theJ Posted July 10, 2023 Share Posted July 10, 2023 16 hours ago, naptownskinsfan said: It’s a good investment if you don’t drive yourself house-poor, which is what many people do. To the original response to me, I do agree that it’s a big business to keep people in debt. That’s a big problem that financial literacy would solve. Combine a restraint in avocado toast and DoorDash, and being smart with early debts like a car, young adults can put themselves in a much better place. Cars and houses and student loans. The latter really starts/started the issues with most people in their 20's and 30's. They get out of college with a 100k student loan, and then drive that up with another 50k in car loans and 400k in housing debt. Why? Because they don't want to wait 10 years to pay off that student loan before they get the nice car and house. I get it. I also think more college students should do more to avoid the student loan debt. 3 Quote Link to comment Share on other sites More sharing options...
MWil23 Posted July 10, 2023 Share Posted July 10, 2023 Buying a house is one of the biggest ways a middle class person can reasonably acquire wealth over the course of their adult life. After 15-30 years, you have a tangible asset worth over $200K (median), likely with a lot of investment growth compared to what it was purchased for. My house was worth $313K in 2020 and is now worth over $425K 3 years later…and while that return is a major exaggeration of the historic market, it’s not unreasonable to think that growth would happen over a couple of decades. 3 Quote Link to comment Share on other sites More sharing options...
TVScout Posted July 10, 2023 Share Posted July 10, 2023 (edited) On 7/9/2023 at 4:29 AM, Tugboat said: I think this is more reflective of a deeper problem in society, where companies deliberately seek to put people in debt. 99% of that is banks. Edited July 10, 2023 by TVScout Quote Link to comment Share on other sites More sharing options...
TVScout Posted July 10, 2023 Share Posted July 10, 2023 3 hours ago, MWil23 said: Buying a house is one of the biggest ways a middle class person can reasonably acquire wealth over the course of their adult life. After 15-30 years, you have a tangible asset worth over $200K (median), likely with a lot of investment growth compared to what it was purchased for. My house was worth $313K in 2020 and is now worth over $425K 3 years later…and while that return is a major exaggeration of the historic market, it’s not unreasonable to think that growth would happen over a couple of decades. Most people would be better buying a cheaper house and put the difference into a dividend portfolio or an index fund. Quote Link to comment Share on other sites More sharing options...
naptownskinsfan Posted July 10, 2023 Share Posted July 10, 2023 4 hours ago, theJ said: Cars and houses and student loans. The latter really starts/started the issues with most people in their 20's and 30's. They get out of college with a 100k student loan, and then drive that up with another 50k in car loans and 400k in housing debt. Why? Because they don't want to wait 10 years to pay off that student loan before they get the nice car and house. I get it. I also think more college students should do more to avoid the student loan debt. Yeah there is a lot more that they can do to avoid student loan debt, in part or completely. Having family who taught me early on about finances, I started working when I went to community college. 1.5 years in, I decided it wasn’t for me. I began working full-time for the company I worked for out of high school, and I still work there today. I lived at home to keep an eye on my grandmother. At 25, I totaled a car and needed a new one. I bought a new Dodge Charger cash. At 27, my grandmother finally wanted me to move out to get on with my life. I bought a house at $353k putting 1/3 of it on a down payment. It has gone up in value about 66%. Invest well, save from the beginning and don’t spend money on stupid things. I realize not everyone will have the ability like me to basically stay at home for nine years after college, so stories change, but similar things can happen. One of my former co-workers did something similar with a much smaller home and down payment around the same age for her first home, and then used the equity to upgrade a few years later. 1 Quote Link to comment Share on other sites More sharing options...
theJ Posted July 10, 2023 Share Posted July 10, 2023 1 hour ago, TVScout said: Most people would be better buying a cheaper house and put the difference into a dividend portfolio or an index fund. Well, starting out as an adult, sure. But life isn't about just accumulating wealth. You gotta spend some of that money too, which probably means a price appropriate home for your situation. Not necessarily the cheapest thing you can get. Because if i did that, who knows how many of my kids would be left by now (jk). 4 Quote Link to comment Share on other sites More sharing options...
