200 thoughts on “3 Financial Lies We’ve Been Told Our Whole Lives”

1. There is a great deal of truth here, and valuable truth at that, but let’s temper it with another observation of enduring importance:
   Every Rule Has Its Exceptions.
   (Well, except for that one.)
   Not all corporate employment is predatory.
   On rare occasions there is some justification for incurring non-investment debt.
   Debt incurred to finance a business is sometimes unwise, especially if the use of the borrowed money is poorly or incompletely thought out.
   HOWEVER: We call them exceptions because they’re uncommon — very uncommon. Conforming to the “rule” is almost always a better idea than trying to justify an exception that only you can see.

   1. Thank god you did not write ‘exceptions prove the rule’. Almost nobody seems to know that the word ‘prove’ is meant in the older sense of ‘test’.

2. Would love for you to provide some basic evidence to support the notion that ‘your house is not an asset’ without using extremes like Detroit along with Wal-Mart income earners being coerced into buying multi-million dollar mansions from predatory banks.
   If you’re assuming that someone is working contract-to-contract or is sitting on precarious job security, then maybe I’ll agree. Is it because everyone lacks knowledge in how to properly look after a home? Google is a powerful tool, and one can find techniques on repair with a simple search. Buy an older house, fix it up (something millennials don’t know how to do) rent out the basement or a couple rooms. Pay off your mortgage as fast as possible. Reap the benefits of having invested your mandatory living expenses rather than wasted them (rent).
   Your house is an asset, especially when you’d be paying roughly the same amount in rent on a monthly basis and losing that investment. Your “Lie #1” conflicts with “Lie #3” because you’re assuming your house will be worth substantially less in the future when in most cases it won’t. The building owner will gladly jack up your rent and not give a shit about the building in most cases. The stock-market is difficult to be played anymore when you’re up against insider knowledge and computers that buy/sell faster than you can click your mouse.

   1. I gotta agree. I think Lie#1 is based on certain circumstances. Did you buy your house in a buyer’s or seller’s market? I bought my house after the housing bubble burst and it have jumped $30-40K in value since then. The way my area keeps growing, it might jump another few grand. It’s getting really tempting to sell it, heh.

      1. I bought my house (back in Fall 2013) in a big sellers market in a slightly overvalued area, BUT it was 1) an older home (1983 build) and 2) a bit of a fixer upper. However, it wasn’t a massive overhaul (structural), it was simple stuff (updating).
         Most fixer-uppers can be intimidating to people who have no idea what they’re doing. But my Dad is very knowledgeable on pretty much everything to do with home improvement. Simply things like painting, installing hardwood flooring, crown and baseboard, we did ourselves.
         On a month to month basis, I pay roughly X (all-in) for my house. If I were to rent in my area or near where I work, I’d pay about 85-90% of what X is for a place that’s much smaller. Right now I rent 2 of the 3 bedrooms out and cover approximately 70% of X which allows me to make additional payments and forgo future interest payments.
         Doing the calculations, for every $1.00 I put into my mortgage principal, I get an approximate yearly return of 3.69% which is substantially better than the 0.5%/yr I get at my bank with my savings account. This return is solely due to the reduction in interest on the mortgage you would be paying anyways.
         Since I bought my place, average housing prices in my area have increased about 30%. This combined with the 3.69%/yr savings in interest payments, my rate of return since I bought the place is about 14.94%/year!
         I appreciate the article, but I disagree with “Lie #1”.

         1. technically, your rate of return is still zero until it becomes realized.
            as for the generality of the house isn’t an asset. it is technically wrong because even if it goes down in value its still an asset that can be liquidated. growth doesn’t define an asset.
            the logic behind it stems from a number of circumstances including interest rates are at all time lows. they will be going up. house price and interest rates are inversely related.
            depending on your area, and this is applicable to most, the price of “starter homes” are way above what an actual working family can afford and still eat. this is part of the reason banks are looking at multigeneration mortgages again.
            many boomers own multiple properties that will have to be liquidated to pay for retirements they haven’t saved for which will decrease the value of all the other houses including the ones just being built.
            the other factor relates to the opportunity costs of owning vs. renting. he did concede that you can own real estate as an asset. what he was directly addressing is many people don’t look at their home as an asset and make poor decisions. most people unless financially required wont rent out rooms or parts of the house to increase the value of the home.
            if you invest, or at least factor it into the argument, the difference between what people are paying to own vs what you pay to rent renting in many places is the more financially secure way to go. I read lie #1 more as a lie that you need to own. not that you should never own.
            while its Canadian, I suggest greaterfool.ca for an analysis of why houses are bad investments for most people.

         2. Agree, and the term asset can be confusing. Of course anything of value is technically an asset. But the way I think of it is, if you had every family do a net worth statement, for very few of them would their home actually be a net asset.

         3. “But the way I think of it is, if you had every family do a net worth statement, for very few of them would their home actually be a net asset”
            and I think that is the point of lie #1. people think it will be an asset but they don’t treat it as such. too many people over extend and don’t have anything to show for it. and when they need to sell later in life they don’t want to leave the house even though they haven’t saved for retirement and the house is the only thing they have which could be sold to buy groceries.
            there was a golden time when you could buy a house sit and it became more valuable by a decent portion. I think that time has gone. it may be back it may not but right now owning without treating it simply as an asset and doing the things to max value is a fools errand.

         4. Another point, many times the housing “Gains” are nothing to get excited about. Case in point. My parents paid $30,000 for their home 30 years ago. They can now sell it for $300,000. It would look like they made a tenfold profit. But the typical housing cost here is around $300,000. So after buying a new house with their big profits, they won’t have anything left over. Of course, they will be taxed on a $300,000 home now.
            The next time you get excited about your housing gains, realize that if all that has happened is the price of everyone’s home has gone up 25%, you are not better off. I bought my first house for $100k. It would appear that I made $30k because I can now sell it for $130k. But when I move I will pay $130k or more for another house, so it’s really just an emotional reaction.

         5. Having read the website, which applies to me, as I am Canadian, I agree and disagree. For the proper definition, housing is an investment. Like all investments, there are good and bad investments. Asset assumes value. All Rates of Return are zero until you cash in, that can be said about any investment though.
            They use Calgary, an example of Detroit, as a reason why housing is not an asset and was a bad investment. However, that was due to external meddling with the Saudis crashing the global supply of oil.
            For me, it makes sense to own. I own, and I rent out a portion of the house to help me cover the month-to-month expenses. Renting vs Owning costs roughly the same. It would be stupid for me to rent.

         6. That’s assuming they want to live in the same area. Most retirees move out of the area, or elsewhere.

         7. Practically speaking, yes, one can, and often does downsize in retirement. Just as I can sell my car and buy a scooter, and have money left over. That doesn’t mean I profited by owning my car. One is a clearly inferior product.

         8. Just to be picky Calgary is the recent one because it is a bit of a Shit show. Bit look at the examples of van and t dot.
            Again the area matters ur doing it the right way increasing the value by renting out the home u live in but most people don’t think that way they only think about renting part when it’s I really can’t afford 500K house but if I rent out basement I could just barely make my mortgage payments. That seems OK until u realize ur not going to always have it rented out and ur not paying down the mortgage.
            Just out of curiosity what factors are u considering that make it basically equal rent vs own?
            I know it would be cheaper to rent for me on an all in base but I don’t because I rent out parts of house which is the only thong that tilts the scale in favour of owning, plus I didn’t buy expensive luxury house just something reasonable that meets my needs.

         9. just going to say that one didn’t notice the name and two your definition of asset says assumes value house are valuable even it its just a dollar it has value.

         10. Calgary, Toronto and Vancouver are all the extremes. So it only applies if you live there really. I was considering moving to Calgary a while back, but I’m glad I didn’t. I feel sorry for the people who bought houses out there.
             Those examples you provided are people stretched beyond their means. My general rule of thumb I mentioned to @disqus_XZROw7mDfr:disqus is that your Mortgage payments should not exceed 25%-40% of your Net Income.
             Renting vs Owning. My expenses are utilities, taxes, insurance and mortgage payments. I stay on top of “all the small things” in regards to projects and whatnot to avoid “wallet-breaking issues” down the road. On a month-to-month basis, my ‘Cost to Own’ is around $1700, around half of my Net Income. If I wanted to live in a small bedroom in someone else’s house, sure I’d pay around 500$-700$ all-inclusive a month. A basement apartment would be around $1200/month and renting a 2 bedroom condo could be around $1300-1600. Any investments I make can be written off in my taxes.
             My rental income is around $1150/month, so about 67% of the ‘Cost to Own’ is already looked after.
             I’m not bashing renting. Both have their merits and drawbacks. Renting is good if you have precarious employment, have to travel a lot, you are a minimalist (as the article states). Owning is good if you want to have a family and are comfortable with the investment, challenges and rewards.

