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The weird part is I don't think we really disagree that much.
I think you're reading stuff into my posts that isn't really there.
What's weird about it? I'd say it's all too common...
and such pretty much sums up MOST of what gets written in any thread after the first page or two.
I don't think anyone can deny that housing can be the biggest wealth killer or wealth builder so do your homework before you buy. I personally didn't buy a home until I was 35, now I own 4.5.
And that 200k down payment if invested fully earning 6% a year and reinvesting earnings would be worth 1.2mm at the end of 30 years with nearly no maintence costs
With the 800k mortgage your payment is roughly 3600.00 monthly, add in taxes and insurance and you can easily be at 4800.00 a month. Assuming you rented something 30% cheaper than that you have an additional 1430.00 a month to invest. If added to the down payment investment monthly you’d have 2.65MM at the end of 30 years. Notice this example does not include rent increase, maintenance costs for the house, tax or instance cost increase for the house either. The above example is just too simple and onesided
i had 30 years averaging of over 10% just following the fidelity insight newsletter ... many here use it and best of all it was done using plain old fidelity funds ... 100k invested is 2.90 million today , 10k is 290,000 ..even an s&p index fund is within 400k of that 2.90 million .. markets have averaged 8-9% at least , over every 30 year time frame since 1877. even the great depression time frame recovered adjusted for inflation in 4-1/2 years .
Last edited by mathjak107; 04-08-2019 at 08:23 AM..
Renting versus owning is a function of lifestyle, personal preferences, local housing conditions, and one's time horizon. Your primary home should not be viewed as an investment (though it may end up as one if one downsizes and cashes out at a profit) and many recommend it shouldn't be considered in your net worth calculations (far too many do often leading to spending more than they should based on illusionary and illiquid paper wealth).
We never treated our primary home like an investment. Instead is was just a forced savings plan through accelerated pay downs that grounded us and reduced the temptation to indulge in expensive vacations and purchases. I don't count my primary residence in my net worth but do so for other properties.
What's weird about it? I'd say it's all too common...
and such pretty much sums up MOST of what gets written in any thread after the first page or two.
Average CAGR for the S&P 500 1970-present is 10.22% (with dividend reinvestment) so 6% would be significantly below historical actually!
But that's no guarantee in the future and one would also need to calculate taxes into whatever they made at some point to account for that cost in their calculations as well as inflation.
Maybe I'm overly conservative but I calculate a return of 4% above inflation as pretty good especially if you diversify into lower risk investments.
But that's no guarantee in the future and one would also need to calculate taxes into whatever they made at some point to account for that cost in their calculations as well as inflation.
Maybe I'm overly conservative but I calculate a return of 4% above inflation as pretty good especially if you diversify into lower risk investments.
you can see inflation adjusted returns here for the last 50 years .
Maybe I'm overly conservative but I calculate a return of 4% above inflation as pretty good especially if you diversify into lower risk investments.
historically per Shiller, homes do not return 4% real. They return very close to 0% real or in other words match inflation or are slightly above inflation in some markets.
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