6 ms·

Some of the smarter among us own homes, because they can delay gratification, and save. That same saving and delayed gratification could be used to put money i

Some of the smarter among us own homes, because they can delay gratification, and save. That same saving and delayed gratification could be used to put money into a business that benefits others, instead of a home, which benefits basically only them and their close family. Not only do they misallocate that capital, while being the intelligent class that can actually run a successful business, or service, which benefits others. That's just bad thing 1. Bad thing 2 is that they cop an attitude, and affect legislation which causes their "investment" in owning a home to rise in price. Executed by preventing competition (zoning laws) and being more costly for everyone else to buy, because they demand and fight for it. *Homestead tax exemption, etc. Their choice to own a home makes them want others to have a harder time to get what they themselves have, through the vehicle of higher prices, and tax benefits to the capital class. Thus intelligent, useful people, become cockblockers. Houses must become more and more unaffordable for everyone else, because they happen to own one. :( How selfish. Sadly, the idea that high house prices screw over more people than they benenfit is undermarketed, and its impossible to teach a man a thing he profits by not understanding... We end up in a world where no young person can afford to own the home they live in. And if you try to build some new supply, the local captured regulatory agency, vetos you. The zoning board of people who already have nice houses, cock blocks you. Not in my backyard! Stop cock blocking. Stop expecting your future to be paid for by your non productive, benefits only you "asset." Go forth and benefit others at scale if you desire riches.

summarite 10y ago
I'm not sure I can grasp why you're so negative about house ownership and you seem to be rather in some weird ideological cage that doesn't let you see the whole picture. Firstly you have something akin to the broken window fallacy going on: if I buy a house someone else (often a company) gets that cash and can invest it. The money does not disappear, and if I had taken the same loan (which I likely wouldn't have received without the house title as guarantee that the bank gets its money back) to start a company or invest in stocks there's a much higher probability of failure than that my house disappears. So it's a thrifty investment. In particular as secondly, house ownership means I'll save on rent, rather than to pump money into someone else's pocket I'm accumulating the value. It's a simple calculation that this is in most cases in my benefit if I expect to be in the same spot for 5+ years. Real house value could even decrease over time, the rental costs I'm saving could still make it a good investment. Thirdly, first house owners are unlikely to try to influence policy just to increase house value. Not sure how you can have such an idea, for most owners this would be unlikely to be worth the time& effort required just to increase house value 1℅ or so. But you can be sure they will fight for their quality of life (think parks, no planes, etc). That coincides with house value but for most average citizens the only (conscious/driving) reason to affect local policy is quality of life. And lastly I think you're somehow too far from reality if you argue it is in an individual's interest to serve the wider economy. I'm not going to use my money just to benefit an imaginary wider economy - what is the benefit then for me? Why be rich if life sucks (and why risk all my money just to start a company if I have already a good income & life?) Do I live just to nudge Gdp up by 0.00001℅ over my lifetime? Or do I want a healthy life, a garden for my kids to play, etc. Buying a house is a very rational decision and I"m not sure what you can see as selfish (in particular considering point 1). Your argument really is somewhat absurd and I find it hard to believe you make all your life decisions or buying decisions with such an approach (leasing your laptop? Living in a polygamous commune as keeping an attractive partner to yourself would keep potential value from the rest of humanity?).
- paulpauper 10y ago
  agree. home ownership is about creating wealth for yourself instead of making the landlord rich. There are many millennials who are living with their parents instead of pissing away money every month for rent, and then using the saved money from their job to buy a home, achieving financial independence. With renting, you're never are able to achieve independence, since you're constantly draining money, and the rate of rent, especially since 2011, has far, far exceed inflation.
- vasilipupkin 10y ago
  Are you really saving by owning a home vs renting? Your equity could be invested elsewhere plus you are spending money on maintenance, which you don't fully recoup when you sell. You are locking up equity in a non diversified asset. There are non financial benefits of home ownership, but I'm not sure it makes financial sense
  - paulpauper 10y ago
    over the long run (>5 years) the data suggests buying is better than renting
    - vasilipupkin 10y ago
      Which data? Do you have a link?
      - bane 10y ago
        here's the classic post on the topic http://assayviaessay.blogspot.com/2014/04/rent-or-buy.html http://assayviaessay.blogspot.com/2014/04/rent-or-buy.html
        vasilipupkin 10y ago
        I believe the calculations aren't quite correct. The return on the S&P is higher than the return on housing in a typical market. That's the whole point of the parent article. Consider a typical market like Chicago area. Prices still haven't recovered from the housing bust

summarite 10y ago

I'm not sure I can grasp why you're so negative about house ownership and you seem to be rather in some weird ideological cage that doesn't let you see the whole picture. Firstly you have something akin to the broken window fallacy going on: if I buy a house someone else (often a company) gets that cash and can invest it. The money does not disappear, and if I had taken the same loan (which I likely wouldn't have received without the house title as guarantee that the bank gets its money back) to start a company or invest in stocks there's a much higher probability of failure than that my house disappears. So it's a thrifty investment. In particular as secondly, house ownership means I'll save on rent, rather than to pump money into someone else's pocket I'm accumulating the value. It's a simple calculation that this is in most cases in my benefit if I expect to be in the same spot for 5+ years. Real house value could even decrease over time, the rental costs I'm saving could still make it a good investment. Thirdly, first house owners are unlikely to try to influence policy just to increase house value. Not sure how you can have such an idea, for most owners this would be unlikely to be worth the time& effort required just to increase house value 1℅ or so. But you can be sure they will fight for their quality of life (think parks, no planes, etc). That coincides with house value but for most average citizens the only (conscious/driving) reason to affect local policy is quality of life. And lastly I think you're somehow too far from reality if you argue it is in an individual's interest to serve the wider economy. I'm not going to use my money just to benefit an imaginary wider economy - what is the benefit then for me? Why be rich if life sucks (and why risk all my money just to start a company if I have already a good income & life?) Do I live just to nudge Gdp up by 0.00001℅ over my lifetime? Or do I want a healthy life, a garden for my kids to play, etc. Buying a house is a very rational decision and I"m not sure what you can see as selfish (in particular considering point 1). Your argument really is somewhat absurd and I find it hard to believe you make all your life decisions or buying decisions with such an approach (leasing your laptop? Living in a polygamous commune as keeping an attractive partner to yourself would keep potential value from the rest of humanity?).

paulpauper 10y ago
agree. home ownership is about creating wealth for yourself instead of making the landlord rich. There are many millennials who are living with their parents instead of pissing away money every month for rent, and then using the saved money from their job to buy a home, achieving financial independence. With renting, you're never are able to achieve independence, since you're constantly draining money, and the rate of rent, especially since 2011, has far, far exceed inflation.
vasilipupkin 10y ago
Are you really saving by owning a home vs renting? Your equity could be invested elsewhere plus you are spending money on maintenance, which you don't fully recoup when you sell. You are locking up equity in a non diversified asset. There are non financial benefits of home ownership, but I'm not sure it makes financial sense
- paulpauper 10y ago
  over the long run (>5 years) the data suggests buying is better than renting
  - vasilipupkin 10y ago
    Which data? Do you have a link?
    - bane 10y ago
      here's the classic post on the topic http://assayviaessay.blogspot.com/2014/04/rent-or-buy.html http://assayviaessay.blogspot.com/2014/04/rent-or-buy.html
      - vasilipupkin 10y ago
        I believe the calculations aren't quite correct. The return on the S&P is higher than the return on housing in a typical market. That's the whole point of the parent article. Consider a typical market like Chicago area. Prices still haven't recovered from the housing bust