         11. that’s a good plan. and why I do it myself. but not everyone out there thinks things through.
             my home cost less than half of what the bank wanted to give me for a mortgage. running the numbers on what it costs to live plus that mortgage payment there would have been no way to make ends meet. but there are lots out there doing it not because the house they want makes sense financially or they have the money to cover it just that its new and shiny and they want. I cant remember the numbers but greater fool as it in the archives of the number of people taking a loan from mom and dad just to afford the down payment. if you cant save up the down payment you cant afford that house.
             the same data set showed even second time buyers were running back to the bank of mom and dad for the down payment on their second home. the number was above 15% and below 30% I believe. but that is a staggering amount of people that are not purchasing an asset.
             most people are people stretched beyond their meansthat’s why the debt to income ratio is worse in Canada now then the us right before their housing crisis. with almost half in situations that would leave them basically bankrupt if they didn’t get a paycheck for a single pay period.

         12. It’s not an asset to you if you have negative equity in the house (assuming your example of the house decreasing in value). At that point it is an asset, but for the bank. The negative equity may then become your liability.

         13. Close but no it is still an asset as the house has a positive value. Ur mortgage is a liability and will always be a liability until it’s paid off.
             Using ur example if u sell ur house with a mortgage larger than the value of the house u no longer have the asset, house, but u still have the liability the mortgage .

         14. Yes I still mentioned its an asset, but it is an asset on the bank’s balance sheet, while you are left holding the bag (i.e. the liability of the remaining debt)

         15. No it’s still an asset for u because u still sell it for money. It would be come a liability if you had to pay someone to take it. Look up the definition of asset equity doesn’t factor into whether something is an asset or not. The banks asset is the mortgage not the house the house is the security for the mortgage.

         16. There’s an excellent chance your parents can avoid paying tax on the appreciation of the low-basis house. See IRC Section 125.

         17. correction make that section 121

         18. factor in taxes and maintenance.

         19. 100%
             my folks were thinking of downsizing a few years ago and their dilemma was similar. Though their current house had some higher costs of ownership they figured they were better off sticking with it until it was really time to downsize.

         20. I do/

         21. I read the average time of ownership is 7 years or something like that. Whenever you move you’re going through a lot of trouble selling your house, closing costs and giving the real estate agent his 3% cut. You rent and you come and go fairly easily.
             Tom Leykis talks about this sometimes and brings up these points better than I can. his thesis is that the Spanish word for house and roots are similar. You don’t buy a house until you are FIRMLY planted where you are in career and more.

         22. well said

      2. But people can make money on anything. I can buy a comic book today and resell it in 10 years for a huge profit (or loss). That doesn’t mean the comic book was an asset. I’m an advocate of home ownership (for me, not for everyone), but one must keep in mind housing is a choice people make for decisions that are far different than investing or savings. In other words, perhaps you want to buy a house when it is a “sellers market” or you have another kid and need to move when it’s a “buyers market” and both times you get screwed.
         One can make a lot of money storing wealth in housing, and there is a lot of stuff in the tax law to shelter profits from housing, but a house isn’t inherently an asset or a good investment, although it can be. The danger is selling people on the idea of housing being great, and then when personal circumstances cause them to buy and/or sell at a “bad” time they can lose money.

         1. Of course the comic book you bought was an asset–that is the very definition of the word, something you own which has value and can be resold ( at profit or loss).

         2. I’m referring to a net asset–something that is worth more than its cost or underlying debt.

   2. I just bought a house and plan to rent it out after a year or so, couldn’t agree more with what you said the people I rent to will pay my morgage for me, pretty much a textbook definition of an asset

      1. You buy car to impress neighbors, depreciating liability.
         You buy car to get groceries and go to your 9-5 job, depreciating useful asset.
         You buy car to work an Uber gig, depreciating capital asset.
         You buy classic Ferrari, appreciating investment asset.
         You buy house to have roof over you head, appreciating (usually small) useful asset.
         You buy house to rent out, appreciating capital asset.

         1. actually the house (bricks and mortar) depreciates, while the land underneath appreciates. the house loses value because the useful life decreases with time as things need to be replaced or repaired and ultimately, demolished.

         2. It does, but maybe not at the rate the newer builds are. I’ve seen hundred year old homes with impressive structural integrity. The newer builders are trying to cheap out on construction materials.

         3. EXACTLY! It was never the house in the first place. It was and always will be the land! Except for renting, the house is nothing but a roof over your head at best; and at worst, a money trap.

   3. I agree with the overall statement that “houses are not assets” the way “oil is an asset / commodity”. Most people put little or no money down, therefore they have no equity in their home, it can take 5 years or so to break even on moving, sales commission, and other ancillary costs of buying a house, and the average person only stays in a house for like 5-7 years so for most people, houses are not assets. Just because it prevents you from paying rent money (which makes it a good financial decision) does not make the home an asset.
      A house CAN be a very effective asset, however. But they do not have the inherent quality of being assets the way other items do.

   4. A house is an asset, but throughout U.S. history residential real estate has tended to grow at <2%. In other words, about as much as a bank account.
      The exceptions (SoCal, NYC, or everywhere else from 2002 to 2008, etc) make people think otherwise.
      Rent for flexibility and freedom.

      1. So in other words a store of wealth, but not an investment (kinda like gold).

         1. A house is an asset in that it actively generates income by way of foregone rent. Think of it as inverse opportunity cost. Land is an asset because it is a finite resource and generally appreciates. A house can be rented to strangers for some of their money. #1 is obviously false.

      2. I pay off my house in 30 years, I live mostly rent free in retirement. So, I have to say its an investment. In the DMV, rent it above buying cost.

      3. Agreed, I’ve heard the “rent is better” many times before but nobody ever gives a decent argument for this. His final summation was that “renting gives you more freedom”. I have the freedom to re-model, freedom to add a deck, rent out my basement apartment, add fruit trees and a few dozen more blueberry bushes, freedom to grow my own vegetables.
         I have freedom to tear out walls and paint any color walls I wish. Freedom to add ceiling fans or sunrooms, freedom to add a deck, chop down an annoying tree. Freedom to build a chicken coop or small animal pen.
         I have freedom to build a garage for manly pastimes of building things, woodworking, car repairs or restorations.
         I get a 15 year loan and pay minimal interest. After 15 years I have a $400 thousand dollar valued home which BELONGS to me to do with as I wish–if I had rented a house in my area it would be $2k a month min or about $25k per year–totaled out would come to $375 thousand dollars over 15 years and NOTHING to show for it except simply existing/living/sleeping and storing my stuff

         1. Rent is better if you can’t afford to be tied down to one location for a long period of time. Also, owning a house can both be a debt pit and a profitable venture, all depending on many, many factors. Its not just a simple extreme one way or the other. The house I live in now has cheap mortgage. However, the roof is molding in all types of areas, lot’s of problems with the plumping, fences are falling in, foundations are rotting, etc etc. I dont own this house, I pay rent to my roommate/friend. However I will say that the amount he has to put into this house to keep it functioning is vastly greater then most rent and it will be 18 years before he see’s any potential return on his investment. He is 44, so this does not work in his advantage. Point is, owning is not always an asset at all.

         2. Sounds like he was an idiot for buying a piece of crap–or maybe it is simply a write-off type of situation for him

   5. Do you have any opinions on the Toronto housing market?
      Houses are upwards of 600k.
      Seems like a bubble but people have been saying that for years now.
      I’m afraid of getting into this market kuz I’ll be tied to it pretty much forever. No experience with homeownership, but I’m not afraid to fix things.
      Any thoughts are appreciated.

      1. Toronto is a poor and tough market. Same with Vancouver. Both are vastly overvalued, but there is no crash in site. Toronto and the surrounding municipalities are really the heartbeat of Canada, so it would be safe to say that a crash would come in the appearance of a plateau rather than a dip. Every year the ‘economists’ say there is going to be a crash the following year, but then the following year posts “10%+” asking price sales. It defies logic, but that’s the free market. People want to live in Toronto. But I don’t.
         In Vancouver, people are paying $2mil for teardowns, absolute insanity. I would never buy a home in Toronto (as I’m a fan of green space/backyards/etc) and get a tad clausterphobic, I would prefer to live in the surrounding areas (Ajax, Pickering, Oshawa, Bowmanville) or even as far as Milton and commute in on the GO or drive in. North of Toronto has the clogged 400&404 highways which are usually worse than the 401. Once that 407E extension is done, you can damn well guarantee housing in the Oshawa area will go up a decent amount too. Any transit hub would be good.
         My colleague who lives in Hamilton and commutes to here costs him about 2 hrs minimum in traffic. He started carpooling with a who goes roughly the same area as we work and he actually spends less time in traffic since he takes the HOV lanes AND makes money back. Ride-sharing is the way of the future.
         I’d honestly say, there is never a right time to get in the market. Look for an older place, one that is obviously structurally sound, but needs some elbow-grease. Stuff you’d be comfortable doing yourself. Buy outside of Toronto if possible or in a place that could be “up-and-coming” in the future. If the place has a basement apartment with a separate entrance, that’s even better. Next place I buy, I’ll definitely be looking for that. A good rule-of-thumb is to make sure that your mortgage is approximately 1/4-1/3 of your net pay. Whatever you get preapproved for, try to aim for under that (I paid 5% less than the maximum I was approved for). Do a good background check on potential renters, investigate their Facebook, linked-in any social media posts. I’ve denied potential tenants based upon their online demeanor before.

