2:30 I agree when I was tracking every transaction I was stressing the small transactions that add up. When I put a portion of every paycheck aside for bills automatically and the big stuff was taken care of my “budget” went from “can I afford this small purchase and still have enough left for bills” to “the bills are accounted for is there money left in the secondary account for what I want” and it reduced the stress and worry of always redoing the math to make sure there was enough for everything and instead whatever was in the extra account is fair game because the important stuff is in the main/bill account and doesn’t get touched
@@beetsbeetsbeets Hear, hear. As long as you don't go crazy with your categories, it's super manageable. And I am dying on the use of "identify gaps and connect resources to goals" Project manager here as well.
Yeah. You still have to track your “guilt free spending” vs fixed expenses. And you have to decide what goes into each category like clothes and types of food, etc. CSP is still a budget and there’s nothing wrong with that, but it is off putting he tries to say it’s not.
Yep. Lots of competition giving "budget" advice. However, call it something new and different, and voila the playing field has changed. That is, unless everybody sees through the obvious marketing ploy.
We love renting! We're 50 & 60 and live in an amazing town we wouldn't be able to afford to buy in, but get to enjoy all the perks of living there and have lots left over to grow our investments. The freedom and flexibility are wonderful! 😊
I bought my condo during the pandemic, but that was after keeping an eye on interest rates (extraordinarily low) and the condo market for 6 months (soft at the time…most were selling below asking in my area), crunching the numbers and making sure I could pay for repairs, maintenance, upgrades, etc. that my home wanted/needed. Buying at that time was cheaper in my area (Seattle), and h that difference has just grown. I got lucky and was able to time the market, and real estate is the only time I’m willing to time the market (I’m a believer in DCA when it comes to investing). As a result, I’m still able to max out my HSA, my Roth IRA, put 15% of my salary in my 401(k) and save $500 per paycheck in other savings and investment vehicles. I would never think about buying these days, and instead would do what y’all are doing. The stars don’t align every day, after all!
God that created everything, can make anything happen. “I am the Lord, the God of all mankind. Is anything too hard for me?” Jeremiah 32:27 “With man this is impossible, but with God all things are possible” _Matthew 19:26 “The Lord is near to all who call on him, to all who call on him in truth. He fulfills the desires of those who fear him; he hears their cry and saves them. "He will hear and help us if we worship and serve Him with a Holy awe of Him” _Psalm 145: 18-19 “And whatever you ask in My name, that I will do, that the Father may be glorified in the Son. If you ask anything in My name, I will do it. “If you love Me, keep My commandments.” _ John 14:13-17 “Truly I tell you, if you have faith as small as a mustard seed, you can say to this mountain, 'Move from here to there,' and it will move. Nothing will be impossible for you.” _ Matthew 17:20-21. "For I, the LORD your God, hold your right hand; it is I who say to you, 'Fear not, I am the one who helps you.” _ Isaiah 41:13 Don’t think He can, know He can. Ask God to become successful.
I’m a homeowner - but I love the questioning of whether or not it makes sense to buy. It did for me and I can comfortably afford it, but I also bought back in 2021 and could NOT afford to buy the same house now. I do love being able to build and make it mine - currently renovating part of my basement so I have an office and craft room (I wfh), but if the timeline was different, I’d probably be perfectly happy renting now too.
It's like comparing leasing vs buying a car. Or leasing vs buying a phone. Yes, it will still get you from point A to point B. But looking at it from purely financial standpoint is not a great idea. There are some financial advantages to owning your house, but there are also a lot of drawbacks. However, the biggest factor should always be what you want to do with your house. If you want to use it as an investment, an average HYSA will get you just as good of a returns, if not better. But if you want to use it for your enjoyment(plant a garden, setup a home gym, create a workshop, a home theater, or pursue dozens of other hobbies and activities which would be difficult, or impossible to do while renting), then you are truly living your rich life. Buying a house with this in-mind will also help you focus on what's important, without going all out and not being able to afford it.
