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That's right, almost everything you buy is a financial liability. Debt glutton is a very loaded term. I bought 2 houses in the pandemic but I did so thoughtful

That's right, almost everything you buy is a financial liability. Debt glutton is a very loaded term. I bought 2 houses in the pandemic but I did so thoughtfully, after much research. My income can fully cover both mortgages and living expenses. In the US, interest rates are usually locked in and the monthly payment on the mortgage is not affected by the rates of today. Everyone I know who did "the real estate thing" is playing the long game. All of our assets are illiquid for now and that's okay. There are always reckless people, unlucky people, foolish people. But vilifying debt is not the answer.

dgellow 3y ago
The lesson I remember learning from 2008 was that a really, really large part of the population is foolish and reckless. On both sides, not only buyers. What if you’re the exception here instead of the norm?
- LargeTomato 3y ago
  They you win at capitalism? By "exception" I interpret that to mean "someone who is capable of financial forethought".
al_borland 3y ago
Looking at the statistics around personal finance and debt in the US, a majority are not using debt thoughtfully. I don't know that I'd call them foolish or (willfully) reckless, they were just never taught how to manage money or debt, and are surrounded by messaging that tells them to use it in ways that aren't in their best interest. Unless all of those people decide to take it upon themselves to learn those skills and ignore all that temptation, it is probably best for them to minimize their use of debt, as it is costing them much more than they can hope to gain from the leverage. I don't think I'd classify someone in your situation as a debt glutton (from the very little I know). I'm more talking about the people who live at the edge of what debt will afford them. The nicest house, cars, clothes, etc that they can get with the least amount of money down while living paycheck to paycheck to keep up with the payments.... or doing something similar with businesses/real estate, where their plan assumes we'll always be in good times and can't weather a storm. Even when done thoughtfully, there is still risk. It's good that your income can cover the mortgage on both homes and you aren't assuming a tenant is going to reliably pay the rent every month when the mortgage payment is due, but there is the question of the security of that income during a financial downturn. I wish you nothing but the best and do hope the long term play works out for you. I just don't want people to ignore risk in their calculations. The more debt someone has, the more risk they have. The average American has a lot of this type of risk wrapped up in liabilities, not even assets. As far as being unlucky, some people have been dealt bad hands that will knock anyone down. But preparing in good times can make someone appear more lucky during the bad times. Only time can tell what that looks like. That extra home, if a good tenant is paying rent, could be a big benefit and make you appear very lucky in future bad times. For me, I paid my house off in the good times to reduce my costs if/when bad times come. Different strategies, but hopefully similar results of stability.

dgellow 3y ago

The lesson I remember learning from 2008 was that a really, really large part of the population is foolish and reckless. On both sides, not only buyers. What if you’re the exception here instead of the norm?

LargeTomato 3y ago
They you win at capitalism? By "exception" I interpret that to mean "someone who is capable of financial forethought".

al_borland 3y ago

Looking at the statistics around personal finance and debt in the US, a majority are not using debt thoughtfully. I don't know that I'd call them foolish or (willfully) reckless, they were just never taught how to manage money or debt, and are surrounded by messaging that tells them to use it in ways that aren't in their best interest. Unless all of those people decide to take it upon themselves to learn those skills and ignore all that temptation, it is probably best for them to minimize their use of debt, as it is costing them much more than they can hope to gain from the leverage. I don't think I'd classify someone in your situation as a debt glutton (from the very little I know). I'm more talking about the people who live at the edge of what debt will afford them. The nicest house, cars, clothes, etc that they can get with the least amount of money down while living paycheck to paycheck to keep up with the payments.... or doing something similar with businesses/real estate, where their plan assumes we'll always be in good times and can't weather a storm. Even when done thoughtfully, there is still risk. It's good that your income can cover the mortgage on both homes and you aren't assuming a tenant is going to reliably pay the rent every month when the mortgage payment is due, but there is the question of the security of that income during a financial downturn. I wish you nothing but the best and do hope the long term play works out for you. I just don't want people to ignore risk in their calculations. The more debt someone has, the more risk they have. The average American has a lot of this type of risk wrapped up in liabilities, not even assets. As far as being unlucky, some people have been dealt bad hands that will knock anyone down. But preparing in good times can make someone appear more lucky during the bad times. Only time can tell what that looks like. That extra home, if a good tenant is paying rent, could be a big benefit and make you appear very lucky in future bad times. For me, I paid my house off in the good times to reduce my costs if/when bad times come. Different strategies, but hopefully similar results of stability.