         1. Thanks for the thoughtful response preciate it

      2. DO NOT BUY in Toronto or any place in Canada for that matter. You are wedding yourself to a place that is extremely liberal and probably getting more liberal/SJW infested in the future. Buying isn’t just an economic decision, it is also a political decision. Just another benefit of renting, you can quickly press the “Eject” button.

      3. How about Hamilton?
         Still affordable compared to snooty Toronto but lot’s of character and fixer uppers where you can put your “sweat” equity into it..
         economy seems pretty solid too. Lots of investing going on..

         1. Hamilton and anywhere east of Scarborough/Ajax are the last bastions of affordability within/near the GTA. Depends on where you have to commute to.

      4. Build a small home – as in 700-1000 sq ft. using insulated SIP wall and roof panels. They can be build within a 10 hour day, but the real upside is that they come installed with windows, some partially dry walled, and roughed out for plumbing and electrical.
         – https://www.youtube.com/watch?v=WQJFTObnSRo

   6. Agreed. The problem that many people have is that they live well beyond their means and do not plan for potential problems. A modest home or condo will allow you to build equity while providing you with some nice tax deductions that you don’t get as a renter. Typically you can save several thousand dollars a year by owning a property that is comparable to an apartment that you might rent. If you stick to a budget and don’t buy more than you can afford, you can live very well on not too much money.

   7. It’s an asset in the sense that you need to live somewhere and it’s a solution. It’s a liability in the sense that you need to maintain it and it’s harder to move away if you have to.

   8. Do you have any idea the time it takes to maintain a house, even if you are proficient with the know-how? Say goodbye to a huge chunk of your free time (and it still costs a lot of money in the materials)

      1. I actually do, because I am a home owner. You learn to stay on top of these small projects before they pile up. The most expensive things would be redoing your roof.

   9. I think there’s some confusion here over terminology.
      An “asset” is anything that has value. Your car, TV, sofa, whiskey collection are assets.
      All investments are assets, but not all assets are investments.
      Your car, TV, sofa etc are depreciating assets. They lose value with time and use. You want to minimize the amount of depreciating assets you own. They just cost you money.
      An asset like stock or a stake in a company is an asset and and investment. It’s value (should) go up over time. And it doesn’t cost you money to own.
      A house is subject to interpretation. It’s certainly an asset, but is it an investment? It usually will appreciate in value.
      But if you’re not making an income from it I would not qualify it as an investment. the way I look at it investments don’t eat your cash every year. Your house costs you plenty of cash each year to own — maintenance, mortgage points when you buy, interest, home insurance, title insurance, property tax, the list goes on. Hell, property tax alone in California bleeds off 1% of the assessed value of your house each year. In Texas the effective property tax is nearly 2% year year. Add that up. In 10 years in TX you will pay nearly 20% of the value of your house just in tax. [Brings me to another point — if you have to pay the gubmint “rent” each year just to “own” your house, do you really own it? Rhetorical.]
      Total cost of renting usually is materially lower than total cost of owning. That means the money you save by not owning a house is free for investing in assets that offer a higher return (like the S&P 500), generate dividend income and don’t cost you anything to own. Best to do the math for your neck of the woods and see which option comes out ahead. Given today’s prices and rent rates, that’s probably renting. Unless you buy a duplex and live in half of it.
      There is a psychological benefit of owning a home though. Your mileage may vary.

      1. You have to pay the gubmint rent each year whether you are renting or owning a home. For renters, costs are passed onto them. Do you think a land owner would pocket the loss themselves? This is why I laugh when more levies or taxes are loaded onto condo building owners. Do we really think they’ll pay them? Nope, the occupants will pay them.

         1. Supply/demand curve. The higher the price (for any reason) the less demand.
            Yes, increases in property tax are passed on to renters. That increases the rent price, which shrinks the pool of renters. It also puts margin pressure on the landlord, who for supply/demand reasons may not be able to pass on the full cost.
            I’ve rented for years. My housing cost is lower than it would be if I owned. I’ve invested the savings in the market and come out way ahead.
            Given what I pay in rent, I’ve calculated that my landlords have made a 5% return per year on their property at best, and probably lower.

         2. All of what you’re saying is true. But are the savings really worth it if at the end of the day the opportunity cost of renting is lost-investment? 5% per year is still really good. Even is it’s 0%, someone else is still paying their mortgage for them.

         3. It’s a question of which alternative delivers the highest return. Dollar for dollar, investing in the market usually beats investing in your own house.
            “Even if it’s 0%, someone else is still paying their mortgage for them.”
            Sure, and they are building up equity slowly. But they’ve also sunk plenty of capital into the house. That’s capital that probably would earn a higher return elsewhere.
            There’s no answer that fits every situation. You have to do your own numbers. But I realized some time ago that the mantra “you gotta own your own home or else you’re just pissing money away” is false much of the time. If you invest the cash freed up by renting chances are you’ll come out ahead, way ahead.

         4. Not in my area. Housing has been, and will still be booming for some time. For my situation, I’m living in the home and renting the home thus negating the cost of having to rent. 67% of my monthly expenses are accounted for by rental income I generate.
            The market has been quite volatile. Unless you’re god-tier at playing the market, or have an excellent investment manager to look after it for you, I’ll stick to real estate in the mean time.
            But again, to each their own. Whichever gives you the best return on investment, stick with it.

         5. Real estate is a funny thing, an emotional thing.
            I’ve never understood why people buy vacation homes. By definition it’s empty most of the year, a capital asset generating no use or return. Even if you rent it out it’s a hassle to manage and you have to worry about it. And unless you find long term renters (which means you can’t use it yourself) you’ll lose money on it. Plus maintenance, property taxes, mindshare and all that crap. Not to mention all the capital you’ve tied up in the house almost certainly could earn a higher return if placed in a low-load Vanguard 500 index fund.
            Financially speaking it makes more sense to rent a summer place for a few weeks a year. Then I can choose wherever I want. And when you’re done, you’re done. No worrying about it.
            I think people get a non-financial return from owning luxury items. “Hey I’m the sort of successful person who owns two homes” kind of thing.

         6. You speak a lot of truth in that. Vacation homes, nowadays, are for the rich anyways or for the people who bought one a long time ago. It’s better to rent a cottage up north and live there for 2 weeks for $1500 instead of buying one. A lot of people on our lake do that. My parents rent a vacation home down in Florida for fairly cheap during the winter months, and in a nice gated community on the west side.
            Unless of course you build everything yourself, like my Dad. He bought a cottage for $5000 back in the 70s way up north (about a 4 hour drive from home). Similar cottages are in the low $300,000 range. The original builder clearly didn’t know how to hold a hammer as he found “interesting” anomalies along the way, for instance, no support beam above a 4’W x 5’L window overlooking the lake. He built the thing up from scratch over the years, mostly as a pet project. Added a guest house, boat house, and about 10 years ago we added a sunroom which really brightens things up there. They spend roughly 4 months up there per year. The joys of retirement.

   10. Buying and renting out rooms, doing up the house is my plan. I have to do it with family, as will struggle on my own. I recoup money on equity and not throw it away paying off someone else’s mortgage. I can then save my share of the rental income to build up a deposit, coupled with equity from the house I’ll then be able to strike out on my own.

   11. Hi Canuck, the question of whether a house is an asset is something that economists, financial planners and accountants all deliberate over. Some say yes, others say no, as a $400 000 loan on a house will end up costing anywhere between $750 000 to $850 000 to pay off over 30 years. It is a large debt for most people and over that time property prices may increase to where you can make a small profit, but it is not going to be a cash generating asset (unless you lease a spare room or something), and if you do sell then you still need somewhere to live.
       That is why a lot of people see housing as an expense, or at least a liability.
       Then you have maintenance costs, land tax etc of maintaining a property and as something tying up a significant amount of people’s income a house limits flexibility when chasing other career plans as you may not be in a position to relocate as freely.
       Using $400k, depending on interest rates this could cost between $2 800-$3 200 per month. In this time a person can rent a nice place for $1800 – $2000 per month and place the difference (say $12k) into income generating investments. Assuming an 8% p.a. avg return over the 30 years it would grow to approx. $432k. This can be a good base for more income generating assets, and using this money could continue to fund your accommodation into retirement as you are not reliant on, or move to a cheaper country. It provides more options as opposed to a house.
       Not saying one is right one is wrong, just different ways of setting up for retirement, with the second option being less stressful and offering more flexibility but requiring more discipline with spending and significant commitment as investments can go bad.