Rethinking the idealized living situation ( house vs renting) is just one of the things we need to do. Prior to the end of WW2, many did not own a house; but also, we were financially better off, compared to today. So Ramiro, thank you for being honest and saying what you have.
Some of us enjoy fixing things around the house and yard. Gives purpose to maintaining a home. It’s also very satisfying to see your own progress with projects. I guess it also depends on age. As we get older, we enjoy being home more.
Also, we bought a new constuction for that reason. We bought a fixer upper at the age of 21 and HOLY CRAP that was HARD, but I did all my repairs and upgrades myself. I respect those who would rather rent, but my wife and I enjoy the comfort of being home owners.
What he failed to mention is that a landlord is not losing money when they rent to you. You are paying mortgage plus maintenance and repair PLUS a profit margin. All that is included in the rent. Plus no control over when your rent is raised and by how much
@@autchicab Landlords absolutely can lose money. Do you think they can charge whatever they want as opposed to what is competitive in the market? Yes, let me charge $10,000 a month for this studio because I want to profit!1 What if I miss one month of vacancy? I'm still on the hook for the mortgage and possibly wiped out all the year's profit. Ramit has talked over and over (and over) again about this concept and how landlords sometimes don't even know if they're making a profit. The belief that you are paying landlord's mortgage is simplistic because they can only charge what they can, not what their mortgage costs. Even in this video, he calls this out (22:19)!
I think the issue is that some people don't factor in the upkeep and upgrades that come with owning a home. Either their family never owned a home, and they have a rosy view of home ownership, or they didn't have to get involved with homemaking growing up and are just oblivious to the responsibility. But if someone is eager to take these things on and it's within their budget, I say go for it! Renting makes sense for me right now, but I do look forward to eventually having a place I can work on without having to worry about a landlord or safety deposit😊
@autchicab Landlords can only charge what the market will allow.... I saw it over and over again around 2017 of people having to rent their home for just $500/mo over their mortgage, or even $500/mo LESS than their mortgage alone.... Yes, they will lose money at times
I disagree with you about the spreadsheet thing. I’m one of those people that has a pretty in depth spreadsheet where I enter all of my expenses, savings etc…. But I definitely don’t LIVE in the spreadsheet 😜 If I’m being honest, I maybe spend 30 minutes per week in my spreadsheet. The biggest help I get from the spreadsheet is when I start to go overboard on my spending. It’s a hard reality check for me to see it in a sheet and I’m able to push the brakes 😊
Boring! Just allocate how much you want to spend on yourself and transfer that amount automatically to an account just for spending, until it gets to zero in a BLOW MONEY account therefore you won’t ever go over
As a homeowner, we need to stop thinking as buying a house as an investment, and more of a lifestyle choice. Owning is not better than renting, just a different way of living- and both perfectly valid. So for every person that wants to house-shame renters, remember there are so many pitfalls for owning that most people overlook. Renting can be a fine choice for hedging against those risks! Renting or owning should not be a status marker of how successful one is.
I have yet to see a cheaper place to live than owning a home. It is part of my three leg retirement. 1. 401k/IRA 2. Paid off home 3. Social security. After 10 years the payments are far cheaper than rent (and that is with 0% down) and repairs are not expensive.
@ far too often people become consumed by the idea of needing to buy a home, that they end up purchasing more than they can afford. A house is only a good choice for those that are financially prepared. If one can’t afford to put down a sizable down payment and comfortably meet the monthly payments, then home buying isn’t really good choice. For those individuals, renting is fine, but they need to be just as financially disciplined to save more and putting extra money into the stock market to cover the added costs of renting into retirement.
@ a down payment ensures that you have immediate equity in your home in case the value of the house goes down and you are forced to sell. 0% down offers no cushion. Secondly, you will end up paying substantially more for the same house in interest. If given the option of either buying a house or renting that same house, the increased interest payments on a 0% mortgage, would make renting the same house much cheaper. Of course the monthly mortgage will remain the same, whereas the rent will continue to increase year over year. Even still, If the same person chose to rent that same house and invest the difference in the stock market, renting would be the better option. Not saying that 0% down is a bad choice, just that it becomes more difficult to justify it financially.
