imagine owning a stock called CASA, and when you sold it..
- You were charged 15% commission by the brokerage firm
- It took up to a year to find a buyer for that stock
- There's no public exchange, so you had to market that stock yourself or hire an agent
- You had to spend several days filling in forms on both purchase and sale end
- Had to insure it for $1000s a year
- Minimum purchase price of that stock was > $250,000 so forget diversification in other stocks
- You knew CASA only appreciates a few percent a year. Highest return you'll see is 10%.
- You know it could decrease in value, as much as 50% in a year. It's shown this trend in the past.
Would you, or anyone for that matter, still buy this stock? CASA is not just some fictions creative writing. CASA is exactly what you're doing when you buy a home or condo.
I often hear from friends that they're tired of "throwing money away on rent", they're "Going to buy as an investment". Having owned and sold several properties (first one I bought at age 24) I try to talk them out of it. It's irrational to solve throwing money away on rent by throwing more money away on ownership.
This is unusual about housing - there is no other asset that comes even remotely close in frictional costs for an exchange.
The other considerations with home owning that you don't get with other investments:
1) risk of being sued
2) risk of someone suing you for unrelated reason, and going after your property since it's a public record asset
3) huge amount of time spent managing the little aspects of the property, and the closing of the purchase and sale (dozens of hours in that alone)
4) risk that the market could totally crash. it's so much harder to go liquid on a property, and you have 0 diversification. in an investment neither is true.
I'm basically done owning property unless for special circumstances.
I put my money in wealthfront.com now. Since opening the account summer 2013 I have a 9.1% return. And it's cost me less than an hour of time to manage.
So why are so many Americans home-buying crazy? It's the dream that was sold to us by everyone that profits off us - the big lenders, the small lenders, the mortgage companies, real estate agents, the insurance companies, the refrigerator makers, kitchen granite installers, and so on.
To me, this sounds less like a dream and more like a nightmare. Don't trust anyone that profits off your home purchase. It is not in their best interest to give you authentic advice. And worse yet, they have even believe their own lies at this stage.
I have been threatened to be sued by tenants who rented my home, and I had a crazy neighbor cut every tree in my back yard down and knock down my fence when I listed it for sale last summer - I wasn't living in the city or even in the state at this time and had never met this neighbor. He claimed that my property was encroaching on his, which was completely false, and there was no legal ground for him to stand on, but to my shock my real estate agent said "resolve this peacefully or you will be in court for years and you will not be able to sell the house while the title has a lien against it, plus nobody wants to buy a house with a crazy neighbor so your valuation will go down". Well, f*ck me.
No crazy neighbors or tenants suing you on wealthfront.com or most other investment opportunities.
Use my invite code: http://wlth.fr/1hLR23Y to get $15k managed free or just go to wealthfront.com and try it out.
Disclaimer: I have no affiliation whatsoever with wealthfront, it's just the service I happen to be using now. I am a happily employed software engineer at Google.
This is unusual about housing - there is no other asset that comes even remotely close in frictional costs for an exchange.
The other considerations with home owning that you don't get with other investments:
1) risk of being sued
2) risk of someone suing you for unrelated reason, and going after your property since it's a public record asset
3) huge amount of time spent managing the little aspects of the property, and the closing of the purchase and sale (dozens of hours in that alone)
4) risk that the market could totally crash. it's so much harder to go liquid on a property, and you have 0 diversification. in an investment neither is true.
I'm basically done owning property unless for special circumstances.
I put my money in wealthfront.com now. Since opening the account summer 2013 I have a 9.1% return. And it's cost me less than an hour of time to manage.
So why are so many Americans home-buying crazy? It's the dream that was sold to us by everyone that profits off us - the big lenders, the small lenders, the mortgage companies, real estate agents, the insurance companies, the refrigerator makers, kitchen granite installers, and so on.
To me, this sounds less like a dream and more like a nightmare. Don't trust anyone that profits off your home purchase. It is not in their best interest to give you authentic advice. And worse yet, they have even believe their own lies at this stage.
I have been threatened to be sued by tenants who rented my home, and I had a crazy neighbor cut every tree in my back yard down and knock down my fence when I listed it for sale last summer - I wasn't living in the city or even in the state at this time and had never met this neighbor. He claimed that my property was encroaching on his, which was completely false, and there was no legal ground for him to stand on, but to my shock my real estate agent said "resolve this peacefully or you will be in court for years and you will not be able to sell the house while the title has a lien against it, plus nobody wants to buy a house with a crazy neighbor so your valuation will go down". Well, f*ck me.
No crazy neighbors or tenants suing you on wealthfront.com or most other investment opportunities.
Use my invite code: http://wlth.fr/1hLR23Y to get $15k managed free or just go to wealthfront.com and try it out.
Disclaimer: I have no affiliation whatsoever with wealthfront, it's just the service I happen to be using now. I am a happily employed software engineer at Google.
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