       1. Those numbers you’ve stated are quite high. This again depends on the interest rate you lock in at the time which is inversely proportional to the selling price of the home. Price is obviously not the true value, but it is a function of such.
          For me, I’m slated to pay approximately 39% of the purchase price in interest payments over 25 years. Over the past 2.5 years, I’ve made additional modest prepayments and now I’m I’m down to paying 34% of the purchase price in interest payments instead of the original 39%. In that span of time, I’ve managed to reduced 25 year mortgage to 23 years, and am hoping to have it reduced to 17 years on my current financial plan. By doing so, I would be charged only 25% interest on my mortgage over the 17 years instead of 39% over 25 years.
          Doing the calculations, for every $1.00 I put into my mortgage principal, I get an approximate return of 3.69%/yr which is substantially better than the 0.5%/yr I get at my bank with my savings account. This return is solely due to the reduction in interest on the mortgage you would be paying anyways.
          Since I bought my place, average housing prices in my area have increased about 30%. This combined with the 3.69%/yr savings in interest payments, my rate of return since I bought the place is about 14.94%/year! Again, this is ONLY if I’m looking to sell the place, which I’m obviously not. On the side I’m covering about 67% of the “Cost to Own, Monthly Expenses” (mortgage, insurance, utilities, property taxes) by having just 2 renters on board. I plan on doing this for as long as I can in an attempt to get ahead.
          Home ownership isn’t for everyone, and I can see that both renting and ownership have their own merits and drawbacks. But for me, I’m in support of ownership.

   12. You’re still paying property taxes even after you pay it off. As I like to say you are always renting even if it’s to the State!

       1. Doesn’t matter. You’re still paying the landlord’s property taxes when you’re renting too! You think landlords don’t pass down 100% of their costs to the tenants?

   13. In my large West Coast city the median home price is $536k. Assuming I can manage a 10% down payment a 30yr mortgage at 4% (incl prop taxes) will run me about $2,720 per month. Ok, so I’m out of pocket $53,600 for the down payment and now $32,640 per year to pay the mortgage. On top of that I now need to budget maintenance costs of about $8,000 per year (assume maintenance cost runs about 1.5% of home’s purchase price).
       Alright so after the first year I’m out of pocket around $94,000 (53.6+32+8). The house is worth $557k if I assume the long term 4% appreciation in real estate applies here. The mortgage principal is at about $473k after 12 payments, but selling the house would only yield me about $515k after the realtors and tax man take their cuts. So I have about $42,000 in effective home equity. Meaning that after a year my net worth is now ($52,000) [(94)+42=(52)]
       Suppose I rented instead. I could easily get a 1BR/1BA apartment for about $1,500 a month. After a year I’ve spent $18k in rent. Meanwhile the $53.6k I would have used as a down payment is invested and earns, say, 7% and grows to just over $57k. BUT I also save the difference on what I pay in rent versus a mortgage ($1,220 a month) and end up with $14.6k saved after a year. I also save that $8,000 in home maintenance costs.
       To summarize, after a year of renting I have a net worth of over $61,000 [(18)+57+14.6+8] in liquid assets. After a year of homeownership I have a net worth of ($52,000). I’m better off by a difference of about $113,000 if I rent.
       Just my take. YMMV

       1. Your math does make sense to me. I guess living in different regions the home prices and taxes will be different.
          The mortgage rate is significantly higher than mine (2.79%), my maintenance costs are nowhere near that high. They’re probably around $1000/year.
          I rent an additional 2 bedrooms in the home to cover 67% of my monthly expenses. And I’ll continue to do so for a long time.
          I’m not too proficient at the stock market, so 7% ROR seems like a pipe-dream to me.
          I made sure to go under my maximum pre-approved amount before taking on a mortgage. Ensure your maximum “cost to own” expenses do not exceed 40-50% of your net income. I went for a smaller “starter” home. 1200 sqft, 3 bedroom, detached. Home selling price was approximately 7.23xYearly Gross Income.
          Cheers, and have a good weekend.

3. I agree that in today’s world, the time to take on debt is when you are starting a business that is on the cutting edge. If you don’t start it, someone else will think of the same idea and start it before you while you are saving up the money.
   It can also be reasonable to take on debt for starting more regular businesses, but you have to make sure you are making quite a bit more money than you are spending, including your bank payments. I know this as I have been doing this with real estate. Simple, any man with average intelligence or higher can do it. The key is getting the cheapest bank loan you can, and getting the best deal on property that can be found. Patience is the biggest must and willingness to work hard is equal.
   Plus, you might have to have a second hjob, which sucks and might bkeep you in the corporate world for a while.

4. Yeah, political correctness rings a bell. I made the following video ad for the company I worked for. I also did another, ‘charming’ one. They liked the charming one and found this too offensive. My boss literally said: You can not show a woman fart. Look how the girls reacted. I mean, I like it, but it did not pass the housewife test.
   
   (click CC for rudimentary English subtitles)
   As for loyalty, I spent 7 years with this company, doing a job I hated – I am a programmer and I was usually designing newsletters, mostly just switching the title image. When I quit, my boss called me illoyal. Wanted me to stay with them, telling me I could ‘grow with them’ and all that shit. Later he sued me for ‘hacking’ his database because his server failed and he was too inexperienced with technicalities and too keen on teaching me a lesson (?) to bother letting his new programmer investigate the real cause of the problem. Police took all my computers away for that half a year ago and I am still far from getting them back. Loyalty, my ass.

   1. Holy shit, I really hope you get that sorted and can sue for damages and loss of income etc. good luck!

      1. Thanks, but fuck it. It’s just stuff. I recently saw him on the street (he did not notice me, reading his smartphone) and considered saying something or beating him up, but somehow my gut told me that that is a good opportunity to let go.

         1. Are you ‘manwithoutafather’?

         2. Yeah, without the ‘a’ though.

5. I don’t think anyone is spreading lie #3. If anything, it’s quite the opposite– Debt is great! Buy everything on credit!
   Not all of us have enough money for a startup and borrowing can speed up growth. You’re much better off borrowing some money to start an intelligent business than you are sitting back and waiting a couple years to save up the income.

   Something like 80 or 90% of business ventures fail. When your business fails, and you must find a job in order to meet your day to day living expenses, do you also want the problem of past debts for a failed venture that you must pay back looming overhead? I’d happily accept the “slower growth” that comes with saving up my own funds, and then if it fails at least I’m not in the hole and can start something new more easily. And this is coming from a guy who has borrowed a LOT of (secured) money in the past. Debt is incredibly dangerous.

   1. I get calls from my Bank trying to get me to increase my credit card limit. I refuse every single time. Why would I want a limit 5x greater than what it is now? Just so you can charge me 25% if I don’t pay it in time?

      1. Hihi yeah I am wondering the same thing. But I guess a sucker is born every second so it pays off for them in aggregate to spam everyone with that garbage..

         1. I keep my limit at a measily $1500/month. The overwhelming majority of my expenses are just gas and groceries.

      2. Zero balance our credit cards every month. Suckers make basically no money off of us, at least directly through interest.

         1. Same here. Anyone who carries a balance on a credit card has to be an idiot. Probably where these banks make their billion dollar profits every year.

         2. Quite right. I’ve never understood why people would voluntarily carry a balance, outside of maybe being in such a tight state due to temporary job loss that you are forced to in order to eat. Even then…hard for me to stomach that kind of thing.

         3. Exactly! I zero every month and I don’t pay an annual fee on my student visa so they aren’t making any profit from me!! Although you do have to keep in mind that they charge the vendor a tiny percentage of every single purchase so they are still getting income every time you purchase something. Limit your (credit card) spending to limit their profits.

         4. I’ve been paying off credit cards every month for 2 decades. There is no sign the banks hate this and every sign they like getting the transaction fees and the money in a timely manner. They make less on people like you and me but it’s very low risk.

         5. So why do you decline the credit increase if you manage your credit card so diligently?

         6. It also serves as a means to protect myself from CC theft.

         7. Letters asking if I want a credit card go straight in the bin.

         8. Usury is promoted. The West is drunk on it.

         9. Much to the delight of the tribe that invented it.

         10. It’s far safer to shred or burn the applications and any letter bearing your name, address, any kind of “reservation code” and an invitation to apply by phone or online. A network news report way back demonstrated that identity thieves got credit cards in others’ names even after re-assembling torn-up applications they fished out of trash cans and submitting them as their own.

         11. True. Besides usury, there has been a gradual “Hebrew-ization” of our culture. Take away the mask and study the real Jews and you see that that mindset has been promoted and now embraced in our country for some time now. Christianity is the exact opposite of Judaism, and that’s why it started. . .To stop the Jews from degrading humanity.

      3. The only advantage of having a high credit limit is it keeps your debt utilization ratio low. I never carry a balance, but if I have a $15k limit and charge $1,500 during the month, I will only have a 10% debt ratio when the credit reporting agencies look at my history.

