When cheap housing isn’t really a good deal

[lys]

Um - this seems a bit obvious to me that you need to look at more than the actual cost of the home when making these decisions. You need to look at the WHOLE picture of your life and finances - child care (where and what cost), schools - (public or private), transportation (need a car or use public transportation and related costs), hours of work, traffic, and on and on. These are NOT hidden costs - they are just not included in people's thought process.

Look at your budget people --- but, alas, far too many people have no clue where there money is going and won't spend the time to find out.

[AAM2012]

Don't lenders ask you and confirm your debt whether it's SL, car payments, etc. are they not taking these into consideration?

[wise_rita]

I don't own a home, and the prospect of owning one freaks me out because my job is so much more likely than anything else to change throughout my life.

Why would I want to be tied down to 1 place (owned home) when this huge variable can and will change as I go through life?

And yet the only way to build wealth seems to own property. I feel like it's a zero sum game.

[v]

Apr 1, 2015 1:31:38 GMT -5 wise_rita said:

I don't own a home, and the prospect of owning one freaks me out because my job is so much more likely than anything else to change throughout my life.

Why would I want to be tied down to 1 place (owned home) when this huge variable can and will change as I go through life?

And yet the only way to build wealth seems to own property. I feel like it's a zero sum game.

Why do you say that?

We don't own a home, but I don't think we're having trouble building wealth, through savings and investments.  In fact, the idea of buying a home freaks me out in part because all that money would be tied up and wouldn't feel like wealth to me (unless or until I sold the home and freed up the cash).

[wise_rita]

Apr 1, 2015 6:21:22 GMT -5 v said:

Apr 1, 2015 1:31:38 GMT -5 wise_rita said:

I don't own a home, and the prospect of owning one freaks me out because my job is so much more likely than anything else to change throughout my life.

Why would I want to be tied down to 1 place (owned home) when this huge variable can and will change as I go through life?

And yet the only way to build wealth seems to own property. I feel like it's a zero sum game.

Why do you say that?

We don't own a home, but I don't think we're having trouble building wealth, through savings and investments.  In fact, the idea of buying a home freaks me out in part because all that money would be tied up and wouldn't feel like wealth to me (unless or until I sold the home and freed up the cash).

Because where I live that is 100% the mentality.  1000% even.

Coincidentally a big American-style bubble is predicted.  It's got to come crashing down, it's inevitable.  Prices have gone into the stratosphere and wages just aren't keeping up.  Major industries are hurting badly.

And yet I feel this compulsion to own.  Probably because it is touted as The One True Way.

I'd be super keen to hear from wealth builders who do not own property.  Do you have websites, blogs, etc?

[Susie]

Apr 1, 2015 6:28:34 GMT -5 wise_rita said:

Because where I live that is 100% the mentality.  1000% even.

Coincidentally a big American-style bubble is predicted.  It's got to come crashing down, it's inevitable.  Prices have gone into the stratosphere and wages just aren't keeping up.  Major industries are hurting badly.

And yet I feel this compulsion to own.  Probably because it is touted as The One True Way.

I'd be super keen to hear from wealth builders who do not own property.  Do you have websites, blogs, etc?

That seems like a pretty narrow mindset that you can move beyond.  I don't think wealth building without owning real estate is really all that complicated.  We do happen to own a house, but it hasn't done anything to help us build wealth in the last 7 years.  The value has stayed pretty flat, and we've slowly chipped away at the mortgage.  The major factors in our six figure gains in net worth (which, to be fair, took us from negative a few hundred $k to about +$50k in that time span) have mostly been in our retirement accounts, combined with SL payoff.  If we had extra cash after doing those things, taxable investment accounts would be next.  There is so much more potential to generate wealth that way.  The house is just a place that we live with the perk of doing whatever we want to it, without a landlord's input, and our dogs are allowed.

[wise_rita]

Apr 1, 2015 6:46:04 GMT -5 Susie said:

Apr 1, 2015 6:28:34 GMT -5 wise_rita said:

Because where I live that is 100% the mentality.  1000% even.

Coincidentally a big American-style bubble is predicted.  It's got to come crashing down, it's inevitable.  Prices have gone into the stratosphere and wages just aren't keeping up.  Major industries are hurting badly.

And yet I feel this compulsion to own.  Probably because it is touted as The One True Way.

I'd be super keen to hear from wealth builders who do not own property.  Do you have websites, blogs, etc?

