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07-29-2018 07:07 PM
I just hope the younger people today (notice I did not say "millennial" ) will remember that years from now, when they retire, they may or may not have medicare. Even if they do have the benefit of medicare, the supplemental health plan is quite a hefty price. Not to mention, life insurance, car insurance, and if they own a home, there will be homeowners.
I am grateful our home is paid for because we could not afford to pay for all of our insurance, medicines, and our small luxuries if we had to pay the rent being paid in our area.
There is something to be said for the comfort of knowing you have a place to live when you are old.
07-29-2018 07:22 PM
We were out to dinner with friends who just sold there home and had been happy to have sold it for over $100,000 more than they paid until ..............their son who is a very bright guy in the finance world ran the numbers.
Mind you their son is a millennial who makes a VERY good living and is very against the "shackles of homeownership" although he does invest in commercial real estate on the side.
He ran the numbers of what his parents spent on:
interest on the loan
up-keep- new hot water tank, new roof, appliances
and of course they are in the "hole" there is no actual profit.
Their son and his friends can not comprehend the idea of buying something that you have to continually pay taxes on every year you own it, in addition to all the other on-going expenses. From a financial business model it does not make sense to them.
It was an interesting and sobering perspective on how times are changing.
As many have pointed out, there is no free lunch. Pay into a home and have something handed back when you leave (even if you only break even or actually 'loose' money), or pay rent for your whole life, and still walk away having paid out a ton of money with nothing to show for it in the end either.
The market in which you buy, then sell, the money you choose to/have to invest in maintenance etc. will be different for everyone, and many will see great gains, others will not, but renting isn't for everyone. Some of us like having something we can do with as we please and something we can eventually own.
Everything costs money to acquire and to maintain. Homes, cars, 'toys' (like boats, motor cycles, second homes at the beach or mountains, RVs, jet skis,) electronics, etc. There is upkeep, maintenance, insurance etc. to just about anything we own.
Some people like to have things, some like experiences (travel, moving to different places and experiencing different types of living etc.) some like and can afford both.
In the end, nothing is a bad investment if you love it, enjoy it, have fun with it, share it with others. You can't take it with you, the stuff, the money or the experiences. It all stays here. So people should put their money into things they enjoy and love, which will be different for different people.
Life is so much more than a financial business model.
07-29-2018 07:38 PM
I choose to look at owning a home in a different way. Yes, there are expense's of owning a home like tax's and up keep, but I don't want to give my money to a landlord every month and I love having my own home and 5 acre's of land. Rent's in my area are outrageous. Why would anyone choose to give a landlord money every month when they can own thier own home?
In our area, you can indeed own a home for much less per month than rent.
I know renting has it's advantages, especially at certain times in one's life, but it feels very uncertain to me, when I rent. I can be removed at any time, the rent can increase terribly, and the rules for being there (no pets, number of people allowed to live or stay with you, etc) may not always be what I want or need. Renting often means moving more often for many people as rents increase, something else I'm not a fan of.
07-29-2018 07:57 PM
@Retired08 That was great advice to your daughter/husband. Don't always count on two incomes, after all, they may want children some day and decide that one needs to stay home. It's very expensive to pay for child care and sometimes it just makes better financial sense for one of the parents to put their career on hold for a few years until the child reaches school age - if they even choose to go back to work.
If individuals like to travel and put their funds into experiences instead of a big home, then I wouldn't recommending being "house poor". I am in that situation with a bigger house then I need, but absolutely fine with it, since I didn't want to move after a separation, I adore my house, and am more then willing to write that mortgage check each month.
I think many of the "millennial" adults expect to have the big beautiful home that their parents have, not realizing the small dumpy apartments they may have had along the way before the children came and they became more financially stable. I call that the "everyone gets a trophy" syndrome.
I know my niece was looking just a couple of years ago, at apartments with her best friend, as they both just graduated college and thought it best to rent together, as they both had new jobs and were heading out on their own for the first time.
They were horrified they couldn't find an affordable apartment with granite counter tops, and two spa like bathrooms. They both really and truly expected to walk right into a living situation at 23 years old, just like they walked away from in their parents two high income, thirty year earnings/savings/building upscale home.
I never expected what these kids today do, at that point in life. Even my own son, who was raised so realistically and we didn't provide cell phone, car, car insurance, spending money, electronics etc. isn't doing a very good job about wrapping his head around the fact that he has to start at the bottom and work his way up in just about everything in life. He has some notion that six months into a job and he should be at the top, and is truly frustrated not getting anywhere faster.
How did we not make an impact on much of this younger generation?
07-29-2018 09:04 PM
Some people who rent may just want to wait until they marry so there will be the benefit of two paychecks before making the commitment to have a mortgage. Nothing wrong with that.
07-29-2018 09:54 PM
Living in Indiana if you have a wife and kids you are silly to rent. The house we sold was four bedrooms and 2000 square feet. Yes it was built in the 70’s but it was updated. We have had 6 houses go up for sale this past spring in that neighborhood. All of them had offers in 2 days or so. Its a very nice subsivision. Houses go anywhere from 120k to 168k. It would cost 1200 or more to rent a smalll crappy house or a 3 bedroom apartment. If you bought a house in that price range your payment is going to be well under 1k. Plus the houses are big.
There is a young beauty vlogger i watch. She iust bought a house and will use it as a rental If she wants to move.
07-29-2018 09:56 PM
Oh please!!...The 2500 sq ft house that we bought brand new 26 years ago is worth more than double what we paid for it in 1982. When we sell we get to keep the equity. When you rent you only take your personal items.
In addition, though we still have a mortgage on our 4 bedroom, 2 1/2 bath house and pay a little over $1,000.00 a month what can you rent for that today?... even in a lower cost of living area?
We got almost triple from our house we bought in 1978.
07-31-2018 11:34 AM - edited 07-31-2018 11:38 AM
Deducible expenses will change greatly when filing 2018 returns. Hopefully the increase of the standard deduction will help most tax payers who will lose those itemized deductions-except maybe those in high state/local tax states.
I have always thought childless folks should get some sort of deduction just for not having children. Or like a one time payout for not contributing to the population, paid after one has reached a certain age or has had surgery so one cant reproduce.
07-31-2018 11:52 AM
There are some fine millennials indeed. I've watched several grow up in my neighborhood and they are wonderful, productive young people.
I think it's all how you were raised and the values instilled in you as a child.
My amazing parents were raised during the depression so I grew up appreciating how hard they worked to provide for us. I think I must have passed that to my girls - not to the same degree as my parents, but enough that they know you work for what you want.
However, on the flip side, I also see a lot of young people who can't understand why they have to work for what they want.
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