   2. Was thinking the same thing. Getting a business loan = a high risk idea.

   3. Agreed. Debt should be avoided as much as possible, even for ventures that can (potentially) produce returns greater than the interest rate.
      I tell anyone who will listen, if you want to start a business, start small or as a “side hustle” before racking up debt and quitting your day job.
      Suppose you love to cook and want to start a restaurant (a bad idea but for the sake of example). Start off doing some catering first. Then maybe get a small storefront and do some takeout. Then go to full-service when/if things take off.
      Leasing that 10,000 square foot restaurant & banquet hall and scratching your head when nobody shows up…bad idea!

      1. That is how I see my gardening to farming transition

   4. My father’s business was great in the 70’s and 80’s, but after the recession he got into massive debt because he expanded too much and that debt crippled him for the next 15-20 years. All the profit that his business was making had to go to the bank instead of in his pocket or in retirement funds.
      Nowadays banks want serious collateral for startups as well, so chances are you will be putting your home on the line too. I know of plenty of people in my area that risked the family home for a failed business venture and lost it.
      20-25 years ago when employment was more stable and house prices were lower you could make up for the loss I suppose, but not anymore. That’s one reason I will never run a business or get married. If I lose my house, I could never replace it.

   5. That’s why you should borrow only “unsecured” but unfortunately, not many people have access to that kind of financing. You really have to be in the top echelons of this corporate facism in order to obtain debt that you can walk away from, worry free.

   6. Which, is why Aaron Clarey argues for low capital investments. I’m currently building my ‘Fuck You’ fund. Once that’s complete I’ll be looking for low capital investments to pursue.

      1. Always – I do the same thing..

   7. Marc Cuban said it best: “If you borrow money to start a business, you’re a moron.”

   8. As a business owner and consultant I can’t agree with that firmly enough. There’s like a mania in our culture where small start-ups don’t examing creative financing or building on their means. Most start-ups think they’ll borrow their way into prosperity. The reality is just the opposite. Most that I’ve counseled don’t even understand developing a business plan. I stress a business plan, re-written over and over, because it forces them to brainstorm and think out-of-the box.

6. Let me give you a small advice from an entrepeneur and landowner. First, rent it´s like bang a whore while thinking she is your girlfiend, and second, never use debt to start a business, debt it´s only to grow it faster.

7. I’ve learned you have to dumb down your resume in modern corporate America. The last thing any career manager wants is an employee that knows more or is more competent than himself(or herself). There is a complete disconnect between the owners and top management with the people that actually do the work.

   1. That’s not true if you’re in IT. Don’t know about other professions though.

      1. It’s true in construction that’s for sure!

   2. Yeah, I used to work for a Private REIT and those institutions are the SHADIEST things on earth, basically stealing a bunch of $$ from retired folks. I blew the whistle and had a rock solid case that the SEC looked at for 2+ years but then decided not to pursue it. Anyway, the point being, that the REIT typically hired a bunch of idiots for the *explicit* reason that hiring anyone with 2 brain cells to rub together would result in said person blowing the whistle and calling out the extreme corruption (myself being the case-in-point). Word to the wise, do not invest in private REITs and if you or your family own any shares, get out ASAP.

8. Currently I have my own RV. I own it 100%. I do rent the space, but it’s relatively cheap, the utilities are free, which means I don’t use gas, and I have a laundromat onsite. It helps that I’ve been single for the past 3 years and don’t plan on dealing with the pains and aches of being engaged again for the time being.

9. Fifty-five years ago, when I was a teenager, I read an article to the effect that, of the world’s then-current slave population (This was 1958, when just about everyone thought slavery had been finally abolished!), taking away that minority who had been born into slavery, more than half of the remainder had fallen slave because of financial indebtedness. At that same time, I was hearing the complaints of an aunt who was the chief office-person in a scrapyard, about the paperwork she had to do when a laborer got garnisheed. When she told me what garnishment is, I wondered then how one could stand the shame of it without wanting or committing suicide (Yes, back then I was immensely naive).
   There is more, but learning what I learned since then, has made me HATE* nothing less than the very state of financial indebtedness, to the point of considering interest (really the fee for renting another person’s money) paid out, to be a P E N A L fine for lack of impulse-control.
   (*Friends tell me I have the broad vocabulary of a literary scholar, Whether or not that is accurate, in all the breadth of my vocabulary I none the less lack words accurately to express the depth, breadth, height, weight, and heat of my hatred for the very state of financial indebtedness, regardless of the identity of the debtor.)
   Forget the anti-Sicilian ethnic slurs about loan-shark collection methods. The laws of most states give the creative creditor the ability — figuratively, metaphorically — to take a debtor apart.

10. I would suggest you rent. Now before there was a negative association with someone who rented.

    Perhaps the “Tiny House Movement” should be considered. You pay a lot less for a house so you own it outright sooner, and you can move it wherever you wish to be.

    1. “and you can move it wherever you wish to be”. This has more value than most people realise. With all of the forced “multi-culturalism” going on, your neighborhood could be turned upside down in a heart beat. And you have absolutely no control over that. The value of your asset will take a hit accordingly. Being able to relocate said asset is a Yuge deal.

       1. With all of the forced “multi-culturalism” going on, your neighborhood could be turned upside down in a heart beat. And you have absolutely no control over that.

          Indeed… some of the stuff coming out of HUD, or heck, this suicidal rapefugee resettlement program is reminiscent of the forced busing of the 1960s-70s that destroyed so many good areas.

    2. Haha would totally love to pick up my “tiny house” and move it down the road away from a theoretical neighbor I got sick of.

11. As most mortgages see you paying at least double the value of your house back, the very last thing it is, is a good investment UNLESS the real estate prices between the time you buy it and the time you sell it skyrocket and create value in your house MORE than you paid for it and only then IF you’ve factored in inflation. $400,000 today is going to be more money, man hour wise, than $400,000 30 years from now.

    1. Or you pay it off ahead of your mortgage, but let’s be real; who pays off their mortgage ahead of time? Not many.

       1. True, still, most people will pay on it for quite a few years before paying off the note. I just don’t see the “investment” angle as realistic, as for most people it is the opposite.

          1. Yup, that’s it and your first comment is dead on the money.
             Unless someone plans on owning to rent it out, it is not an investment, it’s an expense.
             Further, many argue that your cost per month on the same property is not much bigger if you pay off a mortgage as opposed to renting it, however they ignore the fact that usual break even on a property is after 5 or 10yrs, so until then you owe more than the market value. So you lose all your freedom for that period, and even after you have just been paying rent essentially, then you still have the whole actual value to pay back.
             I was smart enough to have an insurance against loss at sale, bought in 2008(yeah I know…) for 175k, paid 5 yrs of mortgage plus 20k upgrades including full new kitchen, it went for 125k in January 2015.
             So basically we paid 42k+20k into the house, and it lost 50k in value, and the mortgage was still underwater at that point, the insurance had to absorb about 20k sheer loss or there about.
             Don’t do it, freedom is more important than having a house you can call your own.
             Edit, my numbers are off a bit, but I can’t be bothered to dig up the papers… It’s close enough.

       2. Depends.
          If you’re a landlord, you have no reason to pay it off ahead of time. Interest is an expense that can be written off to lower your taxes paid on the rental income generated from the property.
          I for one am paying down the principal faster than I thought. I hope to have my house paid off in 14 years instead of 25 years. And that’s with just a small additional monthly prepayment, and that’s just me living by myself and not with a significant other contributing.

          1. We did that too. It’s amazing how putting a certain amount above the payment towards principal helps over time.

          2. Indeed. If only people read their loan docs, the Truth in Lending clearly tells you how much you’ll pay over the entire life of the loan if you pay minimum P&I. Just pull up any amortization calculator and add in additional principle and see how much sooner you pay it off and how much interest you will save.

    2. Almost didn’t recognize you there after your avatar photo change.
       Not quite, but depends on the interest rates. I’m slated to pay approximately 24% of the purchase price in interest payments over 25 years. With the additional prepayments (just in 2.5 years) it’s now 21% of the home value at purchase.

       1. So if your house costs $100,000, over the course of 25 years you’ll only have paid $125,000 total?

          1. Yup. The rates have dropped since I bought in a few years back, but they’re hovering around 2.59% for a 4 yr fixed rate.

    3. I’m not so sure you could unequivocally say that a dollar today is going to be worth more, man hour wise, than a dollar in the future. One possible scenario is that even with the growing population, robots will essentially do the majority of the “real” work. This will allow for governments to print massive quantities of fiat currency which could in turn lead to massive inflation of real assets (in fiat currency terms). So the interest rate on a 30 year mortgage isn’t properly considering the true time value of fiat currency given the potential of robotics and AI to take productivity to new highs. Now as for the question: will the general population be better off under this scenario? That’s an entirely different can of worms. Apparently material abundance leads to a nation of lazy bums, ugly obese women, and a general lack of motivation to reproduce due to the sheer inability to get it up.

12. A house is the only type of asset which requires you to immediately buy another one of you liquidate it. Assuming you aren’t going to downgrade to a smaller house or an apartment, any gains realized by the sale will be rolled into the down payment and price of the new house. The system is designed to do this because if you try to pocket any of the money from the sale you get hit with huge taxes, so to avoid this cost you will be “encouraged” to spend all the cash on the new house. And the cycle repeats.

