3 ms·

You state that as if savings accounts ever paid better than inflation. And in nearly a half-dozen decades of walking this Earth, I don't recall ever seeing that

You state that as if savings accounts ever paid better than inflation. And in nearly a half-dozen decades of walking this Earth, I don't recall ever seeing that happen. Of course a savings account pays below inflation, it's about as risk-free as money storage gets. You want better returns? Go with something that carries more risk.

Dave_TRS 4y ago
The saddest part of bank interest is that on top of it lagging inflation, but also gets taxed aggressively making it effectively lag by inflation by an even wider margin! Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise. I just hate debt personally, part of my upbringing. But I wonder if there's some reit or low fee investment vehicle that makes it easy to take advantage of this dynamic while still being able to sleep at night. Any ideas?
- fundad 4y ago
  Other than a 30-year fixed mortgage?
  - Dave_TRS 4y ago
    Yes, the dynamics of a 30 years mortgage are what I'm looking for, but turn-key. Because purchasing a property and getting a mortgage is a huge hassle up front and requires tons of work for many years. Compare this to buying a publicly traded security which requires the click of a button to purchase, and retrieving the tax slip each year.
- sakopov 4y ago
  > Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise. With mortgages at over 6% and personal loans at 8-9% (according to my local credit union) I'm not sure if it's that much better and if deductions would offset high interest rates, but it's definitely a nice kickback.
- jrockway 4y ago
  Mortgage debt shouldn't prevent you from sleeping at night. You can live inside your investment, and the purchasing power of the money you borrowed just decreases over time. The way you go astray is to take on too much debt (everyone buys way too much house) or to choose exotic loan products that sound cheap today, but aren't. (2008 seemed to kill most of those off.) As with anything, approach it rationally. Is there a home you want to buy, and can you put 20% down today, and can you afford the monthly payments + property taxes + insurance + random repairs that you'll have to make? If so, it's not a bad investment; after all, you have to live somewhere. As with any investment, there is some risk. Your neighborhood could become bad. The entire house could be supported only by dead termites. But most of the time, the horror scenarios you read about don't happen; you enjoy living there, and sell it some years down the road for well more than you paid into the loan. It's worth considering over pure investment vehicles; you can't live in an ETF, and there are no tax breaks.
- tedunangst 4y ago
  Just buy shares in a reit.
  - alecco 4y ago
    https://seekingalpha.com/news/3956715-reits-fall-this-week-even-though-major-indices-gain https://seekingalpha.com/news/3956715-reits-fall-this-week-e... (Apr. 15, 2023) Be careful investing on things/markets you don't fully understand.
deleted 4y ago
[deleted]

Dave_TRS 4y ago

The saddest part of bank interest is that on top of it lagging inflation, but also gets taxed aggressively making it effectively lag by inflation by an even wider margin! Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise. I just hate debt personally, part of my upbringing. But I wonder if there's some reit or low fee investment vehicle that makes it easy to take advantage of this dynamic while still being able to sleep at night. Any ideas?

fundad 4y ago
Other than a 30-year fixed mortgage?
- Dave_TRS 4y ago
  Yes, the dynamics of a 30 years mortgage are what I'm looking for, but turn-key. Because purchasing a property and getting a mortgage is a huge hassle up front and requires tons of work for many years. Compare this to buying a publicly traded security which requires the click of a button to purchase, and retrieving the tax slip each year.
sakopov 4y ago
> Being a borrower is the way to go, where your interest payments are less than inflation AND you get to deduct each year on your taxes and save keep more real dollars in your bank account than you would otherwise. With mortgages at over 6% and personal loans at 8-9% (according to my local credit union) I'm not sure if it's that much better and if deductions would offset high interest rates, but it's definitely a nice kickback.
jrockway 4y ago
Mortgage debt shouldn't prevent you from sleeping at night. You can live inside your investment, and the purchasing power of the money you borrowed just decreases over time. The way you go astray is to take on too much debt (everyone buys way too much house) or to choose exotic loan products that sound cheap today, but aren't. (2008 seemed to kill most of those off.) As with anything, approach it rationally. Is there a home you want to buy, and can you put 20% down today, and can you afford the monthly payments + property taxes + insurance + random repairs that you'll have to make? If so, it's not a bad investment; after all, you have to live somewhere. As with any investment, there is some risk. Your neighborhood could become bad. The entire house could be supported only by dead termites. But most of the time, the horror scenarios you read about don't happen; you enjoy living there, and sell it some years down the road for well more than you paid into the loan. It's worth considering over pure investment vehicles; you can't live in an ETF, and there are no tax breaks.
tedunangst 4y ago
Just buy shares in a reit.
- alecco 4y ago
  https://seekingalpha.com/news/3956715-reits-fall-this-week-even-though-major-indices-gain https://seekingalpha.com/news/3956715-reits-fall-this-week-e... (Apr. 15, 2023) Be careful investing on things/markets you don't fully understand.

deleted 4y ago

[deleted]