4 ms·

>1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles. Even if all of them are unemployed, all o

>1. A paid off home is a social safety net against homelessness for an entire family and many of their social circles. Even if all of them are unemployed, all of them have a roof over their heads. Until you can't afford to pay the taxes, utilities, insurance, and maintenance. My grandma bought her house outright with my grandpa's life insurance money. No mortgage ever. It was a terrible choice because she didn't have the money or wherewithal for maintenance or utilities. 30 years later the house was literary falling apart. As you can imagine, the utility bills for a house with gaping holes in the roof were astronomical. It was a positive feedback loop. She lived with massive anxiety about shit getting old and breaking. We all really hoped her house would stay upright until she died. It did, thankfully. She would have lived a much better quality of life in an apartment. >2. A paid-off home frees up cash flow. It allows the owner to divert his earnings into other activities or investments or reduce the amount he has to earn monthly. Renting frees up cash flow sooner thus allowing interest to compound much more. > Real estate can be borrowed against. Try that with stocks. If you are an entrepreneur, your home is likely the asset you will use to acquire bank financing for your business. You can borrow against your 401(k). Then there's the people who borrow against their 401(k) to buy a home, yes, those exist... I personally know some. Anyways, I own a home, I'm not anti-home ownership. I just can't stand the myths about home ownership.

paganel 10y ago
> Until you can't afford to pay the taxes, utilities, insurance, and maintenance The utilities it's what gets to you first. My parents used to be middle-class people in the late-1990s Eastern Europe until they both lost their jobs when the one big steel-factory in my home-town got closed down. In a matter of a just a couple of years they had to sell our family car and our city apartment (where we were all living), because utility bills have the nasty habit of coming in your mail-box even though you're out of a job. We only managed to got through all this because my parents still had a half-finished house in the countryside which has been their primary residence for more than 15 years now (and is still unfinished) while I got to go to college and managed to earn some financial assistance from my school for the first couple of years (and then found a job during school). I know that the usual HN user comes from an Western country and has never had to deal with very big societal changes that can see political systems disappear over night, high-double-digit or triple-digit inflation or real-estate values collapsing to 5 or 10% of their initial value, but these will eventually happen in there, too.
- pjlegato 10y ago
  > Western country... very big societal changes... It's already happened. Contrary to popular belief, Western countries are not uniformly rich and successful places where everyone drives a Ferrari and owns three houses. This stereotype is really annoying to those of us who suffered through the industrial collapse and saw the society of whole regions destroyed (larger than most eastern European countries.) * https://en.wikipedia.org/wiki/Rust_Belt https://en.wikipedia.org/wiki/Rust_Belt * https://en.wikipedia.org/wiki/Deindustrialisation_by_country#United_States https://en.wikipedia.org/wiki/Deindustrialisation_by_country... * https://en.wikipedia.org/wiki/Stagflation https://en.wikipedia.org/wiki/Stagflation * https://en.wikipedia.org/wiki/History_of_the_United_States_(1964%E2%80%9380)#.22Stagflation.22 https://en.wikipedia.org/wiki/History_of_the_United_States_(... * etc.
  - paganel 10y ago
    I know about the Rust Belt meltdown and also about what happened to Northern England and Scotland during the Thatcher years, but trust me when I'm telling you that high inflation and the whole damn country (nor merely a region) being on the brink of collapse feels at least a hundred times worse.
    - pjlegato 10y ago
      Yes, I'm sure the collapse of the state was quite terrible. Nobody is trying to diminish the horror of that experience. The point is that "westerners," even HN readers, are not all a bunch of naive rich people who have never experienced and cannot understand large scale social change.
pvdebbe 10y ago
I was happily living in an owned home, paying off the mortgage (with very low interests mind you!) but I ended off selling it, and staying resident as a tenant for the buyer! Reasons aside, while my monthly expenses have increased a bit (not terribly much) I've been much happier and care-free now. The hundreds that I would put away for inevitable fixups and maintenance, I can now put in stocks, index funds. I personally can't hold the hammer the right way in my hand so it's been costly. It's not customary in Finland to take second mortgages against house so having money in stocks is vastly more easily liquidable as well.

paganel 10y ago

> Until you can't afford to pay the taxes, utilities, insurance, and maintenance The utilities it's what gets to you first. My parents used to be middle-class people in the late-1990s Eastern Europe until they both lost their jobs when the one big steel-factory in my home-town got closed down. In a matter of a just a couple of years they had to sell our family car and our city apartment (where we were all living), because utility bills have the nasty habit of coming in your mail-box even though you're out of a job. We only managed to got through all this because my parents still had a half-finished house in the countryside which has been their primary residence for more than 15 years now (and is still unfinished) while I got to go to college and managed to earn some financial assistance from my school for the first couple of years (and then found a job during school). I know that the usual HN user comes from an Western country and has never had to deal with very big societal changes that can see political systems disappear over night, high-double-digit or triple-digit inflation or real-estate values collapsing to 5 or 10% of their initial value, but these will eventually happen in there, too.

pjlegato 10y ago
> Western country... very big societal changes... It's already happened. Contrary to popular belief, Western countries are not uniformly rich and successful places where everyone drives a Ferrari and owns three houses. This stereotype is really annoying to those of us who suffered through the industrial collapse and saw the society of whole regions destroyed (larger than most eastern European countries.) * https://en.wikipedia.org/wiki/Rust_Belt https://en.wikipedia.org/wiki/Rust_Belt * https://en.wikipedia.org/wiki/Deindustrialisation_by_country#United_States https://en.wikipedia.org/wiki/Deindustrialisation_by_country... * https://en.wikipedia.org/wiki/Stagflation https://en.wikipedia.org/wiki/Stagflation * https://en.wikipedia.org/wiki/History_of_the_United_States_(1964%E2%80%9380)#.22Stagflation.22 https://en.wikipedia.org/wiki/History_of_the_United_States_(... * etc.
- paganel 10y ago
  I know about the Rust Belt meltdown and also about what happened to Northern England and Scotland during the Thatcher years, but trust me when I'm telling you that high inflation and the whole damn country (nor merely a region) being on the brink of collapse feels at least a hundred times worse.
  - pjlegato 10y ago
    Yes, I'm sure the collapse of the state was quite terrible. Nobody is trying to diminish the horror of that experience. The point is that "westerners," even HN readers, are not all a bunch of naive rich people who have never experienced and cannot understand large scale social change.

pvdebbe 10y ago

I was happily living in an owned home, paying off the mortgage (with very low interests mind you!) but I ended off selling it, and staying resident as a tenant for the buyer! Reasons aside, while my monthly expenses have increased a bit (not terribly much) I've been much happier and care-free now. The hundreds that I would put away for inevitable fixups and maintenance, I can now put in stocks, index funds. I personally can't hold the hammer the right way in my hand so it's been costly. It's not customary in Finland to take second mortgages against house so having money in stocks is vastly more easily liquidable as well.