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> We have not had inflation for a long time, but I remember the Carter years where we had inflation and people who rented were in a world of hurt. Owners had no

> We have not had inflation for a long time, but I remember the Carter years where we had inflation and people who rented were in a world of hurt. Owners had no such problems. I could see how an owner with a mortgage benefits with unexpected inflation, but why our renters hurt? If their incomes rise with inflation, shouldn't it be neutral? > The 2008 crash hurt owners, but only if they had to sell. At least where we are, prices are more than fully recovered. You can't ignore opportunity costs. The question is how would an owner on a mortgage performed if instead they were renting, had lower payments, and directed additional savings into the stock market?

tomohawk 8y ago
What would you do if your rent went up 10% - 20% a year? Rents follow inflation. As for opportunity, there is immediate opportunity and deferred opportunity. You could chase the stock market now, and have no gains for 10 years, or great gains. If you buy a house and pay it off, you guarantee lower expenses going forward. If you're the grasshopper, then by all means rent. If you're the ant, then buying probably makes more sense.
- usaar333 8y ago
  > What would you do if your rent went up 10% - 20% a year? Rents follow inflation. So does my salary expectations. Not getting the ant/grasshopper metaphor. The trade-off is solely a function of risk ability & willingness (higher risk tolerance pushes toward renting more), not hard work/lazing. In certain markets buying looks bad if you have high enough risk tolerance to handle stocks: https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-the-bay-area-right-now-9eff37da8d6 https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-t...
  - tomohawk 8y ago
    In inflationary times, your rent will likely outstrip any salary increase. I suppose if you work for the federal gov't or something you might get cola, but I wouldn't count on it. The Carter years were hard times. I didn't mean the metaphor in an negative way. The grasshopper likes the lifestyle of pay as you go. The ant worries more about a possible winter coming.

tomohawk 8y ago

What would you do if your rent went up 10% - 20% a year? Rents follow inflation. As for opportunity, there is immediate opportunity and deferred opportunity. You could chase the stock market now, and have no gains for 10 years, or great gains. If you buy a house and pay it off, you guarantee lower expenses going forward. If you're the grasshopper, then by all means rent. If you're the ant, then buying probably makes more sense.

usaar333 8y ago
> What would you do if your rent went up 10% - 20% a year? Rents follow inflation. So does my salary expectations. Not getting the ant/grasshopper metaphor. The trade-off is solely a function of risk ability & willingness (higher risk tolerance pushes toward renting more), not hard work/lazing. In certain markets buying looks bad if you have high enough risk tolerance to handle stocks: https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-the-bay-area-right-now-9eff37da8d6 https://medium.com/@usaar33/why-you-shouldnt-buy-a-home-in-t...
- tomohawk 8y ago
  In inflationary times, your rent will likely outstrip any salary increase. I suppose if you work for the federal gov't or something you might get cola, but I wouldn't count on it. The Carter years were hard times. I didn't mean the metaphor in an negative way. The grasshopper likes the lifestyle of pay as you go. The ant worries more about a possible winter coming.