Re: Buying vs renting

Homes as an asset have certain legal protections, especially in tax and
bankruptcy codes. Stock assets do not share the same level of protections.
More importantly, I wouldn't make too many assumptions about FoRK culture.

Greg

On Wed, Feb 28, 2018 at 11:33 AM, Lucas Gonze <[email protected]> wrote:

> This conversation has been surprising.
>
> The USA Today articles represent a pretty solid consensus. Home values rise
> more slowly than the stock market, therefore you should grow your net worth
> by moving assets over. I expected the hardcore rationalism in FoRK culture
> to reflect this.
>
> Instead, not a single person is living in accordance with it.
>
> Arbitrage opportunity? Or is original math wrong, and how?
>
>
> On Wed, Feb 28, 2018 at 8:09 AM, Lucas Gonze <[email protected]>
> wrote:
>
> > That all makes sense but the last part. His friend's estate would have
> > been worth more if he'd taken the month by month savings and put them in
> a
> > stock index fund.
> >
> > On Feb 28, 2018 7:24 AM, <[email protected]> wrote:
> >
> >> I've read the responses and the best example I have is the following:
> >>
> >> My father joined the US Navy straight out of High School along with
> >> his best friend.  They both served in the USN for 20 years and both
> >> retired with full benefits. They both got married at around the same
> >> time and they both had 2 kids.  They both were rotated around the
> >> country every 2 years.  The major difference is my father always
> >> bought and sold a private home (every 2 years) when changing duty
> >> stations.  His friend always stayed in on-base family housing paid
> >> for by the USN.  When they both retired to their original home town,
> >> my father had bought his home outright ($185,00.00).  He didn't have
> >> a monthly house payment for a 1600 sq/ft house on a wooded 1 acre lot.
> >> His friend also bought a similar house ($165,000.00) 5 miles away on
> >> similar property and had to pay $1024.00 month out of his
> >> retirement,  (which my father  didn't have to do).  My father, with
> >> the savings, was able to  buy a boat and RV, his friend just scraped
> >> by.  When my dad died his estate was worth approximately $425,000.00
> >> and when his friend died, his estate was worth around $35,000.00.
> >> I find this was the best argument for buying over renting (when
> >> renting was free in this situation).
> >>
> >> Regards
> >>
> >> Sent from my IBM Selectric III
> >>
> >> ----- Original Message -----
> >> From: "Friends of Rohit Khare" <[email protected]>
> >> To:"FoRK Rohit Khare" <[email protected]>
> >> Cc:
> >> Sent:Tue, 27 Feb 2018 22:00:27 -0800
> >> Subject:Re: [FoRK] Buying vs renting
> >>
> >>  > On Feb 27, 2018, at 3:03 PM, Marty Halvorson <[email protected]>
> >> wrote:
> >>  >
> >>  > Despite Tom's excellent thoughts on the subject, my observation is
> >> this: All the money spent renting is benefiting only the owner of the
> >> rental unit.
> >>
> >>  Presumably you get use of the unit you are renting. The common
> >> fallacy of renting as “throwing away money” is predicated on the
> >> renter and the owner having an identical cost basis for the same
> >> place. This assumption is rarely true. Renting is often a way to split
> >> the difference between your cost basis to buy and the owner’s lower
> >> cost basis. In such cases, there is literally no way for you to come
> >> out ahead by buying the same place no matter how you try to explain
> >> the numbers unless you are loaded with cash (which is probably a bad
> >> investment of said cash). And this is the case more often than not in
> >> the US.
> >>
> >>  I find the arguments that some people gain emotional or psychological
> >> benefits from buying more compelling than arguments for financial
> >> benefits. Of course, the calculus is a bit different if you plan on
> >> living in the place you buy for the rest of your life. Admittedly, I
> >> have not gotten to the “last place I am going to live” stage yet.
> >>
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> >>
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> >>
> >
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