One could also certainly get into a 0% mortgage, and choose the invest the lump sum that would otherwise be the down payment into the stock market, but again because of the higher interest payments, you would need to guarantee the returns of the market beat the interest costs. The higher the interest payments on the house, the more of a return is needed in the market. Not saying it can’t be done but it’s entirely too risky to put so much of your stake in your financial future on betting the market against your home
I love the fact that I’ve been watching Ramit long enough that when he said anyone who does personal finance online should 100% expect to get yelled at about some things and I already knew he was talking about the rent vs buying a home debate 😂
I agree with your view of a combined personal responsibility with external structural, socio-economic causes. One must look really at both. True liberation comes when both the individual and the collective have been liberated, not before.
Because I own my home outright the only market changes I need to worry about is insurance and taxes. It gives me a sense of security and stability.I do need to be careful and not get caught up in unnecessary remodeling and aesthetics and keep I need to keep a house fund for essential repairs. I don’t think owning a home is necessary for everyone, especially if you may frequently move.
Am sure you can agree that’s an emotional /psychological choice which is perfect fine though it is not a wise financial decision. We are humans not robots so this makes perfect sense if you feel secure and your mental health is at check x
@ so is choosing to take vacations in 5 star hotels… it’s what a person defines as a rich life. I’d rather return to a home that feels like a retreat that I own than go to a retreat that I can only go to a few weeks out of the year.
I can tell you as a landlord that my renter pays my maintenance, property taxes, insurance, landscaping, vacancy, capex, property management, and profit.
I also hate micro budgeting. It was useful for a bit, but it makes me fatigued now. I love macro budgeting though. It enables me to pursue my big goals without feeling guilty about spending on other things or spending my precious time on an unpaid task.
One of the best decisions of my life was buying a house however I was very fortunate to get a nice affordable home and have only done a few repairs the most was getting the roof touched up
I really think that you can only get away with "not budgeting" when you reach a certain income. If you're under 50K a year you have a budget and it's needed. You need to have the space to safely "fail"
Definitely! As someone with ADHD and a recovering shopping addict, absolutely nothing has helped me more with getting my shit together (and doing it in a way that's kind towards myself and still makes me feel good instead of hating myself) than YNAB, and it's even fun since assigning my money gives me dopamine and I love seeing my money grow.
I own my own home now because the control over my environment makes the hassle worthwhile, but taxes and maintenance costs will never end, when I can't do the maintenance any more it would totally make sense to downsize to an apartment.
The best thing I've done in my life besides having our kids is buying my house. The 3rd video has an opinion on why SHE doesn't want to own a home. We have been lucky enough to have a big portfolio, 2 529s and the house. Plus I'm in construction so repairs are fun for me :)
I like to hear things like this. I’m young and have dreams of owning a house. I just always feel guilty when every financial guru online says that renting makes more sense than buying. I’ve come to the conclusion that if it’s something I want to do, then I need to just figure it out and do it regardless of online opinions
The internet is a place where everyone can bring their thoughts a d opinions and share them with the world. You are so busy listening to everyone else that you don't listen to yourself. Buying a home for us made sense with the cost and our growing family. Do what you want because you only have 1 life. But, think first if it's best FOR YOU
HAHAHA... the second video..."WTF is going on?" You're awesome. I love that you debunk and call out all these old beliefs (perpetuated by industries like the mortgage industry).
I'm in the uk, and just bought my first home. I got in the financial game late. Didnt have the financial education early on. Yes owning my own home is a lot of responsibility, but I also found a decent property cheap and its costing me almost half every month to pay my mortgage than it did to rent. That money I save on my rent is getting invested. If I hadn't done this, I'd be struggling to put much away for later and my rent would keep step with inflation. I might have to put the work in to maintain my home, but I do have freedom to change what I want and peace of mind that a landlord cant just oust me when it suits them. That might just be my version of a rich life though.
