981 the new 986 ?

[Perfectlap]

Originally Posted by RandallNeighbour

Our entire society is moving from ownership to renting personal use items as if they were a temporary service. Software is now sold as subscription based through the cloud. Cell phone "purchases" are now paid by the month so they can be upgraded frequently. We pay for TV reception. Call me an old fart, but all I see is a culture determined to live for today with few avoiding the trap of the ongoing monthly payment for most everything.

AHNC...(All hat no cattle).

The interesting thing to me about your statement here is that the one thing they ought to be renting...namely their residence, in order to to have an adequate portion of their income left over each month to secure retirement income, is often the only debt they're serving towards eventual ownership 30 years later. The rationale for this is often the belief that its a great investment...but only if you are oblivious to all the other investments that could have been made with the delta between the rent these AHNC's were paying and the full costs of carrying a home for the lender. See the chart below where the bar for house prices fall..to the right...way right.
And since the only investment the average home owner makes is their home, that red bar becomes easy to understand.
Me personally, I'm leaning hard on the bars on the extreme left while avoiding any interest carrying debt...be it credit card, auto or mortgage.

[Porsche9]

Originally Posted by Perfectlap

AHNC...(All hat no cattle).

The interesting thing to me about your statement here is that the one thing they ought to be renting...namely their residence, in order to to have an adequate portion of their income left over each month to secure retirement income, is often the only debt they're serving towards eventual ownership 30 years later. The rationale for this is often the belief that its a great investment...but only if you are oblivious to all the other investments that could have been made with the delta between the rent these AHNC's were paying and the full costs of carrying a home for the lender. See the chart below where the bar for house prices fall..to the right...way right.
And since the only investment the average home owner makes is their home, that red bar becomes easy to understand.
Me personally, I'm leaning hard on the bars on the extreme left while avoiding any interest carrying debt...be it credit card, auto or mortgage.

I love people that rent! I agree in many cases a house to live in is not a very good investment. But owning rentals if done right is very lucrative. Like almost any investment it's all about what you pay for it. While others were fearful to by houses it was a great time to buy them and rent. I purchased a few houses at the deeps of the housing market just on the basis of the immediate ROI, rents versus carrying cost figuring that appreciation may or may not come. Having said that I also invest heavily to the left of the table too. Here too wise timing of your investment can make a huge difference. Energy/oil right now is likely to fall in the category of wise time to invest in the near future.