3 ms·

>not buying a house How does this help with luck, exactly?

itsnotlupus 9y ago
Probably mobility, hence increased ability to seize opportunities as they present.
nvusuvu 9y ago
Being able to seize opportunities (that require relocation) when the chance comes, perhaps? A house can become a boat anchor in those instances.
soulnothing 9y ago
I bought a house and moved out several months after purchasing it for health reasons. The house was an anchor, that I also feel held me back. I had to take a number of jobs with higher pay, that weren't beneficial to my career. Almost every decision was can I pay for this house as well. Outside of my special use case. It's an anchor point in your life. I like this job but it's further away from my house. I like this job but it's in another city. Etc.
- myth_drannon 9y ago
  In another universe you bought a house in an area that had a housing bubble and the price appreciated by 100% in a couple of years. You sold your house and retired in Mexico working on fun side projects.
gnicholas 9y ago
Not buying a house may decrease mobility for some, especially single people. But folks who have spouses and/or kids tend to be more anchored to the community regardless of whether they rent. They have jobs and schools and friends that are hard to move away from. Also, buying a house can be an opportunity itself. Although the new tax law makes it somewhat less tax-favored as an investment, it still offers the ability to escape capital gains taxation on up to $500k (married) of gains. There are other federal and state benefits that can make the overall purchase decision attractive. So for some folks, yes a house can be an anchor. For other folks, they're already pretty much anchored, and the tax benefits can outweigh the downsides of incremental anchoring. Also, you can't get evicted...
- joncrane 9y ago
  > buying a house can be an opportunity itself. Although the new tax law makes it somewhat less tax-favored as an investment, it still offers the ability to escape capital gains taxation This is what I was thinking. There's nothing stopping a person from moving and keeping the house and renting it out, often at a profit over mortgate+fees+repairs+etc.
alexpetralia 9y ago
You lose optionality when you commit your capital to an illiquid investment. That is, you no longer have the option to spend money on things which may have a higher ROI. Any type of commitment loses optionality. Update: this is a great podcast episode on using optionality to your advantage (http://investorfieldguide.com/wolfe/ http://investorfieldguide.com/wolfe/)

Probably mobility, hence increased ability to seize opportunities as they present.

Being able to seize opportunities (that require relocation) when the chance comes, perhaps? A house can become a boat anchor in those instances.

soulnothing 9y ago

I bought a house and moved out several months after purchasing it for health reasons. The house was an anchor, that I also feel held me back. I had to take a number of jobs with higher pay, that weren't beneficial to my career. Almost every decision was can I pay for this house as well. Outside of my special use case. It's an anchor point in your life. I like this job but it's further away from my house. I like this job but it's in another city. Etc.

myth_drannon 9y ago
In another universe you bought a house in an area that had a housing bubble and the price appreciated by 100% in a couple of years. You sold your house and retired in Mexico working on fun side projects.

gnicholas 9y ago

Not buying a house may decrease mobility for some, especially single people. But folks who have spouses and/or kids tend to be more anchored to the community regardless of whether they rent. They have jobs and schools and friends that are hard to move away from. Also, buying a house can be an opportunity itself. Although the new tax law makes it somewhat less tax-favored as an investment, it still offers the ability to escape capital gains taxation on up to $500k (married) of gains. There are other federal and state benefits that can make the overall purchase decision attractive. So for some folks, yes a house can be an anchor. For other folks, they're already pretty much anchored, and the tax benefits can outweigh the downsides of incremental anchoring. Also, you can't get evicted...

joncrane 9y ago
> buying a house can be an opportunity itself. Although the new tax law makes it somewhat less tax-favored as an investment, it still offers the ability to escape capital gains taxation This is what I was thinking. There's nothing stopping a person from moving and keeping the house and renting it out, often at a profit over mortgate+fees+repairs+etc.

alexpetralia 9y ago

You lose optionality when you commit your capital to an illiquid investment. That is, you no longer have the option to spend money on things which may have a higher ROI. Any type of commitment loses optionality. Update: this is a great podcast episode on using optionality to your advantage (http://investorfieldguide.com/wolfe/ http://investorfieldguide.com/wolfe/)