Ramit… you hate budgeting!! My heart 💔 I get what you’re saying though, it does feel like you’re on a tight rope all the time even when you’re not. I realised the other day that I’ve been “living in my spreadsheet”, I’m not ready to give it up yet but have simplified it loads so I can take a step back. It feels good 😊
i don't think living in the spreadsheet or the budgets or accounts is necessarily a bad thing. for me, i like viewing those things because it reminds me of the good choices i've made and it reminds me why it's all worth it. and i personally like keeping track of what i spend because it helps me focus on what's important, and what i want to spend more or less on.
The own [a house] vs. rent question is not just an American thing; the same question is discussed here in Europe. For some people, it's almost a religious thing that owning real estate is the only acceptable goal in life.
I'm feeling alone on that regards, in Portugal every of my friend almost mad at me because i'm not owing a house. Oh god, i'm feeling really alone and also doubt about my decision. It's so hard. By the way, in Portugal own a house it's soooo spency related to how less we earn.
That's interesting. I saw a video a long time ago about renting in Switzerland, where people discussed not feeling the need to own a home and how that was the general attitude in their culture. That always stayed with me. But I guess different countries would have different attitudes, or maybe attitudes have changed. Either way, that was a useful perspective for me to see when I was just starting out, and I still don't think now is a good time for me to buy a home.
Thank you for finally talking about a budgeting app that you recommend! Can you please make a video on how to do a monthly meeting? If you are not budgeting or tracking expenses, how can you know if you have gone beyond what you planned on the CSP. (It's easy to overspend on groceries and dining out)
i think the CSP/Ramit is a little disingenuous in saying you don't need to budget... ultimately if you want to keep your fixed costs at a certain percentage, you need to know the number. personally i just looked at my ACTUAL spending all of last month on my credit cards and other purchases and insurance and stuff. that's my "natural" spending rate. from there you can see if it's too high or good. and knowing that number, i based my future spending/CSP in the sense that i know each month i have roughly x money for fixed expenses, and y money for guilt free. probably, it would make sense to have separate accounts for each. so when i visit the grocery store, i'm not budgeting in the sense that i'm not stressing about a $3 difference in the price of grapes. but i do know that i can't spend $200 every grocery trip.
The CSP is not an exhaustively detailed budget; that's what Ramit objects to. It's a higher level guideline that encourages accountability without getting lost in the weeds. Watch a few more videos.
You know what else does mean anything? 82% of Americans rating their financial situation as good or very good. People have no idea what a good financial situation is. They vastly overestimate how well they’re doing. Medium net worth of $193,000 for a household means nothing without age ranges. $8,000 in checking is absolutely paycheck to paycheck in the eyes of Americans (meaning it’s not rooted in reality), and $8,000 is not a lot of liquid assets for certain parts of the country with a family size of 4+. Didn’t really like those numbers at all - seemed very flawed
I agree, the numbers are being mis-interpreted. Net worth itself is a vague term, especially if all of it is tied in home equity and not physical cash (which is the case for many people).
I know, right?? In my culture (Brazil) it's the same mentality. The mom keeps bugging me about buying a home meanwhile my husband and I have a huge investment portfolio and don't really see the need to buy property if we can continue to grow our portfolio that way. Just so annoying that people have a fixed mentality about things and can't see any differently or accept different ways of doing things.
I totally relate to the parents leaving a house situation. I want to sell and my sister doesn’t. It’s not in a great neighborhood and hasn’t been updated since the 80’s. Such a financial burden. The money from the sale would benefit me greatly but not her so there’s no motivation to sell on her end. Meanwhile we have a shared savings account where we each put money in for repairs that could be better invested 🙄
same thing, i've just been binging the most popular videos. i've learned so much, i feel like i already have all the common info he repeats but it's still nice to watch more videos and get a little extra wisdom
Yeah I got all the finance tips I need from your book and Netflix show. What I really wanna know is what your hair care routine is? Ramit’s looking fresh out here.
