If you can't rent and save, something is wrong with your rent, or your income.
Not necessarily. I have a tough time because of the housing and rental market in the DC area, and I make a good income. If I had to buy a house on my own, I'd never be able to save enough to come up with a decent downpayment.
Sometimes it feels like I can't even save enough for my retirement, and I don't have a hellacious amount of expenses.
Should people bank the $150K they may spend on their education rather than borrow it to end up paying interest for the next 20 years, because they'll get a better rate of return? They won't be able to make the $150K if they don't have the education. It's a vicious cycle.
So-called consumer debt can get out of hand, sure.
But access to credit is one of the bedrock mechanisms by which people are able to improve their economic standing. G.I. Bill credit in the middle of the last century was a huge driver of the growth of the middle class.
that Reza Aslan is one cutehead religious scholar.
He really is. And smart, too.
and last week's comp check said the house is now worth $700k. He's made $250K in less than 2 years.
He hasn't made a dime. He has comp check in hand that will not buy a cup of coffee.
What are the real dollars he has spent on interest?
He hasn't made a dime. He has comp check in hand that will not buy a cup of coffee.
If he sells the house tomorrow, he's got it in hand. Of course he won't have a house, but he'll have $250K.
If he had invested it, all he has is a piece of paper in hand that doesn't buy him a cup of coffee either.
What are the real dollars he has spent on interest?
Unknown. I only know the basics of his program. I do know that he has an interest-only loan, which allows him to deduct 100% of his mortgage payment off of his taxes.
access to credit is one of the bedrock mechanisms by which people are able to improve their economic standing
Completely down with this statement.
Credit does not suck. Using it to meet basic needs does.
Using it to meet basic needs does.
Then for what the hell are you supposed to use credit? Purchasing a house improves your economic standing.
I'll lay the "if he sells for ..." thing off to one side, for a moment.
Anyone want to guess whether or not the bank made money?
From whom?
What's a basic need, though? Using credit to buy groceries - generally, yeah, bad idea. Using it to buy a car - not necessarily the wisest way to go, but the amount of the hit you take is something that most people can swallow. Real estate? That's a very different calculation.
Mind, the Economist was running the numbers and finding recently that in
certain specific urban areas,
house prices have gotten so inflated that you actually may come out ahead by renting*. (I'd copy the tables from the article here, but I've forgotten my economist.com log in.) But that abberation doesn't change the fundamental rationale for 99% of the world. And the affected areas won't be able to keep going that route for much longer anyway.
*Taking into account fees, interest, property taxes, etc., but also tax deductions and resale value. Pretty shocking, really.
If you can't rent and save, something is wrong with your rent, or your income.
I'm sorry, sa-- sa-- I do not recognize this word you are using.
In a related note, my mother is buying her very first house. She's able to do this because she just got married, and her husband has some money.
