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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 m

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.

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.