God that created everything, can make anything happen. Don’t think He can, know He can. “I am the Lord, the God of all mankind. Is anything too hard for me?” Jeremiah 32:27 “With man this is impossible, but with God all things are possible” _Matthew 19:26 “The Lord is near to all who call on him, to all who call on him in truth. He fulfills the desires of those who fear him; he hears their cry and saves them. "He will hear and help us if we worship and serve Him with a Holy awe of Him” _Psalm 145: 18-19 “And whatever you ask in My name, that I will do, that the Father may be glorified in the Son. If you ask anything in My name, I will do it. “If you love Me, keep My commandments.” _ John 14:13-17 “Truly I tell you, if you have faith as small as a mustard seed, you can say to this mountain, 'Move from here to there,' and it will move. Nothing will be impossible for you.” _ Matthew 17:20-21. "For I, the LORD your God, hold your right hand; it is I who say to you, 'Fear not, I am the one who helps you.” _ Isaiah 41:13 Ask God to become successful.
The house comment: you forgot the biggest expenses for me which are interest, property taxes and forced insurance that covers pretty much nothing at ridiculous amounts. That said, i enjoy my house but dgaf about what others do
I think renting is great for a lot of people. If you hate fixing things or putting time into your place rent is great. The only thing that scares me is here in Arizona apartments are being bought up by huge companies and rent is skyrocketing. Sometimes as much as 50% more. But you can’t live in fear and you can’t tell the future so if renting feels right for you do it.
I like that there is more talking about being flexible with housing. Personally I love having a house. I like fixing it up, like having tools, like modifying it. Is it expensive? Yep. But I love that I was able to put a rock climbing wall in the house for the kids, and also had a trampoline in it. When they outgrew it I fixed the wall, and the trampoline messed up the tile it was on so I ripped it out and put in new flooring. I don't think renting is wasting money, and I don't think buying a house is a waste. It all depends.
The first method works well for me! Every penny I have does a job for me! Majority of which goes straight into investments and towards next month and the month after expenses. This is encourages me to ensure to increase my cash flow!!
I’ve read like 14-15 business, tax, investment, self help, etc. books. I can personally say that I am very happy that I bought & read your book. It was the 1st book that gave me an actual financial game plan VS hypothetical … minutiae 😊. I’m a nurse trying to do a product startup I invented to prevent kids from drowning. Been working on all aspects I had to learn since 5 years ago: design & prototyping, business, tax, investing, communication, sales, networking, marketing, etc. I now understand why successful people say that the 1st 1 million is the most difficult. It’s because before that threshold, financial momentum isn’t in your favor. How do I break the that threshold asap so I can get this damn product on store shelves? - The Dean
Manifest a cashmere sweater by going to a store and buy it. 😀 About buying a house, I enjoy being a homeowner. I only put down 11% the December before Covid. In 7 months, the value of the house went up by 25% and 1.5 years later, it went up by 60%. The housing market in the Bay Area come back down to reality a bit but it is still up 40%. I just bought the house at the RIGHT TIME and RIGHT PLACE. I'm greatful for that. I'm also paying more into my mortgage. This will lower the total interest paid by the time I finish paying the house.
Hubby and I rent and we are mid 50's. The thing about renting is that you are under the power of a landlord. We've been in this same townhome for 5.5 years and got a notice from our landlord that he wants to sell in 2025. Now we have to move when we don't want to. We are looking for a place to buy because this is the second time now that we were forced our of a rental.
Integrate your values and concerns into your eating habits is essential. Aim for balance and sustainability, rather than strict dietary rules. health and well-being are unique to you. Listen to your body and adjust your approach accordingly. Consider what matters to you and don't let anyone crush your dreams!
