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I was similar shouting, especially at the end. My point: > Growing up, Mr. Young says, he was taught to work hard to get a nice house and a reliable vehicle. N

I was similar shouting, especially at the end. My point: > Growing up, Mr. Young says, he was taught to work hard to get a nice house and a reliable vehicle. Now he realizes how easily borrowing too much can undermine this plan. > “Things we were taught could be assets aren’t really assets,” he said. “They’re liabilities.” Houses appreciate, cars depreciate. Spend the minimum possible amount on transportation if you want your net worth to go up.

viklove 7y ago
> Houses appreciate Don't rely on this
- dahfizz 7y ago
  Worst case scenario, you get to retire and live rent free. Even if it doesn't appreciate, you still own a house.
  - shoo 7y ago
    Worst case scenario? It's probably closer to this: buy way more house than you need and can sensibly afford. Buy heavily leveraged at market peak. Housing market tumbles. Have a bit of bad luck and lose your job and your income. Be in a position where you can't keep up with mortgage repayments and be forced to sell when the market price for the house is less than the amount of debt you still owe the bank... Or even grimmer: as above, but start renovations before the market crashes and losing your job. Discover there are major structural problems so it costs 3x more than expected to put the house back into a sellable state. Then, before construction is finished, be forced to sell an unfinished house with negative equity....
- SkyPuncher 7y ago
  Agreed. I've always considered this a bit of a myth. Most houses only appreciate if you spend time, effort, and money to properly maintain them. On top of maintenance, in most places, you'll have to pay annual taxes. When I go to sell my current house, I may break even - essentially living free. However, I certainly don't expect to come out ahead.
war1025 7y ago
Houses appreciate while also having non-trivial upkeep costs that are often not factored in when people run the numbers on how much they "save" by owning. If you want to become acutely aware of this, buy a rental property and see how close to just breaking even it usually is as a financial investment.
- cactus2093 7y ago
  Everyone that I've talked to about their rental property usually talks about it in terms of just the cash flow though. So yeah, they'll complain about unexpected costs that bring them close to "break even" in many years, but then after 30 years they have a $500,000 (or however much it's worth) asset. So I don't feel too bad for them, and it makes sense why so many people do this if they can afford to.
nradov 7y ago
Land usually appreciates. Houses depreciate just like cars, unless you constantly do expensive maintenance.

viklove 7y ago

> Houses appreciate Don't rely on this

dahfizz 7y ago
Worst case scenario, you get to retire and live rent free. Even if it doesn't appreciate, you still own a house.
- shoo 7y ago
  Worst case scenario? It's probably closer to this: buy way more house than you need and can sensibly afford. Buy heavily leveraged at market peak. Housing market tumbles. Have a bit of bad luck and lose your job and your income. Be in a position where you can't keep up with mortgage repayments and be forced to sell when the market price for the house is less than the amount of debt you still owe the bank... Or even grimmer: as above, but start renovations before the market crashes and losing your job. Discover there are major structural problems so it costs 3x more than expected to put the house back into a sellable state. Then, before construction is finished, be forced to sell an unfinished house with negative equity....
SkyPuncher 7y ago
Agreed. I've always considered this a bit of a myth. Most houses only appreciate if you spend time, effort, and money to properly maintain them. On top of maintenance, in most places, you'll have to pay annual taxes. When I go to sell my current house, I may break even - essentially living free. However, I certainly don't expect to come out ahead.

war1025 7y ago

Houses appreciate while also having non-trivial upkeep costs that are often not factored in when people run the numbers on how much they "save" by owning. If you want to become acutely aware of this, buy a rental property and see how close to just breaking even it usually is as a financial investment.

cactus2093 7y ago
Everyone that I've talked to about their rental property usually talks about it in terms of just the cash flow though. So yeah, they'll complain about unexpected costs that bring them close to "break even" in many years, but then after 30 years they have a $500,000 (or however much it's worth) asset. So I don't feel too bad for them, and it makes sense why so many people do this if they can afford to.

nradov 7y ago

Land usually appreciates. Houses depreciate just like cars, unless you constantly do expensive maintenance.