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Talking stocks, trading, and investing in general - Page 689

post #10321 of 11182

Surprisingly in Germany it is common for people to be long-term renters and never purchase a home.  Repairs are a pain in the ass so why not have a landlord fix the large problems?  I see pros and cons for both but we are homeowners.

post #10322 of 11182
The nice thing about long term renting in other countries is that they do things like bring their own appliances when they move in, and because there is a culture of long term renting, there are more quality homes for rent and often a bit more leeway in customizing the home to fit your needs.

In America, renting (especially outside of big city centers) often gets you shitty contractor grade stoves in kind of sad buildings in less desirable locations.
post #10323 of 11182
Quote:
Originally Posted by brokencycle View Post

So you think my best course of action is to lower my standard of living by moving into a less expensive apartment to save for a house I can already easily afford just so I don't have to a sucker to the bank?  Maybe I can really save money by moving into the assisted living facility with my mom!  You think my best course of action is to stop paying 3.5% interest (which is effective less because of the tax deduction) on a 30 year note while putting money in investment accounts averaging 7-8% gains just so I don't have to be a sucker to the bank?


My life's work isn't being siphoned off by the bank.  I pay almost half my income to income taxes at various levels, my mortgage payment is less than 20% of my income.  Who is really siphoning off my life's work?  

I looked at duplexes - the only ones in my price range were shit holes filled with less than desirable tenants in a crappy part of town.  When you walk into an apartment that has six adults living in a three bedroom duplex that rents for $800/mo, they're all home, and they have massive big screen TVs in every room, you think "maybe I don't want to deal with that."  But you're right, I'm poor, stupid and bad with money.  If only I was born into a family that I could have inherited property from! 

I don't know what your best course of action is, I'm simply presenting an alternative way to consider housing that doesn't follow this standard model that many seem to think is the "right way".

Almost nobody puts money in an investing account the way you suggest, of the ones that do, many squander it by ill advised purchases, and you are acting like its a guaranteed return... it's not. It's a valid scenario, as mine is.

You're life's work is being given to a bank, you're just building all kinds of rationalizations on how it's not. Your money goes to a bank in the form of interest. The bank's money is not coming into your pocket thru osmosis. It goes in one direction...

Not all duplexes are strewn with ghetto rats, though granted, duplexes are not exactly chic. My BIL's is in a modest neighborhood, but he's a rare bird at his age being willing to sacrifice a fancy apt in a hip part of town.

Lastly, I have not inherited any property yet, but I remember being a little kid in that sacrifice stage, and it wasn't all that bad living in a small apartment. I recall moving into a first house in like 2nd grade or something.
post #10324 of 11182
Quote:
Originally Posted by otc View Post

The nice thing about long term renting in other countries is that they do things like bring their own appliances when they move in, and because there is a culture of long term renting, there are more quality homes for rent and often a bit more leeway in customizing the home to fit your needs.

In America, renting (especially outside of big city centers) often gets you shitty contractor grade stoves in kind of sad buildings in less desirable locations.

This is true, my parents have one home that has been passed on from an embassy's staff to the one that takes over for like a decade, more than once they have come in and offered to change floors, paint colors and pay for it.

There is definitely a rental market for homes in better shape with quality appliances, etc that attract longer term renters. Unfortunately American renters tend to fuck up properties like nobody's business. My parents now collect 2 months rent as a deposit and they have taken large parts of it to repair the house.
post #10325 of 11182
What's so bad about giving your life's work to a bank?

Isn't that like...the sole reason for traditional banks to exist? You give them your money, they hold on to it, and if you need more money than you currently have to buy a house, they will loan it to you for a very low interest rate over an absurdly long time horizon?
post #10326 of 11182
In developed economies I think the US and Canada probably have the highest percentage of home ownership and might very well view home ownership in a different way that much of the rest of the developed world. No stats on that and completely based on my impressions and observations.
post #10327 of 11182
Quote:
Originally Posted by idfnl View Post


I don't know what your best course of action is, I'm simply presenting an alternative way to consider housing that doesn't follow this standard model that many seem to think is the "right way".

Almost nobody puts money in an investing account the way you suggest, of the ones that do, many squander it by ill advised purchases, and you are acting like its a guaranteed return... it's not. It's a valid scenario, as mine is.

You're life's work is being given to a bank, you're just building all kinds of rationalizations on how it's not. Your money goes to a bank in the form of interest. The bank's money is not coming into your pocket thru osmosis. It goes in one direction...

Not all duplexes are strewn with ghetto rats, though granted, duplexes are not exactly chic. My BIL's is in a modest neighborhood, but he's a rare bird at his age being willing to sacrifice a fancy apt in a hip part of town.

Lastly, I have not inherited any property yet, but I remember being a little kid in that sacrifice stage, and it wasn't all that bad living in a small apartment. I recall moving into a first house in like 2nd grade or something.


I have never lived in a fancy apartment in a hip part of town, and I looked at duplexes.  The ones I felt comfortable paying for were not going to be sound investments.  The ones like you describe were twice as much (and the bank would have happily given me a loan).  My wife and I were pre-approved for a loan at almost twice what we bought.

 

I guess the difference between you and me is that I don't care if the bank makes money off of me.  So what?  They provide a valuable service, and you keep going back to this emotional "your life's work is being given to a bank" when the interest I wind up paying over 30 years is probably less than I'll pay in taxes this year alone, so it isn't the bank my life's work is going toward.

 

At the end of the day, I don't look at my house as an investment to make money on.  I look at it as a place to live, and so I make decisions that balance my budget, my enjoyment of it, and to a small extent will it be worth anything when I try to sell.
 

post #10328 of 11182

So just to be clear though, you're saying spending $150k over 30 years to buy a $200k asset which roughly keeps up with inflation is a bad thing (it may be up or down 10-15% depending on market timing)?

post #10329 of 11182
Quote:
Originally Posted by brokencycle View Post

So just to be clear though, you're saying spending $150k over 30 years to buy a $200k asset which roughly keeps up with inflation is a bad thing (it may be up or down 10-15% depending on market timing)?
So buy when the market is at the bottom and sell at the top. Duh.
post #10330 of 11182
I can't see where renting and saving (plus investing) offers any great advantage, the interest rate is currently 3%, housing prices are rising generally speaking and so if housing is rising at the same rate as the interest rate then you're offering yourself a disadvantage by then paying for rent while saving, assuming also that renting is actually cheaper when in reality it is usually not.

You'd be asking a lot of your investments to rise at a rate which covers your rental expenses and beats the housing market.

Living with your parents is cheaper, but not always a viable solution when people like to do things like say....get married and have kids....or have a job in a place that isn't where your parents live.

This reminds me of when I was a teenager and did not want a credit card because I disliked the idea of credit card companies, I say the idea because I had no experience to speak from at that point. That eventually came to be an issue because modern day society runs on credit, and so I had to join the ranks, get a credit card and build credit. Came in handy years late when it came time to get a house.
post #10331 of 11182
Quote:
Originally Posted by Piobaire View Post

In developed economies I think the US and Canada probably have the highest percentage of home ownership

HO= 50% in the US and 60% in Canada, IIRC.
post #10332 of 11182
I did not RC. Lol. That's mortgage-free of all home owners. 70ish% of HHs in both countries "own".
post #10333 of 11182
Lighten up on the acronyms.
post #10334 of 11182
Wilco.
post #10335 of 11182
Looks like people are starting to price in the $19B euro back tax bill for AAPL.
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