I bought a house and 12 years later I have paid about $350/mo renting my own house. Its a lifestyle choice. A house is a home not an investment just like a place to rent. The advantage is stability in a hime for the kids. No rent increases and no risk of being forced to move which we yhink is critical for young kids. Otherwise, i dont see any other benefits that isn't personal wants.
Well explained. Thank you for bringing up this video. Financial education is indeed required for more than 70% of the society in the country, as very few are literate on the subject. Thanks to Caroline Suzan Olson, the lady you recommended.
Best part about owning a home is i dont have a landlord telling me my rent is about to go up $200 a month. While everything is in this world has gone up in the past 15 years, including my wages, my mortgage has stayed the same. Now, my total home expenses on a 3 bdrm brick home is a fraction of what rent would be for an efficiency apartment in Crackville. If you plan on living there for 10+ years, buying a home is a no beainer.
In Texas property taxed are outrageous. In 5 years my monthly payment on my house went up by $800 all bc of property tax increases. Rents did not go up nearly as much in those 5 years..
@@katiez688 That's specific to Texas, where you have no state tax, thus a significant source of revenue for local municipalities tends to come from property taxes. It's a system designed to benefit the wealthy, investors, and businesses the most over the working class and poor individuals.
The financial cost isn't the ONLY factor though. How much time do you spend on maintenance and repairs? How much stress does it cause when something breaks? How much time off do you have to take to wait for a repair person to show up? Or how much time are you spending learning new skills so you can fix it yourself? All that stuff adds up. I love being a renter. The only maintenance I have to do is keeping things clean, replacing the HVAC filter, replacing dead light bulbs and smoke detector batteries, and letting the faucets drip in the winter. Easy peasy, ZERO stress. That's worth its weight in gold IMO.
On the housing topic, I agree that owning a home isnt for everyone. There is a time and place for every housing situation. Renting is great for all the reasons you stated but owning is also fantastic for all the reasons you failed to mention. If the commentor stated they made a $320k profit from their home, i seriously doubt they care much about the transactional things like fees, commissions, "furniture" and all the other negligible things you mentioned. Subtract all that and you still have a HUGE deposit hitting your bank account which, if you kept your house for more than 2 years, is 100% free from capital gains tax. Owning a home and paying it off CAN be very lucrative. You can earn mailbox money on a bigger house that you owned when you had kids and now that income is paying your mortgage on a smaller home for you and your spouse. Now you're living rent free and will likely have not just one home to pass down to your kids, but two. Another thing that is failed to be mentioned is that when comparing investing 300k to buying a home for 300k is are you paying cash? If not, most people wont be getting a loan for 300k to go drop in the stock market. Thats a crazy gamble if you dont have the assets to back it up. At least with a house, theres a very limited chance the market will decrease amd your home loses value. If you get in a pinch, you can always sell and walk away with a little equity cash. Renting, you walk away with nothing. I dont think the issue for everyone is able to be compared in an apples to apples scenario. I believe there are many factors at play and that people who have careers and intend to stick with the same employer long term absolutely should consider buying. The pro's definitely outweigh the cons. Will there be expenses to owning? Sure! But the cost of renting is nearly 2x the mortgage note. Imagine paying $1500/mo to the LL when you can be paying $750 to the bank and investing the other $750 in the market. Omg, my water heater broke? Pull out $1200 and buy a new one. Move on. At the end of the year, provided you dont have any MAJOR expenses, you save idk.. a s-ton of money! Sure theres insurance and utilities and whatever but even when all these costs are added, there is still monetary value in owning over renting. The only value i see in renting is flexibility.
Not to mention....as a renter you are literally surrounded by the crush of humanity around you 24/7. I bought a nice house out in the countryside and have plenty of privacy. No loud neighbours to contend with. No loud city noises to deal with. Surrounded by nature is the best thing about our house.... You're not finding that in the city.
I think the spreadsheet folks in the comments are missing his message. Spreadsheets are a good start if you don’t know how to manage money but eventually once you implement systems such as automating investments, savings, retirement, & autopay most expenses, it will free you of having to track expenses weekly. Instead you can look at those systems monthly and make small tweaks if necessary. Also if you are a spreadsheet person in the comments, chances are you did not read his book and that’s okay too.