    1. Yes. And why? Property tax. It’s a huge, huge thing. Even renters pay property tax. And a person that pays property tax cannot truly go MGTOW or even be independent enough to buy a plot of land, raise a garden and give the finger to the government. Every single living person who lives under a roof will still be hooked into the system in some manner. Quite ingenious really.

       1. Well you COULD, but you’d have to go up north off the grid in a wooded area. I know of tons of hunting cabins without electricity where people hang-out off the grid doing under-the-table work and avoiding all taxes.

          1. Wooded area doesn’t sound like “personal property”. I know people can live off grid, I meant to do so without having to build a cabin out in the middle of a remote part of a national forest.

          2. There are ways around reducing your property taxes in that regard.
             In Canada, your property taxes can be nearly zero IF you do lots of forestry management on your property. The gun-club I’m apart of is an 1800 sqft building on a 55 acre property in a fairly high-value area, but the property taxes they pay are near zero because they help maintain “green space”. Which basically means, if you cut down a tree, plant a new one.

          3. Right, but I’m talking about the U.S., not Canada. They’re absolute terrorists about squeezing you for every drop of blood they can.

          4. As a % of your gross income, what are your property taxes like? Mine are around 5-6%.

          5. Really, really high (prefer not to get into too many details, I’ve given way some info online out that can be correlated, but not enough to identify where I am specifically). We live in a rather posh area, so they tackled us heavy with property taxes. This was NOT the case when we moved in. The school district is so wonderful though (seriously, strange in this day and age) that we shrugged and said “Ok, we’ll stay until the kids are out”.

          6. I think churches are exempt from property taxes.

    2. I had thought here in the US, if the house was your prime residence for 2 out of the 5 years and you sell it, you get tax free gains of $250k single, $500k married. If under 5 years, you’ll need to roll that profit into a new higher home to avoid capital gains tax.

       1. This is right. I made $54k on a small house I lived in for six years and didn’t have to pay a dime to the goverment. Sold for $168k and am now renting a 1 bedroom apt. One of the best decisions I’ve ever made.

       2. It doesn’t even matter though because due to mortgage amortization the bank gets paid first. Your first 15 years of payments go more towards interest than the principal, so you aren’t really paying off the house during that time. Assuming you sell within 5-10 years like many people, you’re still paying off almost the full value of the house.
          The housing market grows at an anemic 1.5% per year, so after 10 years that’s only a 15% profit, but you still owe 90%+ of the house’s value, plus any of the home improvement costs you rolled into the loan, plus all the other labor, maintenance, and property taxes over the years.
          You’re definitely going to roll that extra money into a new house because now you need somewhere to live, and your girlfriend/wife isn’t going to move to a smaller house. So you get a bigger house with bigger payments and the cycle of debt continues.
          Now if you are savvy enough to pick a house in a location that won’t go to shit in 30 years (trickier than you think) and you pay off the mortgage FULLY, then you can sell, use the cash to buy a new house outright without a mortgage, and pocket the difference. But most people are not smart or disciplined enough to do this.

13. Renting makes sense until you want to raise a family, plant a garden, raise some dogs, chickens and goats, have a garage to tinker, build, or butcher game, etc. Save up, pay cash, or at worst only do a 15 year fixed rate mortgage.

    1. “Renting makes sense until you want to raise a family, plant a garden, raise some dogs, chickens and goats..”
       WW III is in the air. Best to be free of a bunch of minor responsibilities.

       1. Better to invest in guns and water purifiers then.

          1. I started my first batch of homemade hooch last night. Two weeks until I don’t have to give money to the greedy liquor corporations ever again (being a little hyperbolic).

          2. Exactly.

          3. You don’t know that half of it haha. Up here in the Liberal Stronghold, we pay 40-50% taxes on booze. I make homebrew myself too.

          4. I have cannabis seeds in the mail. Tired of paying for something I can grow out back.

          5. Next I need tobacco seeds so I can grow my own pipe tobacco.

          6. Pretty sure that private tobacco cultivation is a legal gray area in the US. Just a heads up

       2. Yeeeeah, I’m not a Chicken Little prepper. Besides, I have guns, food. and water in my small rental now. If WWIII comes anyhow, ain’t a garden and livestock going to be super important when the food supply shuts down?

          1. Pretty sure the whole point of Walking Dead was to show how f*cked we are without food security.
             Garden, livestock, guns and a compound are the 3 most important things you’ll need.
             EDIT: 4 most important things

          2. You listed 4 things…just saying. Heh.

          3. So is counting!

          4. Heh, just saw yours.

          5. Gotta be faster on the draw there, old man.

          6. I’m actually doing what they call “work” today. Weird, right?

          7. Totally….work? Is that like cake?

          8. It’s this really gross thing that is totally putting me out. These people expect *way* too much! heh

          9. Oh….so, more like canned asparagus. I think I’ll pass.

          10. Don’t underestimate the value of canned asparagus in a revolution. It was always the first thing Pancho Villa seized when he took a town. True fact.

       3. You can do both. If WWIII hits, whether you own or not and the banks opinion of it won’t mean anything. With a real home you can store things that you might not want to, in an apartment.

          1. You do own your house, but not really the land/parcel it sits on. You really only lease the land from the government. You pay property taxes twice a year. You don’t, they confiscate it from you (evict). You are free to do almost whatever you like on the land.

    2. I never saw a lease that prevented one from doing any of those activities you mention. Even if the lease expressly prohibited them, just find another place. You know how many landlords just want to find a decent long term tenant? A lot.

14. Social Security is a Ponzi scheme.

15. I recommend renting for the immediate future for the time being. Housing is still in a bubble right now as the bailouts in 2008 only kicked the can down the road.

16. So true about the sadistic boss part. We have a boss at my work that is evil. I mean she truly enjoys effing with people. I have seen so many people use this outdated “classy” business way of dealing with her like it’s the 1970’s and it always blows up in their face.
    The problem is that this mindset of be super respectful or this or that is the proper way of expressing your grievance, this is business etc doesn’t work if the boss him/herself doesn’t meet those standards.
    Every single person I know that gets along with her straight up told her to *[email protected] off. They didn’t get fired or anything and she is bearable after you put her in her place without going too crazy. I pretty much called her a troll and that she’s a terrible boss and now we are fine.

    1. Sadistic bosses are awful. So are incompetent ones that pick “favorites”, and fuck you if you’re not the “favorite”. Went through that once and it was a horrifying experience. Needless to say, the company and I parted ways.

17. Renting is nice I don’t have to worry about replacing anything that breaks and I have
    a gym and a indoor pool I can use.
    It’s just not worth it when most homes in my area start at $100,000 or more and with
    taxes I just can’t afford it.

    1. try to live in California, houses in my area start at 500k.

    2. $100,000? Man..
       Your basic 3 bedroom suburban house here in Sydney is between $500,000-$800,000. Some are breaking above a million.. it’s just absurd.

18. Real estate USED to be a good investment (and still could be) but not in America. With the universal adoption of the IRCC, overly invasive (and armed) regulatory committees, and an absolutely insane tax code, there isn’t any visible benefit from holding land in the long term in the U.S.
    I do believe that land investment in other places in the world (specifically in certain areas in South America) can be an excellent choice for a wide variety of reasons, most people neither want to put in the effort nor are they in a good enough financial position (i.e. a couple thousand dollars in liquid assets) to be able to take advantage of those kinds of opportunities.
    Long story short, I agree that the best you can do for yourself is to live minimally. Minimize your possessions and minimize your bills. Buy a decent fourwheel drive truck and put a camper on it. Like the author says, live within your means and look for those opportunities to expand yourself outside of them. Good advice.

19. How about:
    “Paper will always be more valuable than metal (ie gold/silver)”
    For the past 20 years every “Dick” and Joe has swallowed this notion hook, line and sinker. Even people in my close entourage who still laugh about it but will soon enough be crawling and begging for a favour. But you know what they say: “Talk sense to a fool and he’ll call you foolish”.

20. “For most businesses today profits and productivity take a distant second and third to political correctness.”
    No. Maybe in one of the “too-big-to fail mega corporations”, but most people are employed to small-medium size businesses. Profits matter. Sitting down with HR and going over a list of employees who we can fire to cut cost is a reality. Been there on more than one occassion.
    Hard work is usually rewarded with… more hard work. You need to be completely mercenary in mindset and remember that your loyalty is bought from pay-check to pay check. Always be looking for a better gig. Don’t get drawn into office politics/ drama. Keep your colleagues at arms lenghth, but remain cordial. Be honest with your boss and fullfill your obligations in a timely manner. You might get his respect in the long run as you are reliable, but it won’t save you when it is time to lose bodies (especially if you are a white guy). Never accept a position repoting direclty to a woman– it will always end with bad blood.

