4 ms·

It's interesting that you say that, I've also done quite well for myself, and I was in a position to risk more because I hadn't committed all my free capital to

It's interesting that you say that, I've also done quite well for myself, and I was in a position to risk more because I hadn't committed all my free capital to a down payment on a mortgage. In fact, at that time, I wouldn't have been able to afford a place I actually wanted to live in anyways. Putting down roots doesn't mean owning a property you don't want to, and being unable to then expose yourself to more interesting risks due to being house-poor. This is of course equally anecdotal, which is why I think folks would do well to review the NYT calculator to evaluate the specifics of their situation :) Risk is good! I'm a big fan of risk. However, a house won't go up more than a few points a year. That's never going to be life changing money. The opportunity cost of the down payment making you unable to early exercise some startup equity could on the other hand leave you pretty full of regret.

seibelj 5y ago
In the US you can put 5% down and lock in your monthly payment forever. This is because the government subsidizes this. It’s an incredible trade and that’s why any attempts at reform are lobbied so aggressively.
- blitzar 5y ago
  The 'trade' in all this is not the appreciation of house price. Housing is a middling performing, high maintenance cost, depreciating asset. However, you can borrow against it cheaper than virtually any other asset in existence at absurd leverage ratios - and swap your cash flow for the ownership of the asset. So long as interest rates are at or below growth / inflation / or your salary increases - it is a good investment.
pengaru 5y ago
> The opportunity cost of the down payment making you unable to early exercise some startup equity could on the other hand leave you pretty full of regret. Startup equity of the kind that produces fuck you-money returns shouldn't cost that much to early exercise since it's usually early stage, that's kind of the whole point of early exercise and filing the 83b before the imaginary value goes up in subsequent funding rounds. When it's late stage enough for exercising to cost a pile of money, people usually don't bother with exercising and simply wait for a liquidity event to occur, assuming accelerated vesting will accompany it, and pay the exercise cost and taxes directly from the shares AIUI. But I suppose it's nice to be able to exercise and leave if you wanted to before a liquidity event, since the options tend to expire in what... 90 days? Preserving that option with a pile of cash on hand is useful, handcuffs are annoying regardless of their color.
- deleted 5y ago
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seibelj 5y ago

In the US you can put 5% down and lock in your monthly payment forever. This is because the government subsidizes this. It’s an incredible trade and that’s why any attempts at reform are lobbied so aggressively.

blitzar 5y ago
The 'trade' in all this is not the appreciation of house price. Housing is a middling performing, high maintenance cost, depreciating asset. However, you can borrow against it cheaper than virtually any other asset in existence at absurd leverage ratios - and swap your cash flow for the ownership of the asset. So long as interest rates are at or below growth / inflation / or your salary increases - it is a good investment.

pengaru 5y ago

> The opportunity cost of the down payment making you unable to early exercise some startup equity could on the other hand leave you pretty full of regret. Startup equity of the kind that produces fuck you-money returns shouldn't cost that much to early exercise since it's usually early stage, that's kind of the whole point of early exercise and filing the 83b before the imaginary value goes up in subsequent funding rounds. When it's late stage enough for exercising to cost a pile of money, people usually don't bother with exercising and simply wait for a liquidity event to occur, assuming accelerated vesting will accompany it, and pay the exercise cost and taxes directly from the shares AIUI. But I suppose it's nice to be able to exercise and leave if you wanted to before a liquidity event, since the options tend to expire in what... 90 days? Preserving that option with a pile of cash on hand is useful, handcuffs are annoying regardless of their color.

deleted 5y ago
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