An illustration of labor force growth in the Pittsburgh MSA (a.k.a. what a "dying" MSA does not look like)

[ML North]

Originally Posted by Katiana

they did both. It is doable.

It's possible to own a home and an investment portfolio, that's obvious.

What's not possible is that, given two alternatives which perform differently and have different sensitives, you can reap the maximum reward of both conditions in any possible outcome. The job of anyone investing any amount of money is to try to plan for an acceptable outcome for all the situations that are likely to occur, and committing a disproportionate amount of capital to a single asset may leave you open to bad outcomes in all sorts of scenarios.

There are a million variables which are different for everyone, so clearly one out-of-the-box formula doesn't work in all cases.

[ML North]

Originally Posted by sealie

I think one thing supporting what ML North is saying is that people are willing to rent small apartments at $700 but as soon as they buy, on average, people want a freestanding house with a yard and a garden and a dog and they want updated interiors. Easily their housing costs double as soon as they buy rather than rent. This never shows up in the calculations. They could keep renting and invest the remaining $700/mo.

Right, there are all sorts of things like that. If you have periodic cash flow to invest in a different mix of things over a known time period, there are millions of different mutually exclusive permutations which can satisfy all of your basic needs. To choose which of those permutations will definitively lead to the best outcome for a given scenario is improbable. To choose one of those permutations will definitively lead to the best outcome in all possible scenarios is, in this case, impossible.

[Katarina Witt]

Originally Posted by ML North

I'm not sure of anything, all we can do is try our best and hope that luck is on our side. But seriously what alternative are you suggesting, that we should all just listen to you?

Holy crap! What advice did I give out? I'm having a discussion. What about you?

[ML North]

Originally Posted by Katiana

Holy crap! What advice did I give out? I'm having a discussion. What about you?

If you're denying the conventional definition and logical implications of the concept of opportunity cost (which is an absurd premise, but I'll entertain the discussion), how do you suggest choosing between the various options for simultaneously providing oneself with housing and generating wealth? Or, alternatively, is it your position that there are not various options?

[Moby Hick]

Originally Posted by ML North

If you're denying the conventional definition and logical implications of the concept of opportunity cost (which is an absurd premise, but I'll entertain the discussion), how do you suggest choosing between the various options for simultaneously providing oneself with housing and generating wealth? Or, alternatively, is it your position that there are not various options?

I fail to understand how anything in this thread could be construed as denying the concept of opportunity costs.

[ML North]

Originally Posted by Moby Hick

I fail to understand how anything in this thread could be construed as denying the concept of opportunity costs.

I would say that the following falls under the "denying the logical implications" category. Or something.

Originally Posted by Katiana

Unless you're going to pitch a tent somewhere, you'd rent a home instead. Next question.

Or perhaps I don't understand the rhetoric.

[Katarina Witt]

Originally Posted by ML North

I would say that the following falls under the "denying the logical implications" category. Or something.



Or perhaps I don't understand the rhetoric.

You were asking, in my opinion, what you'd do with your money if you didn't buy a house. I responded that you'd have to pay rent, somewhere. That takes up a good bit of the money one has to invest, especially as you get older and are looking for more than a 1 BR hovel. (I've lived in some.) I then elaborated that first/last month's rent + security deposit required by some landlords can comprise a fair amount of money, close to what one would pay in down payment for some homes. That's what you'd be doing with your money if you didn't buy. A person always has to have a place to live!

[ML North]

Originally Posted by Katiana

You were asking, in my opinion, what you'd do with your money if you didn't buy a house. I responded that you'd have to pay rent, somewhere. That takes up a good bit of the money one has to invest, especially as you get older and are looking for more than a 1 BR hovel. (I've lived in some.) I then elaborated that first/last month's rent + security deposit required by some landlords can comprise a fair amount of money, close to what one would pay in down payment for some homes. That's what you'd be doing with your money if you didn't buy. A person always has to have a place to live!

I agree with all of this, and I think choosing between the various options is not at all cut and dry. That's all, really.