Great Investment?
For some reason many of us have this obsession with owning a home. Renting is "throwing money away" the old timey advice goes. But why don't we apply that same logic to other services we use?
• Going to the grocery store?! You know food grows out of the ground for free, right?! That's throwing money away! Buy a farm!
• Buying a plane ticket?! You know airlines are profiting off you, right?! That's throwing money away! Buy a plane! (Side note, some actual good advice I've heard from 1%ers is to "rent don't buy anything that floats, flies, or f*&#$")
Just like a farm and a plane, owning a home costs money! Property taxes, maintenance, insurance, mortgage interest, realtor fees... Those are all sunk costs that aren't paying down the principal of the mortgage or increasing the property value. On the flip side, there are some economies of scale to renting. Apartments are cheaper to build, heat, and maintain on a per unit basis. Paying for that service can be cheaper than owning.
So is renting always better? Of course not. What's financially better is spending less whether you rent or buy. Past that, it generally much more of a lifestyle choice than a financial one. Don't want to be tied down or deal with maintenance? Maybe renting will make your life easier. Love home projects, remodeling, and landscaping? Maybe you'll love owning a home!
So don't let this weird societal norm make you feel bad if you're renting. It could be the best financial and lifestyle choice for you! I rented until I was 38 years old. Now the home I BOUGHT IN CASH costs me more per month than rent at my old place! So silly.
OH, AND HAVE YOU HEARD THE BIG NEWS?! We're launching a NEW COURSE on MONDAY September 26th. It's called "How to Money Like a Millionaire" and walks through how to set up your financial life like to maximize your wealth. We'll cover your net worth, credit score, debt, credit cards, budgeting, banking, insurance, taxes, and estate planning! You can't order yet, but you can sign up for updates at my link in bio!
As always, reminding you to build wealth by following the two PFC rules: 1.) Live below your means and 2.) Invest early and often.
-Juniver888