Guy makes $160,000 and barely making it month to month...

Alright, so we finally arrived at the exact same conclusion. Glad we can agree on this. That is exactly what I am doing: I rent, and all my surplus is stuffed into passive funds, for years. But I admit my case is slightly different from the norm. I do not live in my home country, would I have a place where I really felt I want to settle then I would probably purchase as well, but I would pay up in cash and be done with it.

sle said:
Actually, found this:

year median_px monthly_rent 10_year_$return annualized_return minus_expences
2010 221800 855 174440 0.1458528428 0.1158528428
2000 119600 602 94140 0.1190139064 0.0890139064
1990 79100 447 61060 0.1293644068 0.0993644068
1980 47200 243 43160 0.2538823529 0.2238823529
1970 17000 108 13620 0.1144537815 0.0844537815
1960 11900 71 9586 0.1303508295 0.1003508295
1950 7354 42 7656 0.2605854323 0.2305854323
1940 2938 27

The point of it is that even without the tax benefits an average American would have done pretty well on his house purchase. Almost as well as equity investments.
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Zzzz1 said:
Alright, so we finally arrived at the exact same conclusion. Glad we can agree on this. That is exactly what I am doing: I rent, and all my surplus is stuffed into passive funds, for years. But I admit my case is slightly different from the norm. I do not live in my home country, would I have a place where I really felt I want to settle then I would probably purchase as well, but I would pay up in cash and be done with it.
More...
Oh, a conclusion that real estate is a pain in the ass is obvious. My main reason for buying was my dog - we lost the lease on our rental back in 2008 and nobody would take us with a 65kg animal.


However, what's right for us is probably wrong for Joe from Bumfuck, NY. For him, housing expenses are a much bigger fraction of his income, he has no access to leverage besides mortgage and so on. Also, cap rates out there are much higher, as high as 7%. He also might be handy enough to do some of his own maintenance work. So he might be better of owning a house instead of investing in broad stock index. IMHO.
 
Sorry to hear that, I feel for you. We have a smaller dog (~12kg, a Shiba Inu), and it was a nightmare to find houses in Tokyo that would allow pets. But then Tokyo is one of the very few markets imho where owning still trumps renting.

sle said:
Oh, a conclusion that real estate is a pain in the ass is obvious. My main reason for buying was my dog - we lost the lease on our rental back in 2008 and nobody would take us with a 65kg animal.


However, what's right for us is probably wrong for Joe from Bumfuck, NY. For him, housing expenses are a much bigger fraction of his income, he has no access to leverage besides mortgage and so on. Also, cap rates out there are much higher, as high as 7%. He also might be handy enough to do some of his own maintenance work. So he might be better of owning a house instead of investing in broad stock index. IMHO.
More...
 
sle said:
Actually, found this:

year median_px monthly_rent 10_year_$return annualized_return minus_expences
2010 221800 855 174440 0.1458528428 0.1158528428
2000 119600 602 94140 0.1190139064 0.0890139064
1990 79100 447 61060 0.1293644068 0.0993644068
1980 47200 243 43160 0.2538823529 0.2238823529
1970 17000 108 13620 0.1144537815 0.0844537815
1960 11900 71 9586 0.1303508295 0.1003508295
1950 7354 42 7656 0.2605854323 0.2305854323
1940 2938 27

The point of it is that even without the tax benefits an average American would have done pretty well on his house purchase. Almost as well as equity investments.
More...
Buffett just sold his Laguna Beach house for $11 millions. He bought it in 1971 for $150,000. Annualized return of 10%. Better than SP500.
 
ironchef said:
Buffett just sold his Laguna Beach house for $11 millions. He bought it in 1971 for $150,000. Annualized return of 10%. Better than SP500.
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Yes, but how much did he pay for it in real estate taxes and maintenance? If you look at the numbers I posted, per decade total return of an average home did beat the S&P, especially if including average rent savings. The real estate taxes and maintenance make a big difference though - for example, in the NYC it's common to pay 2% of value in taxes and similar amount in condo fees
 
@Overnight I'm sure you can break it out somehow, generally though there isn't a "health care" tax in Canada federally. It comes from various sources, and depending on your income level, you generally pay a premium depending on your income level provincially.

You can structure your affairs so that you have a low income, and pretty much get free(to you) healthcare. Most coming from the US will experience delays and etc, but it may work for for those who have had it with insane healthcare prices in the States.
 
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