Originally Posted by oceangaia View Post
Doesn't change the fact that it took another person's money to build the space you are renting. And I said rent isn't technically a debt but it is an amount you are going to have to pay going forward if you want to have a place to live.
Yeah, great. It also took money to create the food I’m going to have to eat year after year to live. Do you want to tell me that that’s debt too?

Those are all just future cashflow expenses. Your rent could turn out to be more or less than a mortgage, but if that’s your point I say “ok, great. Everyone knows that”. That doesn’t mean a rent is a debt like a mortgage. You’re paying for space at a price marked up for profit. You aren’t paying for use of money.

Last edited by Thatsright19; 10-02-2018 at 08:28 AM..
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Old 10-02-2018, 08:41 AM
 
Location: Boise, ID
8,043 posts, read 23,637,187 times
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I remember having an application once for one of my rentals. I was reviewing the credit report and came across a $100k loan. In my area, at that time, $100k was not unreasonable for a starter home mortgage, so I thought "this must be an old mortgage". Nope, it was a student loan. Got a little further, saw another one, it was another student loan. Then a third and a fourth. All told, they had nearly $400k in student loans, in a time and place where $400k gets you a very nice house. That wasn't counting their credit card debt.

But both of them had medical related degrees, and had recently graduated and obtained good jobs. They were paying off $50k a year of that debt, so planned to be debt free in under a decade. It isn't all about the debt number.
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Old 10-02-2018, 08:42 AM
 
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Quote:
Originally Posted by oceangaia View Post
Most landlords don't set the monthly rent for less than the monthly expense, including all mortgages, taxes, and repairs. So generally when you rent, you are paying all those costs indirectly.



Almost all rent/own comparisons I've seen that show renting to be financially better involve renting a place considerably smaller and less desirable than buying a house. You can't compare a 4/2 2400sqft home with a 2br 1200sqft apartment.

Rents are typcially set by the market not by a personís personal expenses to rent out the property
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Old 10-02-2018, 10:10 AM
 
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Quote:
Originally Posted by treasurekidd View Post
Creepy jackass? Isn't that a little harsh? The man uses common sense ideas to help people turn around bad financial situations and address the bad financial decision making that got them there. He's been there himself, and he uses his experience to help others. Personally, I think he's great.
Itís better than he deserves

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Old 10-02-2018, 10:15 AM
 
9,616 posts, read 4,517,318 times
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Quote:
Originally Posted by Thatsright19 View Post
Yeah, great. It also took money to create the food Iím going to have to eat year after year to live. Do you want to tell me that thatís debt too?

Those are all just future cashflow expenses. Your rent could turn out to be more or less than a mortgage, but if thatís your point I say ďok, great. Everyone knows thatĒ. That doesnít mean a rent is a debt like a mortgage. Youíre paying for space at a price marked up for profit. You arenít paying for use of money.

Servicing your "debt" is also a "future cashflow expense". My point is that if you want a place to live and want to have food to eat, you are going to have future payment obligations either way, but if it is in the form of "debt" then it's somehow a big dirty deal. You don't really have any more "freedom" by paying those future cashflow expenses in the form of rent or pay-as-you-go than you do in the form of debt repayment.
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Old 10-02-2018, 10:17 AM
 
2,697 posts, read 1,723,902 times
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Quote:
Originally Posted by oceangaia View Post
Servicing your "debt" is also a "future cashflow expense". My point is that if you want a place to live and want to have food to eat, you are going to have future payment obligations either way, but if it is in the form of "debt" then it's somehow a big dirty deal. You don't really have any more "freedom" by paying those future cashflow expenses in the form of rent or pay-as-you-go than you do in the form of debt repayment.
I didnít think I ever disputed that
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Old 10-02-2018, 10:19 AM
 
9,616 posts, read 4,517,318 times
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Quote:
Originally Posted by Lowexpectations View Post
Rents are typcially set by the market not by a personís personal expenses to rent out the property

And the market is influenced by the collective expenses to rent out the property. Simply put, landlords are not doing it to lose money. While some individual landlords may be in a sweet situation or lousy situation, on average the landlords are going to collect a rent that covers their total expenses plus profit, or else you'd see a lot of landlords get out of the business and then supply-demand would drive up rents.
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Old 10-02-2018, 10:25 AM
 
11,854 posts, read 21,430,254 times
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A mortgage also has an end date and once paid off a $1,000 monthly payment becomes a few hundred a month in taxes and insurance.

If one is renting you can move out and not be subject to long term debt payments, ie go rent a room, move in with a parent/friend, sleep in a car (drastic measure). If you have a mortgage there is nothing you can do but sell the home if you get into trouble.
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Old 10-03-2018, 08:11 AM
 
Location: Tennessee
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Doctors could easily end up in this position. Cash flow can be tight for awhile, but if they're already making $230k before 30 means they probably still have a lot of runway.
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Old 10-03-2018, 10:05 AM
 
Location: Charleston, SC
1,353 posts, read 757,764 times
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She is 29 and her husband 32 and they are nearly in $1,000,000 in debt.
She and her new husband live in D.C. and her debt as follows:

Mortgage $210,000. $335,000 student loans, $136,000 credit cards debt, $44,000 personal loans, $35,000 in car loans.

They make $230,000 a year.



They're really not all that far off track at their ages, in my opinion.

Their Mortgage Debt is typical in their income bracket, and probably provides a Tax write-off.

The Student Loans are about right for what sounds like two Graduate Degrees, they can string that along as needed.

The Credit Card Debt is what would worry me -- they're probably paying interest in the 24% category. That should be paid off ASAP !!

And $44K in Personal Loans, on top of Big Car Loans.....ouch !! Shudder to think what those terms are.
But they could be free & clear of most of the usurious debt within 10 years. At age 40 or so, they would have plenty of time to pump up their retirement nest egg.

I don't think we'll have to hold any Benefit Spaghetti Dinners for these two.
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