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This article doesn’t consider at all the cost of rental. I have no idea in US but in London renting an house is quite more expensive than mortgaging one. And yo

This article doesn’t consider at all the cost of rental. I have no idea in US but in London renting an house is quite more expensive than mortgaging one. And you have to consider the non-insignificant problem of rental going up 5-10%/year while mortgage interest are going quite quickly to zero if you pay the mortgage at the same rate of the rent. If I listened to this “genius” instead of being almost the sole owner of an house doubled in price in 7 years I would have spent much more than 100k on rental in the same period without having nothing at all at the end. I can’t really understand what this “journalists” gain in deceiving people in this way..

aphextron 9y ago
And so you respond with purely anecdotal evidence, based on your special case of buying a home at precisely the right time, in the most overheated real estate market on earth (London). Look for instance at a random home in Phoenix, AZ [0]. If you had bought at the very bottom of the housing crash in '09, and sold today, that's about 50% returns before any of the associated costs with home ownership and mortgages. Compare that to ~300% return over the same period from just dumping your money in the S&P 500 [1] [0] https://www.zillow.com/homes/for_sale/Phoenix-AZ/pmf,pf_pt/71601764_zpid/40326_rid/globalrelevanceex_sort/33.994042,-111.632767,33.216286,-112.616044_rect/9_zm/ https://www.zillow.com/homes/for_sale/Phoenix-AZ/pmf,pf_pt/7... [1] https://www.morningstar.com/etfs/arcx/vti/quote.html https://www.morningstar.com/etfs/arcx/vti/quote.html
- tigershark 9y ago
  Your 300% return sadly doesn’t include the cost of renting. If buying SPX would give me free housing I would be the first buyer, believe me. But unless you are born very, very, privileged you need to buy an house or to pay a rental, unless you want to live with your parents, and your wife is happy to do so. For me, as I repeat, it was a no-brainer. If you want to live for the foreseeable future with your parents then obviously better to put money on some index rather than buying an house. If you have a family I’m really not sure that it would be better even in Phoenix or in Castrovillari or wherever in the world you want.
  - kspaans 9y ago
    The article does make the unstated assumption that you're able to 1) rent for cheaper than the cost of a mortgage + extras, and more importantly 2) invest the difference. If your individual circumstances don't allow that and you're able to afford the necessary downpayment, the calculation is pretty easy to make, yes.
- 0x445442 9y ago
  Apples and oranges comparison because you still need a place to live. The true investment value of a home is the residual you receive every month after the home is paid off in the form of no rent. Sure you still need to pay for property tax and up keep but the difference between that and the rent you'd need to pay to live in a similar dwelling is the residual you collect. A better comparison would be how you choose to invest the disposable income you have available after your housing needs are met.
sokoloff 9y ago
> I can’t really understand what this “journalists” gain in deceiving people in this way.. The author is Ken Fisher of Fisher Investments. He stands to benefit from fees on assets under management if you put your money under his management instead of tying it up in real estate. Even if you don’t put it under his management, if it’s in equities propping up that market, it helps his clients (and therefore his firm).
- tigershark 9y ago
  Ah ok, I didn’t know. Thanks, this explains a lot of things. I don’t think he ever had to pay for his house if these are his ideas..

aphextron 9y ago

And so you respond with purely anecdotal evidence, based on your special case of buying a home at precisely the right time, in the most overheated real estate market on earth (London). Look for instance at a random home in Phoenix, AZ [0]. If you had bought at the very bottom of the housing crash in '09, and sold today, that's about 50% returns before any of the associated costs with home ownership and mortgages. Compare that to ~300% return over the same period from just dumping your money in the S&P 500 [1] [0] https://www.zillow.com/homes/for_sale/Phoenix-AZ/pmf,pf_pt/71601764_zpid/40326_rid/globalrelevanceex_sort/33.994042,-111.632767,33.216286,-112.616044_rect/9_zm/ https://www.zillow.com/homes/for_sale/Phoenix-AZ/pmf,pf_pt/7... [1] https://www.morningstar.com/etfs/arcx/vti/quote.html https://www.morningstar.com/etfs/arcx/vti/quote.html

tigershark 9y ago
Your 300% return sadly doesn’t include the cost of renting. If buying SPX would give me free housing I would be the first buyer, believe me. But unless you are born very, very, privileged you need to buy an house or to pay a rental, unless you want to live with your parents, and your wife is happy to do so. For me, as I repeat, it was a no-brainer. If you want to live for the foreseeable future with your parents then obviously better to put money on some index rather than buying an house. If you have a family I’m really not sure that it would be better even in Phoenix or in Castrovillari or wherever in the world you want.
- kspaans 9y ago
  The article does make the unstated assumption that you're able to 1) rent for cheaper than the cost of a mortgage + extras, and more importantly 2) invest the difference. If your individual circumstances don't allow that and you're able to afford the necessary downpayment, the calculation is pretty easy to make, yes.
0x445442 9y ago
Apples and oranges comparison because you still need a place to live. The true investment value of a home is the residual you receive every month after the home is paid off in the form of no rent. Sure you still need to pay for property tax and up keep but the difference between that and the rent you'd need to pay to live in a similar dwelling is the residual you collect. A better comparison would be how you choose to invest the disposable income you have available after your housing needs are met.

sokoloff 9y ago

> I can’t really understand what this “journalists” gain in deceiving people in this way.. The author is Ken Fisher of Fisher Investments. He stands to benefit from fees on assets under management if you put your money under his management instead of tying it up in real estate. Even if you don’t put it under his management, if it’s in equities propping up that market, it helps his clients (and therefore his firm).

tigershark 9y ago
Ah ok, I didn’t know. Thanks, this explains a lot of things. I don’t think he ever had to pay for his house if these are his ideas..