Re: Buying vs renting

Thanks!

There were a number of companies I could have stayed at, and perhaps should have.  Early on, I left GE to be close to my toddler.  
For a long time, I could get great contracting positions working on interesting projects at companies that wouldn't hire me directly 
because I didn't have a degree.  As a result, I gained wide and deep experience much faster than staying at a single company.  Since 
I wasn't in California, Boston, or NYC, that was likely the best path I could have followed.  If I'd known anything, I would have 
taken a Greyhound to California in 1983.  I don't think I knew what Greyhound was; I certainly never saw a Greyhound bus.

Ohio's OK, but I'm glad I didn't stay tied to a particular locality too long.  We built a nice custom house then moved to DC 2 years 
later.

I've picked up a few hobbies too.  Haven't been able to afford flying for a long time though.

sdw

On 2/28/18 1:57 PM, Ken Ganshirt wrote:
> Thank you, Stephen.
>
> My motivators are largely different. But they would be articulated in a similar manner.  Like you, accumulation of wealth, for me, is invariably directed toward some particular end – learning new skills and affording the tools/toys to exercise them (eg. Woodworking, motorcycling), travel, etc.
>
> I spent most of my working life at the same company. But there were so many opportunities for personal challenge over the years that I never felt any great need to look elsewhere. Any time I started to feel like it was time for a new challenge all I had to do was look around and there usually multiple opportunities.
>
> I also discovered early on that you do not need to be outside of an existing business to have the opportunity to create “startups”.  I was fortunate to work in a modest sized telco. Our size meant we were big enough to want to capitalize on new technological opportunities and small/quick enough to be able to make it happen.  Not in the same category of risk that is your forte, but certainly sufficient to get the juices flowing.
>
> Also like you, ensuring my kids will have what they need to be successful, however they choose to define that, has always been a big one for us.  Our older daughter recently decided she wanted to finally pursue her long held desire to become a teacher. This meant a significant life “disruption” for a woman with a husband, a decent job and 3 kids. And a related financial hit, of course. It was a great pleasure that we were able to help her obtain that goal, both financially and time wise (childcare).
>
> Her journey began two years ago. She called this morning to tell us that she has her first job, substituting on Friday in a kindergarten French immersion class. Not a world-beater but a nice place to start and for all of us it’s gold.  It was a great pleasure to see her willing to take the rather substantial risk and to help reduce it a bit.
>
> As it relates to this thread, we bought our retirement home in 1976 and are still living in it, now in our retirement. I won’t pretend we planned it that way. But we did have the rent/own discussion back then and have never seen any reason to question whether it was the right one.   For us.
>
> It was quite nice not to have to deal with monthly accommodation costs as part of our retirement budget, which allowed us both the luxury of retiring earlier than we otherwise might have.
>
> Lucas, I have no idea whether I am your typical FoRKer.  But I haven’t the foggiest idea what that is anyway.  ;-)
>
>                ...ken...
>
>
>
> From: Stephen D. Williams
> Sent: February 28, 2018 2:01 PM
> To: [email protected]
> Subject: Re: [FoRK] Buying vs renting
>
> It's not just about financial balance when you die.  But even there, finances aren't just about housing appreciation vs. savings,
> although for many people that is what it comes down to.  If you take the long view, it might be much more important that your
> children are doing well: well adjusted, great careers, extremely resilient.  It might be much more important that you had a full and
> interesting life, for making or at least attempting to make or supporting those making lasting contributions.
>
> I've always either had / chosen / been compelled to put most of my resources on raising children well and furthering my skills /
> career / business ventures.  Plenty of waste (mostly by others that I failed to stop) and mistakes (esp. being very close to
> massively benefiting but not making the right final choices) were made.  But some great successes and far better positioning than
> would be expected at every point, especially now.
>
> Overall life success is far more important to me than having a big house I don't need or money I don't know what to do with.  I do
> have specific plans and direct skills for constructive use of money as I earn it, but part of doggedly pursuing continually renewing
> those skills is part of why I don't have self-funding to use them in the most constructive way.  Ironic, but typical.
>
> Everything is an investment of some kind for some direct or indirect purpose.  If I had no ideas or skills, I would invest in the
> stock market.  If I were more pessimistic about the ability to turn skills / experience / ideas / energy into growing startups, I
> would invest in the stock market instead.  My optimism and anti-fear ethic leads me to take the riskier, but more interesting and
> potentially more lucrative path while still supporting enough investment in children and other aspects of life / relationships / self.
>
> I can begin to visualize hierarchy a la Maslow's, combining ability to generate surplus with life goals, abilities and interests,
> and tolerance for pain, grit, risk along with need for novelty, creativity, constructiveness, meaningfulness, adventure, etc.
>
> One vector is this:
> Risk / reward ranking, earning wealth through:
> 1. Technical founder of well-positioned and timed startup
> 2. Joining a rising startup.
> 3. Working at a solid corporate job.
> 4. Buying stocks, bonds, etc.
> 5. Buying real estate.
> 6. Renting, saving when possible.
>
> On other vectors: freedom of various kinds, creativity, interestingness, meaningfulness, temporary or lasting impact on the world, etc.
>
> sdw
>
>
> On 2/28/18 11:33 AM, Lucas Gonze 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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