That seems like a pretty narrow mindset that you can move beyond.  I don't think wealth building without owning real estate is really all that complicated.  We do happen to own a house, but it hasn't done anything to help us build wealth in the last 7 years.  The value has stayed pretty flat, and we've slowly chipped away at the mortgage.  The major factors in our six figure gains in net worth (which, to be fair, took us from negative a few hundred $k to about +$50k in that time span) have mostly been in our retirement accounts, combined with SL payoff.  If we had extra cash after doing those things, taxable investment accounts would be next.  There is so much more potential to generate wealth that way.  The house is just a place that we live with the perk of doing whatever we want to it, without a landlord's input, and our dogs are allowed.

Stories like yours can get me on the right path!

Thanks for the perspective.

[oswin]

Apr 1, 2015 6:46:04 GMT -5 Susie said:

Apr 1, 2015 6:28:34 GMT -5 wise_rita said:

Because where I live that is 100% the mentality.  1000% even.

Coincidentally a big American-style bubble is predicted.  It's got to come crashing down, it's inevitable.  Prices have gone into the stratosphere and wages just aren't keeping up.  Major industries are hurting badly.

And yet I feel this compulsion to own.  Probably because it is touted as The One True Way.

I'd be super keen to hear from wealth builders who do not own property.  Do you have websites, blogs, etc?

That seems like a pretty narrow mindset that you can move beyond.  I don't think wealth building without owning real estate is really all that complicated.  We do happen to own a house, but it hasn't done anything to help us build wealth in the last 7 years.  The value has stayed pretty flat, and we've slowly chipped away at the mortgage.  The major factors in our six figure gains in net worth (which, to be fair, took us from negative a few hundred $k to about +$50k in that time span) have mostly been in our retirement accounts, combined with SL payoff.  If we had extra cash after doing those things, taxable investment accounts would be next.  There is so much more potential to generate wealth that way.  The house is just a place that we live with the perk of doing whatever we want to it, without a landlord's input, and our dogs are allowed.

I agree, owning property has little to do with building wealth. Wealth is built by spending less than your income. The more you can save, or invest, or pay off debt, the greater your wealth will be.

[explorer2001]

Apr 1, 2015 6:46:04 GMT -5 Susie said:

Apr 1, 2015 6:28:34 GMT -5 wise_rita said:

Because where I live that is 100% the mentality.  1000% even.

Coincidentally a big American-style bubble is predicted.  It's got to come crashing down, it's inevitable.  Prices have gone into the stratosphere and wages just aren't keeping up.  Major industries are hurting badly.

And yet I feel this compulsion to own.  Probably because it is touted as The One True Way.

I'd be super keen to hear from wealth builders who do not own property.  Do you have websites, blogs, etc?

That seems like a pretty narrow mindset that you can move beyond.  I don't think wealth building without owning real estate is really all that complicated.  We do happen to own a house, but it hasn't done anything to help us build wealth in the last 7 years.  The value has stayed pretty flat, and we've slowly chipped away at the mortgage.  The major factors in our six figure gains in net worth (which, to be fair, took us from negative a few hundred $k to about +$50k in that time span) have mostly been in our retirement accounts, combined with SL payoff.  If we had extra cash after doing those things, taxable investment accounts would be next.  There is so much more potential to generate wealth that way.  The house is just a place that we live with the perk of doing whatever we want to it, without a landlord's input, and our dogs are allowed.

Basically exactly this except I bought my house at the wrong time and it's still underwater even after starting with 20% equity and having paid down the mortgage. Thankfully I'm approaching break even on the house. But it is a nice place to live where I have more control. Still my net worth gains are all about debt pay off and retirement investment.

[v]

Apr 1, 2015 6:28:34 GMT -5 wise_rita said:

Apr 1, 2015 6:21:22 GMT -5 v said:

Why do you say that?

We don't own a home, but I don't think we're having trouble building wealth, through savings and investments.  In fact, the idea of buying a home freaks me out in part because all that money would be tied up and wouldn't feel like wealth to me (unless or until I sold the home and freed up the cash).

Because where I live that is 100% the mentality.  1000% even.

Coincidentally a big American-style bubble is predicted.  It's got to come crashing down, it's inevitable.  Prices have gone into the stratosphere and wages just aren't keeping up.  Major industries are hurting badly.

And yet I feel this compulsion to own.  Probably because it is touted as The One True Way.

I'd be super keen to hear from wealth builders who do not own property.  Do you have websites, blogs, etc?

Okay, but just because that's the mentality doesn't make it reality.  Let's be honest: most people aren't all that smart about finances and wealth accumulation so there's no reason to blindly believe in what they believe in.