    1. What will save you when it’s time to ‘lose bodies’ then?

       1. Nothing. Despite what the author believes, if a company is struggling they have to cut payroll and you need to assume management is incompetent and will save their cronies second and their own ass first.
          I would recommend building up experience with people who actually turn companies around. This means going into a place that just got flattened and working building the strucutre back up after a company runs itself into the ground. You learn alot and then you can eventually go independent once you have enough experience (and confidence) to complete paid assignements. As this is a “feast or famine” type lifestyle, I would aslo recommend picking up a trade if you are still young– it will keep you fed between assignments.

          1. How young are we talking to pick up a trade?

21. The modern fraud: http://www.unz.com/mhudson/traumatized-worker-syndrome/

22. Corporations don’t give a rat’s ass about you most of the time. At the place I work for almost all the workers are hired on a casual or short term basis, and the only ‘reward’ you get for being a good worker is that they don’t fire your ass or extend your contract for another 6-12 months. Wage rises? Forget it! Promotions! Hah! Management is completely incompetent and when they are fuck up, which is often, guess who is blamed? Yep, the lower orders.
    As for a house not being an asset, that is true unless you plan to sell it in the near future in an inflated market. The house I bought in the early 00’s has gone up so much, but unless I sell it I won’t really get the benefit from it.
    The other issue with property is that you have to worry about taxes and upkeep, the costs of which are always always increasing. And upkeep is especially important if you buy another property later and choose to rent it out in a competitive market. Unfortunately for me I live in an area where there is plenty of competition to buy property but the demand for rent is much lower.
    My advice to anyone that is thinking of renovating their house to go with materials that don’t date as much. Don’t get anything too fancy or modern. My uncle renovated his kitchen 25 years ago and it still looks great today because he went for a classic style.
    Overcapitalising on your house is a huge mistake that a lot of people make, and they often go into major debt to keep renovating every 10-12 years too.

23. Corporations reward hustlers and those who bring in profits by any means necessary. Don’t work hard if there is no light at the end of the tunnel.In this world you’re your own person.

24. BUT if you rent an apartment, you still have to pay the rent. It increases every year and it never end.
    Buy a house now, 30 years later, you have a house.
    Rent an apartment, 30 years later, what do you have?

    1. Better yet, buy a decent travel trailer and live in it for a few years saving a huge chunk of cash to buy your house or live elsewhere.

    2. Do you really have it, though? Or are you just leasing the land from the government via ever increasing property taxes? Bear in mind that they can come and take it from you whenever they want, and compensate you with whatever rate they set.
       That’s stretching the definition of the word “ownership” imo.

25. When you get that loan for a business venture and it takes off you better make sure you always do everything to the letter of the loan. If not the bank will take your company. I once dealt with a start up on a project I was working on. Their previous successful company was lost in just that way. They had a small cash flow issue and *poof* the bank took their successful business. Taking venture capital money has other issues with regards to losing control of the business and the fruits of it.
    Also credit has hidden the great decline in the the middle class. Most everyone borrows a lot driving up the prices of things like homes and college education. The result is that it leaves people who live on a cash basis at a disadvantage. So more take on the shackles of debt.
    I agree that #2 is a lie. Hard work’s reward is more work. A house is an asset. There are lots of assets that make money and lose money. An asset is something you can sell, something that has a value. Not all assets increase in value not all assets are free to hold. The lie is that property values always go up. The problem is that homes got sucked into financialization. That they became just another financial product and as such became volatile and risky. Even losing money on real estate tends to be cheaper than renting. I say this as someone who would be in big losing position if I sold today. In fact it might be best if I keep this place and rent it to someone.

26. Buy Land that produces food that will allow you to live from and to sell to create income. Build a simple house on it if it is not there yet. If possible avoid making unless you know you can live AND pay your debt with the products of the Land you are buying. Keep your life simple, minimize expenses at all costs in all areas, and work towards maximizing your income from the Land. When you are done with the payments, keep living simple and minimizing expenses. Be wise, and pass on the knowledge, the Land and the money to your male child if you have one. If you do not have one, pass it on to some man who has demonstrated to be worth having it and who will protect it, live simply, and maximise the income from its products…

27. I was talking with the coin nazi the other day. That is, the coin shop owner where I buy my occasional silver coins. We both agreed there are no good investments that are obvious. I call him jokingly the coin NAZI because the 1st time I went in is shop 13 years ago, he was talking about future race wars. Most of the expansion in stocks has gone to people like Nancy Pelosi who is now worth several hundred million thanks to insider trading. For the rest of us, there is little opportunity out there for placing any surplus money we may have coming from hard work and thrift. Interest rates make bank savings futile, stock market is rigged, precious metals also manipulated. (Also, who is to say they do not have processes for turning other metals into gold and silver that we do not know about).
    So I think a small house is a good investment. Land also good. Better to pay a mortage than to pay rent. Also, once you have a mortgage, you have an ok place to invest. Paying down debt. I own my own home and a townhouse I could not sell and that I rent out. So when I need a place to invest, I just pay down debt on that.
    Guns, gold and silver could be ok. But I am worried about the gun avenue now with Scalia gone. Cash hoarding could be wise, but when negative interest rates force us to get chipped and thus make cash hoarding impossible, there will be no opportunities left.
    The system really is closing in on the little people. Yes, I am still doing a little prepping, but at the end of the day, GW said it best.
    “You can run but you can’t hide”.
    There are no good investments. Just pray.

    1. “So I think a small house is a good investment. Land also good.” Why? Most people can’t do anything with that land anyways.

       1. It is real. I personally am into self-sufficient micro-farming. Am looking to build a 19 century style farm house with minimal solar power, wood heating stove, just enough to power a stock freezer. Sort of bug out type emcampment to also work at on week-ends. Eventually trasnsition from large gardening to small farming.

    2. I had a friend ask me after Obama’s first election what would be a good investment and I told him what I thought, “there are none.” Democrats have been signaling about seizing private retirement funds for a few years now. It’s going to happen eventually. Best you can do, if you are just a regular Joe, is maintain what you have and if you are thinking long term– gold (precious metals), ground (even if it is farm acerage with little property tax) or guns. They will always have future value despite whatever fiat currency is being peddled.

       1. Well put..

    3. I thought about the rich and insider trading yesterday. Virgin America’s stock popped like 40% on news the company would be bought. Now imagine how much money someone made buying a few thousand shares just before that pop.

       1. Sure most of the money went to insiders

28. Amen brother! Been there and done all three of these. Very true words written here. I’ve been the guy, and ive seen other guys be passed over for a protected class. I left federal govt employment because affirmative action was running at full throttle. No matter my years of experience, my education, and my glowing recommendations, I was passed over for protected applicants right out of college. Now i work for myself and make even more. Believe in yourself, use your current employment to build your skills, start stuff on the side, f**k the stock market unless your trained in it. Money invested in ventures where you have skill and experience will return far more than 5% invested in stocks.

29. buying a house on credit in the very bottom of the market is a damn good use of debt. House loans are very different than say loans against stock. You have a much more stable renter cash flow, you dont have to sell if the asset goes down in value, and if you fail to pay it back you are still pretty ok.

30. I disagree more with this article then I agree with unfortunately.
    Renting vs. Buying
    The relationship between these two is an inverse one. When the housing market is “bad” for home owners then it is good for buyers. The reverse is also true for renting. When the housing market is bad for prospective buyers then it is good for landlords seeking to rent. If you are renting when the market is bad for prospective buyers you are going to get screwed on rent as the market is going to drive up the price of rent. If you rent when the market is good is prospective buyers then you will make out. Simple supply and demand.
    Now if you need flexibility in housing and geographic location then you should rent. Period. If you are younger you should probably also just rent as you don’t know where life might take you, if you might upsize or downsize, or if you need to jettison expenses due to trends in employment and unemployment.
    If you are more settled into a geographic area and employment then buying is most likely your better option especially now that homes have been depreciated and mortgages have historically low rates. You will most likely make out in the long run as you will build equity faster because the interest on your loan in low. Also you will save money month to month as your overall loan payment plus reasonable home maintenance will be less then writing a landlord a check every month.
    Both, however, are crap shoots. You can’t predict the market or your job prospects. If you get an offer for a promotion but the job is 100 miles away in a different city and you own then you have tons of complications. If you rent then you just hand the landlord the keys, maybe pay a penalty or just lose your security deposit, and move. Or you could buy something in a transitional neighborhood, put some money into renovations, and end up selling it after living there for five or six years and net $50,000.
    Also, if you buy as opposed to renting, it takes a lot more to kick you out of your home. If you lose your job and can’t pay rent, chances are your landlord can get you evicted in a matter of months. If you own, it will take the bank years to foreclose on your mortgage. They might even offer you a “settlement” whereby you can adjust your loan, get some debt forgiven, and still stay in your house. An eviction does not wreck your credit per se but it does get you put on the renter blacklist. Bad credit decisions fade with time. Evictions do not.

