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Thanks I’ve been watching videos on YouTube about becoming a millionaire in retirement. They say mortgages and car payments are bad in any form. To them any de

by wil421 7y ago

Thanks I’ve been watching videos on YouTube about becoming a millionaire in retirement. They say mortgages and car payments are bad in any form. To them any debt is bad no matter what it is and drags down their calculation of becoming a millionaire. Their calculation for net worth is all savings minus any form of debt.

neogodless 7y ago
https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal... There are a lot of variables in play, but buying a house with a mortgage can end up being better financially than renting. There are a lot of factors to consider. If renting is worse than home ownership, and you hold off buying until you can do it without a mortgage, you may lose out. Additionally, if you can get a really low fixed-rate long-term mortgage, but you invest in long-term total market index funds, historically, you'll come out on top over having paid cash for the house.
theandrewbailey 7y ago
Net worth is assets (everything you own, not savings only) minus liabilities (like debt).
sersi 7y ago
Car payments and mortgages are very different things. A car payment is a loan for a depreciating asset. So even after you finish repaying your car, at the end you have an asset that's worth much less than what you paid for it. A mortgage is different, by getting a mortgage and buying a house, you build up your assets with every payments you make, it's often better than paying a rent and not getting anything in the end... The main difference between a car and a house is that the house generally doesn't depreciate, which is why a mortgage can be a good investment.
- appleiigs 7y ago
  No, car payments and mortgages are very much similar things. Excluding the land, your house depreciates. You have to spend money to maintain both. The rent expense goes to the landlord, and the mortgage interest goes to the banklord. Rent is often cheaper, saving you money. And the savings can be invested and grow in value. You get that in the end.
sdfjklgfdsa 7y ago
Interest rates are abysmally low and a mortgage is one of the few ways you can take advantage of this. Also, if debt is bad (and I agree), do these people live with their parents? Because that's the soundest financial move possible.
whatok 7y ago
Any debt is bad if not managed properly. I don't think buying a house makes sense in all circumstances and that largely depends on where you're living and what you do for work. Being debt-free might feel good but you miss out on a lot of opportunities that you could otherwise responsibly take by completely avoiding debt. I'm assuming by you maxing out your 401k and taking advantage of your employee plans that you're responsible with your finances so I wouldn't completely overthink things.

by wil421 7y ago

neogodless 7y ago

https://www.nytimes.com/interactive/2014/upshot/buy-rent-calculator.html https://www.nytimes.com/interactive/2014/upshot/buy-rent-cal... There are a lot of variables in play, but buying a house with a mortgage can end up being better financially than renting. There are a lot of factors to consider. If renting is worse than home ownership, and you hold off buying until you can do it without a mortgage, you may lose out. Additionally, if you can get a really low fixed-rate long-term mortgage, but you invest in long-term total market index funds, historically, you'll come out on top over having paid cash for the house.

theandrewbailey 7y ago

Net worth is assets (everything you own, not savings only) minus liabilities (like debt).

sersi 7y ago

Car payments and mortgages are very different things. A car payment is a loan for a depreciating asset. So even after you finish repaying your car, at the end you have an asset that's worth much less than what you paid for it. A mortgage is different, by getting a mortgage and buying a house, you build up your assets with every payments you make, it's often better than paying a rent and not getting anything in the end... The main difference between a car and a house is that the house generally doesn't depreciate, which is why a mortgage can be a good investment.

appleiigs 7y ago
No, car payments and mortgages are very much similar things. Excluding the land, your house depreciates. You have to spend money to maintain both. The rent expense goes to the landlord, and the mortgage interest goes to the banklord. Rent is often cheaper, saving you money. And the savings can be invested and grow in value. You get that in the end.

sdfjklgfdsa 7y ago

Interest rates are abysmally low and a mortgage is one of the few ways you can take advantage of this. Also, if debt is bad (and I agree), do these people live with their parents? Because that's the soundest financial move possible.

whatok 7y ago

Any debt is bad if not managed properly. I don't think buying a house makes sense in all circumstances and that largely depends on where you're living and what you do for work. Being debt-free might feel good but you miss out on a lot of opportunities that you could otherwise responsibly take by completely avoiding debt. I'm assuming by you maxing out your 401k and taking advantage of your employee plans that you're responsible with your finances so I wouldn't completely overthink things.