Mortgages

[Marble]

Perhaps to you, it was emotionally “key”. If so, congratulations. For a massive number of people, however, this “advice” makes zero financial sense at all.

The great majority of people who become wealthy do this. Why? Because it gives then more funds to invest, reduces risk, and changes spending behaviors in a way that leads to more wealth buildings.

Until people experience death, disease, divorce, debt issues, dumb people and default and unemployment, they never appreciate the tools available after being debt free.

Rarely is the lack of funds the problem for people when it comes to being wealthy in life. It's normally a behavior issue.

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[Muley Tag]

Perhaps to you, it was emotionally “key”. If so, congratulations. For a massive number of people, however, this “advice” makes zero financial sense at all.

Not really. The money you used to pay to your mortgage payment you simply add to your financial investments. Being debt free and having a cash flow to invest has no negative implications???

 

[CorbLand]

You can be in debt and have cash flow.

I dont know why everyone seems to think if you have debt it means that every penny you have is going to that debt.

Different strokes for different folks but for the vast majority of people right now, if your mortgage is below 5%, you are throwing money in the fire by making extra payments on it. Todays economy is a risk adverse individuals wet dream.

 

[BuckRut]

The other thing that plays into deciding on being in debt is time. There is value in having something now rather than 5 years from now. Unless you are trying to build generational wealth you just need to decide how you want to spend your earnings. If it is worth it to you to pay a little more to have that house an extra 5 years of your life or go on that hunting trip now while you have your health rather than save forever and go when your 60 more power to you.

 

[PNW bow hunter]

Me and several friends of mine all bought homes in our early 20’s, I’m 44 now.

Obviously home prices have outpaced median household incomes since then, so things have changed.

For me to get my first home I had to work 60-65 hours per week, and have 3 roommates.

One thing I notice on threads discussing home prices/affordability… I rarely see anyone discussing roommates. I had 3 roommates to make my first house work for probably the first 5 years. Then still kept one roommate for another 6 years. My friends that bought houses at a young age all had multiple roommates as well. Back then a room was pretty easy to get $300 a month.

In my area an apartment is 1800-2400, so I bet a room is in a house had pretty significant value now days.

Obviously carefully picking your roommates is critical.

Roommates won’t help you qualify for a lon, but definitely help with affordability.

Me using roommates to afford buying my first home was all easy. Had some really great times, some tuff times, but it was one of the smartest choices I made.

It’s always a bad time to buy if you ask for advice from others, but with the exception of a few small time periods it’s usually a pretty good idea if you can swing the expense.

 

[SDHNTR]

You can be in debt and have cash flow.

I dont know why everyone seems to think if you have debt it means that every penny you have is going to that debt.

Different strokes for different folks but for the vast majority of people right now, if your mortgage is below 5%, you are throwing money in the fire by making extra payments on it. Todays economy is a risk adverse individuals wet dream.

This.

 

[Tahoe1305]

Concur “some” debt is not a bad thing. You can build wealth quicker leveraging other peoples money. But you have to be smart and run the numbers and be willing to accept the risk.

Having $1M loan at 2% you should definitely not pay it down IF you think you can make more than 2% in other investments.

IMO if you had $1M to pay that loan off you’d be much better off using that money to pay 5x $200k down payments on another 5x $1M homes to generate you income. That is how wealth is created. Or at least one way.

 

[180ls1]

Me and several friends of mine all bought homes in our early 20’s, I’m 44 now.

Obviously home prices have outpaced median household incomes since then, so things have changed.

For me to get my first home I had to work 60-65 hours per week, and have 3 roommates.

One thing I notice on threads discussing home prices/affordability… I rarely see anyone discussing roommates. I had 3 roommates to make my first house work for probably the first 5 years. Then still kept one roommate for another 6 years. My friends that bought houses at a young age all had multiple roommates as well. Back then a room was pretty easy to get $300 a month.

In my area an apartment is 1800-2400, so I bet a room is in a house had pretty significant value now days.

Obviously carefully picking your roommates is critical.

Roommates won’t help you qualify for a lon, but definitely help with affordability.

Me using roommates to afford buying my first home was all easy. Had some really great times, some tuff times, but it was one of the smartest choices I made.

It’s always a bad time to buy if you ask for advice from others, but with the exception of a few small time periods it’s usually a pretty good idea if you can swing the expense.

Bingo.

I rented out rooms to my buddies and it allowed me to put roughly $50K in my 401K @ 30yo. I'll never retire but if I get 8% on that @ 70yo it'll be worth $1,000,000+

They also helped me fix the house (buying a fixer helps also) and I gave them cheap rent. We had tons of fun, parties, bbq, you name it.

 

[intunegp]

Me and several friends of mine all bought homes in our early 20’s, I’m 44 now.

Obviously home prices have outpaced median household incomes since then, so things have changed.

For me to get my first home I had to work 60-65 hours per week, and have 3 roommates.