    1. Typically with low interest rates, prices go up. It’s the affordability month to month they look at more than the price. There is this equilibrium. Higher price tend to have higher property tax as it is a percentage of the value.

31. Lie 4: The financial system is fine. Really the banks can create money out of thin air, then charge interest on it, central banks print/create money like a water fountain, this debt is what enslaves us all.

    1. You slave away each day to build up a decent amount of fiat currency in your account that could become worthless in matter of days.
       Inflation makes your savings dwindle. It also makes your existing debt worth less as well.
       If you have high debt, the last thing you want is deflation.

       1. I feel crypto currencies can solve this, yes there are limitations with bitcoin, but enough people do get on board then there could be truly a sovereign financial system, or just start using gold n silver.

          1. I don’t think so. What is it backed by? It’s like trading Pokémon cards.

          2. It is, but people are in control, not banks or any central authority, ultimately with new technology things are going to be more decentralized, eventually making things obsolete !

32. Great point about a house not being an “investment.”
    It isn’t.
    Investments do not eat your cash. They appreciate without eating your cash, or they generate cash, or ideally both.
    By that definition a house is not an investment.
    I did the math on renting vs. buying. I found that although I lost out on home appreciation by not buying, the freed up cash I did not invest in the house appreciated in the stock market more in the long run than a house would have in even with conservative assumptions. Add to that I don’t have to sink property taxes and maintenance into the house. In nearly all scenarios you come out ahead with renting.
    Warren Buffet basically said the same thing.
    But that’s not an absolute. Do the numbers yourself, then make your own bets.

    1. What IS the point of home ownership? To live in a nice suburb? To go along with peer pressure?

33. Best thing to be in life is self sufficient as much as possible. Living in a caravan or sleeping in a car is better than having to rent and dealing with landlords who are cruel. Corporations are no place for free spirited people who value happiness. Trades, self employed are the way to be. Be able to be self sufficient and deal only with people you who treat you well will make you a happy person. Happiness first.

34. “Lie 1, your house is an asset”
    This doesn’t have to be a lie. I know some people that make great deals when renting, like for example I got a friend that chose to live like 20 minutes outside of the city center, he got a huge house in beautiful nature, and only pays 2000 SEK a month.
    My main experience in life though is that you lose far more money renting than you do buying, if you own your own home, assuming you don’t make a stupid purchase, then your costs will be far less than what you would spend paying rent.
    Also, the worst thing right now going on is people buying overpriced homes in places were demographics are quickly changing and soon those house prices will reach Detroit prices…..

35. Useful article for the most part.

36. I pay off my house in 30 years, I live mostly rent free in retirement. So, I have to say its an investment. In the DMV, rent it above buying cost. Tax credit helps too. Just makes no sense to rent. Its basic math.

    1. You never own the house. If don’t pay taxes the city can and will take it from you regardless if it’s paid off or not. It happened to many people during the great recession.

37. #2 is something that took me a long time to get my head around and understand. When I got my “dream job”, and to be fair was a really great opportunity, another person was also engaged as a specialist, this person did not have any skill sets, but their father had a friend in a position of influence. They did the same job as me on nearly double the pay at the time. Through hard work and sacrifice I was able to climb higher, however I would find myself not gaining opportunities because the company preferred to promote women.
    I addressed this head on with a manager who said “well women have not had it as easy as males, and to get to equality quicker, even if a male is more appropriate to be qualified we need to give the opportunities to women to catch them up. You will claim this as discriminatory and yes it is, it doesn’t matter how good you are you are paying for the price for your ancestors”.
    Working hard does not get you promoted or engender loyalty, business operate for either the bottom line in tough times (everyone is expendable) or the triple bottom line in good times for public relations. You do need to be competent or you eventually get found out (or promoted to someone else’s problem), but promotions and firm loyalty does not happen on merit, it is the relationships with people in the firm as they will promote who they like. Sometimes personal politics of very skilled long serving employees get pushed out the door just because of some personal grudge and they have the power to remove you.
    Best advice is to use lie #3 to live beneath your means and work out how to invest additional money to gain assets so you can look after yourself. Also, don’t be afraid to move around, as someone who passed up a great opportunity for more pay with a new company out of “loyalty”, the company has not repaid that decision.

38. Whenever you mention the mortgage vs rent thing it will always bring out the people who have saddled themselves with 30 years of debt who want to convince everyone else that what they’ve done was smart. Home ownership, which was a clever ploy to increase consumerism and support the American dream, is an outdated idea that so many Americans refuse to give up on. A 30 year mortgage turns you into a debt slave regardless of how you look at it and that is exactly what the rich want the masses to be. 2008 showed how transient the so-called wealth of a home can be. Your home is only worth what some other person is willing to pay.

39. Some good and some questionable advice. It’s very true that pinching pennies, brewing your own coffee instead of buying Starbucks, etc. is all fine and dandy, but that is the poor man’s way of thinking he will get rich. It will never happen by conserving alone – focusing on more income AND a minimalist lifestyle is critical. And yes, too many corporations will throw you right under the bus the second they no longer need you – even to the point of contesting an unemployment claim, should you find yourself in the position of filing for one. Scumbags like that don’t deserve to be in business.
    But this article loses me by categorically dismissing home ownership. Depending upon the property, owning a house or condo can be a good way of recovering most of what you would have spent on rent when its time to leave. Rent payments are money you will never get back, period. You don’t need to go over the top when buying, just get something, ideally, that you can rent out to somebody else if the time comes when you are ready to move but not yet ready to sell. You can’t do that with an enormous McMansion with a gigantic monthly payment no renter could afford. These fools who think they’re winning by renting all their lives are throwing their money down the toilet.

40. About wealth:
    1) A home is only owned when you do own it. If its not paid in cash, you do not own it. If other people (like your wife) have any claims on it, you do not own it.
    What if you are married or want to marry?
    You own an offshore company (can be in delaware or nevada too) and said offshore companys only business is owning this house, without debt, AND there is no big property tax to be paid. Then and ONLY then you do own da house even if you are married (and she tries to divorce rape you, perhaps one day, who knows? Better be save than sorry the wise guys say)
    It is good to own your own house. Its a foundation and home base. Very much advised to do so.
    2) Debt.
    Debt is a terrible thing. Except it is not. Only for one (!) part in this transaction.
    If you are in debt and are broke – the shit is on you.
    If you are in debt but have a lot of money – the shit is on the guys who own your debt. You can play them. Pay back as it suits you. Negotiate favorable conditions. Do carry-trade stuff, where you borrow cheap and invest in high return countries.
    In short: Debt sucks for the poor sucker but rules for the rich motherfucker.
    3) Coporations reward hard work! If you own the company. Then and only then. If you think you own your company but are not quite sure; the “house” rules do apply. Most people who do own a company do NOT own it at all. Some bureaucrats in DC own their asses and can close it with a pencil if they see fit. If you own your company it is not based in the country your ass sits in and it is not subject to any single goverments greedy fingers. Then and only then you own your company and should invest your lifeblood into its growth.

41. We part ways on Number One. An owner-occupied house is most certainly an asset. The homeowner who can stay put for at least five years, and who keeps the mortgage current, will almost certainly have a lower monthly housing cost (net of debt amortization, which increases equity that is the asset in this equation) than his neighbors who are renters, even with upkeep factored in.
    Amortization builds capital which can be re-deployed in more profitable pursuits any time one wishes to sell and downsize, or to rent instead. The renter, on the other hand, has nothing to show for his outlays except for a pile of cancelled checks.
    Now if you had argued that a house is not an investment, we’d be in 100-percent agreement. One’s capital is almost invariably better invested elsewhere. Our own anecdote illustrates the point: We’ve owned our house for 16 years, and it has nearly doubled in value over that time. Impressive? Nope: It works out to an average annual return of about 3.2 percent. If making money had been the sole objective, we’d have been far better off sticking the cash in a measly money-market vehicle, never mind stocks or bonds!

42. Can’t say this enough. . . Women and their bullshit got us to the Red Pill, but they’re only the tip of the iceburg. The rest, lurking under the water, is how we’re controlled and manipulated by our having to deal with our personal, household economies. Most of what we’re brought up believing about making it in our “free economy” is bullshit. Big corporations and the people with the MOST money want us to believe in and play by their rules. Regaining our masculinity is part of getting out of their whole game and becoming independent thinking and acting human beings. The Red Pill is comprehensive and involves EVERYTHING! Examine Consumer Culture and how it affects you, and how you can be Alpha in relation to it.

43. The first lie is not in all true , it is hard to buy a house and try and to maintain it if you have no knowledge about fixing anything, as a person who like to do things and my father being a construction worker has taught me various this such as plumbing, easy carpentery work, welding, painting,working fiber glass, ext.
    In this day and age fixer uppers that are going on action are the best bet , but to do so you need fast cash and knowledge of these things , and working at a desk at a firm does not give you the understanding to fix a house and most people that do that sort of thing usually don’t go home to paint their houses , they go play black ops on there x box , and are the people that usually have thee horrible experiences with houses.

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