Quote:
Originally Posted by Topless
Another fallacious strawman argument PL. He has to live somewhere and the total costs associated with owning his home were lower over time than the total costs associated with renting an equivalent property over the same period. This freed up more cash to invest wisely in Berkshire. 
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an equivalent property. That's right. There is no rule that says you can only rent the equivalent property you intend to buy. I'm not sure why folks in the rent vs. buy debate always frame the comparison in this way, 'equivalent property' is the only situation where costs are lower. There is such a thing called down-sizing: In all other situations you can rent a dwelling that is 2/3's the cost of the home you intend to purchase. And often, that's still renting a much bigger property than the one you would be living in as a home ower err I mean home owner, usually when the rental owner has long paid off the property or simply inherited it -- they aren't passing down all the costs straight to the renter. Or in other more recent cases, the rental owner purchased a foreclosure, paid it off in barely 10 years (or less) and can charge below market to secure a good, reliable, well-employed tennant.
Also, the total costs to rent was indeed higher in the long term for Mr. Buffett.
Now what about the return Mr. Buffett would have made had he simply rented a less-expensive-to-live-in property and invested the savings over 30 years into the S&P if not Berkshire? Since '65 he would have made 38X's as much with that savings in the S&P or 10,300x's as much in Berkshire. The point is what you saved on renting in being a home owner (and only in the 'equivalent home context') has cost you dearly as saver/investor in that time horizon. Home ownership forces too many to divert far too much of their income into their bank's coffers and not into their own net-worth. You will will always have more time under the belts of your investments if you rent because you'll have more wiggle room after expenses. And time is the the crucial make or break for maximum performance in most asset classes.