One thing I notice on threads discussing home prices/affordability… I rarely see anyone discussing roommates. I had 3 roommates to make my first house work for probably the first 5 years. Then still kept one roommate for another 6 years. My friends that bought houses at a young age all had multiple roommates as well. Back then a room was pretty easy to get $300 a month.

In my area an apartment is 1800-2400, so I bet a room is in a house had pretty significant value now days.

Obviously carefully picking your roommates is critical.

Roommates won’t help you qualify for a lon, but definitely help with affordability.

Me using roommates to afford buying my first home was all easy. Had some really great times, some tuff times, but it was one of the smartest choices I made.

It’s always a bad time to buy if you ask for advice from others, but with the exception of a few small time periods it’s usually a pretty good idea if you can swing the expense.

I think this is less common now for exactly the reason you mentioned...roommates help pay the loan, not get the loan. People are needing their significant other's income to qualify for the house they're buying.

I got on Zillow, put in my zip code, and filtered by single family homes up to $350,000...no results. Bump that up to $400,000 and you have three options to choose from, one of which is 1br/1bath. So really only two options. One of those two is listed as "investor's dream" with an offer deadline of 5pm tonight. So really only one option, and it doesn't look terrible. 3br/1bath so probably only you and two other guys going in there.

Colorado median income is $44,196 individual and $87,598 household and there is only one available house in an entire zip code that shows up on a $400,000 price filter. It's a tough place to be if you're trying to own a home.

 

[SDHNTR]

The great majority of people who become wealthy do this. Why? Because it gives then more funds to invest, reduces risk, and changes spending behaviors in a way that leads to more wealth buildings.

Until people experience death, disease, divorce, debt issues, dumb people and default and unemployment, they never appreciate the tools available after being debt free.

Rarely is the lack of funds the problem for people when it comes to being wealthy in life. It's normally a behavior issue.

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Not true. I do this for a living. Every day.

Why do companies like Apple, and a multitude of other fortune 500 firms take on discretionary debt when they are already sitting on billions of dollars? The same could be said for ultra high net worth individuals, family foundations, endowment funds, pension plans, etc. — The “smart money”. Because the smart usage of debt (low interest, tax deductible debt) can be used to build more wealth and value. It’s the age old principle of leverage. You either understand it and embrace it and use it to your advantage, or you don’t.

 

[IDVortex]

A interesting book to read is 'Rich Dad, Poor Dad' unless you only believe Dave Ramseys way is the correct and only way to build wealth. And I guarantee Dave Ramsey uses credit cards for his business, so that's still debt. Even if you pay it off monthly, it's still debt.

 

[kfili]

I am a lender-
a lot of good and terrible advice on here - will have to go back through for some quality meme material.
Anyway I sent you a PM give me a shout with any questions and I would be happy to walk you through everything.

 

[180ls1]

A interesting book to read is 'Rich Dad, Poor Dad' unless you only believe Dave Ramseys way is the correct and only way to build wealth. And I guarantee Dave Ramsey uses credit cards for his business, so that's still debt. Even if you pay it off monthly, it's still debt.

How are you so sure of that? Have you spoken to them or their employees?

 

[IDVortex]

How are you so sure of that? Have you spoken to them or their employees?

It's a assumption, which I'm allowed to have?

 

[180ls1]

It's a assumption, which I'm allowed to have?

Ok, it comes off more like an assertion.

I've spoken to them and their team (B2B with my business) and came off with a completely different conclusion from you. They do not even take credit cards for any form of payment with their products. I would be completely shocked if they use credit cards.

 

[IDVortex]

Ok, it comes off more like an assertion.

I've spoken to them and their team (B2B with my business) and came off with a completely different conclusion from you. They do not even take credit cards for any form of payment with their products. I would be completely shocked if they use credit cards.

I guess when it comes down to it, I trust most businesses like I politcian.

 

[Pharmseller]

Nothing wrong with incorporating emotion into financial decisions. Just don’t lead with it.





P

 

[Andrew12gauge]

Bingo.

I rented out rooms to my buddies and it allowed me to put roughly $50K in my 401K @ 30yo. I'll never retire but if I get 8% on that @ 70yo it'll be worth $1,000,000+

They also helped me fix the house (buying a fixer helps also) and I gave them cheap rent. We had tons of fun, parties, bbq, you name it.

That’s a great plan if buying a house while single, but if you’re married(like most people buying houses) the wife isn’t gonna put up with 2 or 3 of your bachelor buddies for long and you won’t have a house because she will take it in the divorce.


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[Pharmseller]

That’s a great plan if buying a house while single, but if you’re married(like most people buying houses) the wife isn’t gonna put up with 2 or 3 of your bachelor buddies for long and you won’t have a house because she will take it in the divorce.


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Expand your mind.

Maybe 2 or 3 bachelor buddies is exactly what she’s looking for.




P

 

[maxx075]

Expand your mind.

Maybe 2 or 3 bachelor buddies is exactly what she’s looking for.




P

Good thinking, then you get the house after you file for divorce for adultery?