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I can certainly concede that achieving "ramen profitability" while living off savings is substantially less exciting while trying to pay down a mortgage and sav

I can certainly concede that achieving "ramen profitability" while living off savings is substantially less exciting while trying to pay down a mortgage and save up for one's childrens' college tuition.

sanderjd 9y ago
> while trying to pay down a mortgage I don't really get this. I just recently bought a house. Paying down my mortgage is just a bit more expensive than renting my apartment was. Leases are a year long, I think I could sell my house within that period of time, and we wouldn't need to ask our landlord's permission. Why is a mortgage strictly worse for living off of savings?
- jstandard 9y ago
  > Paying down my mortgage is just a bit more expensive than renting my apartment was. Unless you already have a substantial nest egg or took out an expensive mortgage, your life savings were substantially reduced by the down payment. In addition to a more expensive monthly payment there are property taxes, maintenance costs ($ and time), HOA fees, and other burdens depending on your region and property type.
- tytytytytytytyt 9y ago
  What do you do if the neighborhood or market changes and you really can't sell your house after a year? > Paying down my mortgage is just a bit more expensive than renting my apartment was. That might depend on where you are and other factors. > Why is a mortgage strictly worse for living off of savings? Maybe it's not and people are just hedging their bets?
- Swizec 9y ago
  > Why is a mortgage strictly worse for living off of savings? It’s not strictly worse but I assume it feels like a bigger commitment with more disastrous consequences should anything go wrong? Foreclose on your house, your biggest asset is gone. That thing you worked for for so long. Get kicked out of rented place. Eh, wasn’t yours anyway. Find smaller one or in a worse location, which you can afford. Either way in my case buying is strictly worse because I can’t afford the down payment so there’s really just one option. Well, one comfortable option. I could always go homeless I guess. Would save me a lot per month ...
ghufran_syed 9y ago
Any reason why the kids can’t pay for their own tuition? Isn’t that what government student loans are for?
- jknoepfler 9y ago
  no, there isn't. I personally paid my way with loans and work, but I wouldn't mind paying a portion of a public university education for my children. Remember you generally end up cosigning loans, so if your kid flakes out, you're on the line anyway.
- TeMPOraL 9y ago
  Isn't saving for kids' college an American tradition? Also, it seems that in the US, student loans are a pretty heavy burden to take on.
- thebradbain 9y ago
  Federal Direct Student Loans, available to undergraduate students at a relatively low fixed rate (but still higher than say, a decent mortgage on a house), only allow a student to take out about $6000/year. But as college tuition skyrockets (mine is $70k/year, and increasing, and I have a brother at an equivalently priced institution too!), that wont cut it. The rest must either come from personal/family finances, be taken out from the federal government in solely the parent’s name (Federal Direct Plus Parent Loan, with a higher interest rate than direct student loans) or, if that’s not an option, a private lender (usually with an even higher rate). With circumstances like they are and pitiful stopgaps like these, it’s no wonder my parents waited so long to have children so that they could afford to send them to school. Unfortunately, that’s not an option for most families. The student loan crisis in America really is terrifying.
  - CalRobert 9y ago
    This is a big part of why my wife and I emigrated, but that option is pretty drastic. More generally, perhaps we'll finally see people question if college offers the best return on an investment of 100 grand+ and 4+ years of life.
  - 9y ago

sanderjd 9y ago

> while trying to pay down a mortgage I don't really get this. I just recently bought a house. Paying down my mortgage is just a bit more expensive than renting my apartment was. Leases are a year long, I think I could sell my house within that period of time, and we wouldn't need to ask our landlord's permission. Why is a mortgage strictly worse for living off of savings?

jstandard 9y ago
> Paying down my mortgage is just a bit more expensive than renting my apartment was. Unless you already have a substantial nest egg or took out an expensive mortgage, your life savings were substantially reduced by the down payment. In addition to a more expensive monthly payment there are property taxes, maintenance costs ($ and time), HOA fees, and other burdens depending on your region and property type.
tytytytytytytyt 9y ago
What do you do if the neighborhood or market changes and you really can't sell your house after a year? > Paying down my mortgage is just a bit more expensive than renting my apartment was. That might depend on where you are and other factors. > Why is a mortgage strictly worse for living off of savings? Maybe it's not and people are just hedging their bets?
Swizec 9y ago
> Why is a mortgage strictly worse for living off of savings? It’s not strictly worse but I assume it feels like a bigger commitment with more disastrous consequences should anything go wrong? Foreclose on your house, your biggest asset is gone. That thing you worked for for so long. Get kicked out of rented place. Eh, wasn’t yours anyway. Find smaller one or in a worse location, which you can afford. Either way in my case buying is strictly worse because I can’t afford the down payment so there’s really just one option. Well, one comfortable option. I could always go homeless I guess. Would save me a lot per month ...

ghufran_syed 9y ago

Any reason why the kids can’t pay for their own tuition? Isn’t that what government student loans are for?

jknoepfler 9y ago
no, there isn't. I personally paid my way with loans and work, but I wouldn't mind paying a portion of a public university education for my children. Remember you generally end up cosigning loans, so if your kid flakes out, you're on the line anyway.
TeMPOraL 9y ago
Isn't saving for kids' college an American tradition? Also, it seems that in the US, student loans are a pretty heavy burden to take on.
thebradbain 9y ago
Federal Direct Student Loans, available to undergraduate students at a relatively low fixed rate (but still higher than say, a decent mortgage on a house), only allow a student to take out about $6000/year. But as college tuition skyrockets (mine is $70k/year, and increasing, and I have a brother at an equivalently priced institution too!), that wont cut it. The rest must either come from personal/family finances, be taken out from the federal government in solely the parent’s name (Federal Direct Plus Parent Loan, with a higher interest rate than direct student loans) or, if that’s not an option, a private lender (usually with an even higher rate). With circumstances like they are and pitiful stopgaps like these, it’s no wonder my parents waited so long to have children so that they could afford to send them to school. Unfortunately, that’s not an option for most families. The student loan crisis in America really is terrifying.
- CalRobert 9y ago
  This is a big part of why my wife and I emigrated, but that option is pretty drastic. More generally, perhaps we'll finally see people question if college offers the best return on an investment of 100 grand+ and 4+ years of life.
- 9y ago