5 ms·

Maybe not for boots but what about housing?

nomorewords 5y ago
Yeah, the above comment kind of stuck to the analogy item of shoes. A lot of the things that are quality and are worth it (from a long-term POV) are going to be better value than getting the lower quality item more often, than the one time purchase. Housing is also getting pretty bad. Essentially, the lower your income, the more you are expected to pay back to the bank since you can only put aside so much money for the mortgage each month. A well-off person will pay his house as much as 2-3x faster than a 'poor' person, essentially allowing him to invest for the future at a much earlier stage in life.
- viraptor 5y ago
  There are also extras that come with the home. The better house you buy, the less you spend on heating/cooling. The more you can invest in solar panels / batteries, the less you spend on electricity. The bigger house you get, the more space you can use for buying bulk items. The more exclusive area you live in, the lower the insurance. And many others...
- WalterBright 5y ago
  On the other hand, mortgage interest is often the cheapest way to borrow money. A savvy wealthier homeowner may very deliberately minimize paying back the mortgage in order to invest the borrowed funds elsewhere. Mortgage interest is also tax-deductible, while personal loan interest is not. This makes the mortgage the last debt to pay off, not the first.
  - lotsofpulp 5y ago
    > Mortgage interest is also tax-deductible, while personal loan interest is not This does not affect 80%+ people, who are better off with standard deductions since 2017 tax cuts and jobs act. In 2018, 87% did not itemize. https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-glance https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-...
    - WalterBright 5y ago
      80% were better off with Trump tax cuts? I had no idea! I should stop watching CNN :-) In any case, this doesn't change that wealthy people are likely not in a hurry to pay off their cheapest debt.
      - dragonwriter 5y ago
        > 80% were better off with Trump tax cuts? No, 80% percent are better off with the standard deduction than itemizing given the Trump tax changes (which include increases, like limiting the SALT deduction, as well as cuts.)
        WalterBright 5y ago
        The standard deduction was nearly doubled, as well as the 15% tax rate was cut to 12%. It's hard to see how lower income people would be paying more.
        dragonwriter 5y ago
        > It's hard to see how lower income people would be paying more. One might almost imagine that there is a reason that no one at all has said “lower income people are paying more” in this discussion. But have fun beating that strawman.
        WalterBright 5y ago
        Except you decided to argue with me when I said they were better off under the Trump tax cuts.
      - lotsofpulp 5y ago
        Sorry, I was not supposed to include the part from your reply about personal loans. I was just pointing out that the mortgage interest deduction is effectively useless for 87% of people.
    - 5y ago

Yeah, the above comment kind of stuck to the analogy item of shoes. A lot of the things that are quality and are worth it (from a long-term POV) are going to be better value than getting the lower quality item more often, than the one time purchase. Housing is also getting pretty bad. Essentially, the lower your income, the more you are expected to pay back to the bank since you can only put aside so much money for the mortgage each month. A well-off person will pay his house as much as 2-3x faster than a 'poor' person, essentially allowing him to invest for the future at a much earlier stage in life.

viraptor 5y ago
There are also extras that come with the home. The better house you buy, the less you spend on heating/cooling. The more you can invest in solar panels / batteries, the less you spend on electricity. The bigger house you get, the more space you can use for buying bulk items. The more exclusive area you live in, the lower the insurance. And many others...
WalterBright 5y ago
On the other hand, mortgage interest is often the cheapest way to borrow money. A savvy wealthier homeowner may very deliberately minimize paying back the mortgage in order to invest the borrowed funds elsewhere. Mortgage interest is also tax-deductible, while personal loan interest is not. This makes the mortgage the last debt to pay off, not the first.
- lotsofpulp 5y ago
  > Mortgage interest is also tax-deductible, while personal loan interest is not This does not affect 80%+ people, who are better off with standard deductions since 2017 tax cuts and jobs act. In 2018, 87% did not itemize. https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-glance https://www.irs.gov/statistics/soi-tax-stats-tax-stats-at-a-...
  - WalterBright 5y ago
    80% were better off with Trump tax cuts? I had no idea! I should stop watching CNN :-) In any case, this doesn't change that wealthy people are likely not in a hurry to pay off their cheapest debt.
    - dragonwriter 5y ago
      > 80% were better off with Trump tax cuts? No, 80% percent are better off with the standard deduction than itemizing given the Trump tax changes (which include increases, like limiting the SALT deduction, as well as cuts.)
      - WalterBright 5y ago
        The standard deduction was nearly doubled, as well as the 15% tax rate was cut to 12%. It's hard to see how lower income people would be paying more.
        dragonwriter 5y ago
        > It's hard to see how lower income people would be paying more. One might almost imagine that there is a reason that no one at all has said “lower income people are paying more” in this discussion. But have fun beating that strawman.
        WalterBright 5y ago
        Except you decided to argue with me when I said they were better off under the Trump tax cuts.
    - lotsofpulp 5y ago
      Sorry, I was not supposed to include the part from your reply about personal loans. I was just pointing out that the mortgage interest deduction is effectively useless for 87% of people.
  - 5y ago