MWil23 Posted July 10, 2023 Share Posted July 10, 2023 (edited) On 7/10/2023 at 11:27 AM, TVScout said: Most people would be better buying a cheaper house and put the difference into a dividend portfolio or an index fund. It depends on your goals entirely and family situation. Plus, I don’t want to live in a cheap or lousy neighborhood with lousy clientele and a lousy school system or community. I’d rather have a nice 30 year quality of life than a few extra bucks in a portfolio, which for the record, currently is why boomers are waiting to retire another few years. No thanks. Edited July 16, 2023 by MWil23 1 Quote Link to comment Share on other sites More sharing options...
ramssuperbowl99 Posted July 10, 2023 Share Posted July 10, 2023 7 hours ago, TVScout said: Most people would be better buying a cheaper house and put the difference into a dividend portfolio or an index fund. At the risk of drastically oversimplifying an annoyingly complicated personal finance decision, the math entirely changes if you have kids and can find a house with good public schooling. 2 Quote Link to comment Share on other sites More sharing options...
ramssuperbowl99 Posted July 10, 2023 Share Posted July 10, 2023 11 hours ago, theJ said: Cars and houses and student loans. The latter really starts/started the issues with most people in their 20's and 30's. They get out of college with a 100k student loan, and then drive that up with another 50k in car loans and 400k in housing debt. Why? Because they don't want to wait 10 years to pay off that student loan before they get the nice car and house. I get it. I also think more college students should do more to avoid the student loan debt. There is both a societal and individual problem that you've touched on. Individually, I agree taking all of this out right away is stupid. But, if people have to wait 10 years to pay their student loans off before getting the house: 6 hours ago, theJ said: Well, starting out as an adult, sure. But life isn't about just accumulating wealth. You gotta spend some of that money too, which probably means a price appropriate home for your situation. Not necessarily the cheapest thing you can get. Because if i did that, who knows how many of my kids would be left by now (jk). How are they going to have their debt paid off, pay for the birth of any kids, and get a down payment saved for a kid-friendly house in a decent school district by the time they hit 35? A decade of student loan debt means the clock is starting at 32. Making people choose between financial irresponsibility or geriatric pregnancy is a societal problem that needs to be addressed. Put bluntly - young people don't have enough cash coming in. 2 Quote Link to comment Share on other sites More sharing options...
TVScout Posted July 11, 2023 Share Posted July 11, 2023 2 hours ago, ramssuperbowl99 said: .... good public schooling No such thing. Other than that I am advising people to avoid buying the most expensive house they can find. I know people who buy five bedroom houses even though they have only 2 kids just because they want the biggest and most expensive house available. Those extra bedrooms are property tax deadweights. I don't know how things work in other states but in the University of California system 90% of the budget goes into staff and payroll. That might sound like a good thing but 90% of the employees never go into a class room. In fact there are more admins than there are tuition paying undergrads. Quote Link to comment Share on other sites More sharing options...
TVScout Posted July 11, 2023 Share Posted July 11, 2023 8 hours ago, theJ said: Because if i did that, who knows how many of my kids would be left by now Do you mean still living in your house? Quote Link to comment Share on other sites More sharing options...
theJ Posted July 11, 2023 Share Posted July 11, 2023 2 hours ago, ramssuperbowl99 said: How are they going to have their debt paid off, pay for the birth of any kids, and get a down payment saved for a kid-friendly house in a decent school district by the time they hit 35? A decade of student loan debt means the clock is starting at 32. Making people choose between financial irresponsibility or geriatric pregnancy is a societal problem that needs to be addressed. Put bluntly - young people don't have enough cash coming in. There's really no way around it but avoiding the debt in the first place. ie i agree with you. 1 Quote Link to comment Share on other sites More sharing options...
beekay414 Posted July 11, 2023 Share Posted July 11, 2023 What about those of us that just decide that home ownership is something that isn't for us? I have no desire to ever own a home and never have. If I could, I'd be a nomad or drifter but financials keep me shackled to one place at a time. 1 Quote Link to comment Share on other sites More sharing options...
K9 Posted July 11, 2023 Share Posted July 11, 2023 1 hour ago, beekay414 said: What about those of us that just decide that home ownership is something that isn't for us? I have no desire to ever own a home and never have. If I could, I'd be a nomad or drifter but financials keep me shackled to one place at a time. Same, I don't want the responsibilities that go along with it! It's never been a 'dream' of mine. I also hate renting because it keeps going up so.... But honestly, I have a problem owning anything. Heck, I just bought my first car (I've always leased) and am 2 months in. 😁 Little by little.. LoL 1 Quote Link to comment Share on other sites More sharing options...
theJ Posted July 11, 2023 Share Posted July 11, 2023 8 hours ago, beekay414 said: What about those of us that just decide that home ownership is something that isn't for us? I have no desire to ever own a home and never have. If I could, I'd be a nomad or drifter but financials keep me shackled to one place at a time. The main benefit is locking in your housing cost long term. It's not ideal to rent forever really. You'd have to do the math over the course of 40-50 years to see how detrimental it is really. 2 Quote Link to comment Share on other sites More sharing options...
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