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Here are the 5 "myths" and his advice to save you a click through: 1. It's important to get a job and start saving for retirement the minute you're out of coll

Here are the 5 "myths" and his advice to save you a click through: 1. It's important to get a job and start saving for retirement the minute you're out of college. >It's more important to spend time thinking about what you want to do (surfing in South America?) than to start working and paying off students loans immediately. 2. Getting a credit card right out of school is dangerous. >Get a credit card with a small limit ($500) and set it on autopay. 3. The American dream involves buying a house. >Rent rather than buy and don't get attached to anything while you're young. 4. Once you graduate, immediately try to build up a cash emergency fund. >Use 401k as an emergency fund, even if you have to take the tax hit. Long-term benefits outweigh short term risks of doing this when you're young. 5. Investing is difficult, and stocks are sexy. >Avoid managers/fees and just put money into an index fund. Nothing too radical.

Someone1234 11y ago
Rent Vs. buy is the most "radical." I think it really boils down to what the relative costs are. There are many renters who pay as much or more as someone with a mortgage, and the person with the mortgage is obviously building up capital within that property (value Vs. current mortgage).
- ghaff 11y ago
  Most sage advice about buying vs. renting boils down to "run the numbers but there are a lot of tradeoffs, many of them non-financial." The "Don't buy" sentence is deliberately provocative I think. The rest of what he says boils down to don't buy a house because you think you're supposed to. Which sounds like very sensible advice to me. I certainly held off buying for a fairly long time because I didn't want to be locked down in that way. In retrospect I might have done things differently but hindsight is 20-20 and all that.
  - byoung2 11y ago
    I certainly held off buying for a fairly long time because I didn't want to be locked down in that way. In retrospect I might have done things differently but hindsight is 20-20 and all that. In my case foresight was 20-20 since I bought in 2012 and I knew that when interest rates on a 30 year fixed were the lowest they had been in 30 years that this was the time to lock in a mortgage. At the same time, housing prices in my city were the lowest they had been in 15 years so it made sense to buy. I knew if we didn't make a move then that we'd regret it once interest rates and prices started to rise.
ThrustVectoring 11y ago
I'd add to number 4 that being able to borrow short-term cash at a reasonable rate can be a better choice. If you borrow $10k at 1%/month and pay it off at $1k/month, the total interest is something like $550. If you need that much cash once every 5 years, then that's about a 1% rate of return on holding $10k worth of emergency cash in terms of saved interest fees. That said, this is only really a good option if you've got a healthy income level and strong saving habits. If you don't, you won't be able to borrow at a reasonable rate (and you won't be able to pay it back quickly).

Someone1234 11y ago

Rent Vs. buy is the most "radical." I think it really boils down to what the relative costs are. There are many renters who pay as much or more as someone with a mortgage, and the person with the mortgage is obviously building up capital within that property (value Vs. current mortgage).

ghaff 11y ago
Most sage advice about buying vs. renting boils down to "run the numbers but there are a lot of tradeoffs, many of them non-financial." The "Don't buy" sentence is deliberately provocative I think. The rest of what he says boils down to don't buy a house because you think you're supposed to. Which sounds like very sensible advice to me. I certainly held off buying for a fairly long time because I didn't want to be locked down in that way. In retrospect I might have done things differently but hindsight is 20-20 and all that.
- byoung2 11y ago
  I certainly held off buying for a fairly long time because I didn't want to be locked down in that way. In retrospect I might have done things differently but hindsight is 20-20 and all that. In my case foresight was 20-20 since I bought in 2012 and I knew that when interest rates on a 30 year fixed were the lowest they had been in 30 years that this was the time to lock in a mortgage. At the same time, housing prices in my city were the lowest they had been in 15 years so it made sense to buy. I knew if we didn't make a move then that we'd regret it once interest rates and prices started to rise.

ThrustVectoring 11y ago

I'd add to number 4 that being able to borrow short-term cash at a reasonable rate can be a better choice. If you borrow $10k at 1%/month and pay it off at $1k/month, the total interest is something like $550. If you need that much cash once every 5 years, then that's about a 1% rate of return on holding $10k worth of emergency cash in terms of saved interest fees. That said, this is only really a good option if you've got a healthy income level and strong saving habits. If you don't, you won't be able to borrow at a reasonable rate (and you won't be able to pay it back quickly).