The chants help your subconscious thinking. I do the sleep meditation love it. Better than playing white noise😊 income increased by 21%😮 bought my house 20 yrs ago mortgage is $621 monthly. Got a grant to keep up repairs. 😮
I have a house, and I f*cking hate taking the trash cans lol. I am 35, and I’ve made $1.1 million simply investing in stocks (not including my 401k), and I’ve done the math. Had I not bought my house in 2022, I would have an additional $350k in stock gains. I thought “oh buying a house will help me build wealth” and that’s true if I don’t invest in stocks and just blow my money. But because I do aggressive invest in growth ETFs buying a house has been a horrible “trade”. Once I can sell without taking a loss, I’m selling this POS and going back to renting-I’ll take whatever proceeds I get from the house and just buy more stocks.
Have fun renting. For me buying in 2014 with 0% down I put that down payment into my investments and this brand new home had $100 more payment after taxes and insurance than renting. It has been this way every where I looked at buying a home. Now after 10 years renting is $600 more a month and owning hasn’t changed and my only repairs totaled up to $1,000
@ yes I will, because I’ll make so much more money renting that owning. My net worth with a home after 30-years is projected to be about $3 million-not bad. My net worth renting and investing is projected to be about $7 million. That $4 million difference more than outweighs the rent 30 years from now. Not to mention it will continue to to grow from there. A house is great if you just want to get by. I’m trying to ball hard and have multiples of F’u money.
imagine living and having a career in New York, and then one day a lawyer calls you and says did you know your parents left you a home? Its in Montana" No thank you!
I don’t think you can simply overlook a home as an investment. Yes, there are opportunity cost, transaction cost, and expenses you have to consider but in the right home and location, purchased at the right price, there is potential to get a very good return. On top of that, you have to consider utilizing the equity, especially if you have a very low interest rate on your mortgage and how that can help you with other investment opportunities. To someone who is about simplicity like yourself, perhaps this isn’t that appealing. But I don’t think you can generalize that owning a home isn’t worth it. I would say, like any investment, you need to be selective.
We roughly do 50/20/30 and I still use YNAB to budget my guilt free spending. Good for anyone else who doesn’t need to budget because they don’t live so close to the edge of wanting to spend everything they can without tracking, but that’s not me 😂
For some people, a house isn’t a good investment because they have a different idea of a good life. In retirement, having a paid off house can be huge because it can mean you have a low cost of living during those final years. You do have to account for property taxes and long term maintenance costs which can still range from $400-1500 a month. And those with an HOA can expect to pay even more! Where you live can really impact those costs. My 83 year old mother has a house with a large property and she pays $350 a month in taxes, $150 a month in property maintenance, and about $200 a month in repairs/replacement costs. Repairs and replacements are things like water heaters, appliances, garbage disposal, water softener, reverse osmosis, ceiling fans, dishwashers, washing machines and dryer. Property maintenance includes biannual bug spray, termite treatment, sprinkler system maintenance, AC system maintenance, replacing outdoor lighting, tree trimming and yard cleaning. Bigger maintenance like window replacement, door repairs like weather seals, septic system clean out, roofing repair due to storms and weathering, painting both outdoor and interior. The costs of owning a house can really go up once you get to an age where you can not do the work yourself. Expect to pay $10-15k per year to cover your annual costs of owning a house long term. If you plan ahead and do a full replacement of your appliances and big maintenance expenses like roofing, painting, and septic clean out right before retirement you can avoid these problems after retirement.
I think the thing with houses is that it is a kind of forced savings. Yes renting can be cheaper overall but most people aren't going to save the difference. They're going to spend and waste that money. Homeowners are paying their mortgage and home repair but they money doesn't disappear. Most of it remains as equality so even if they spend everything else they still have something in the house. That is why most studies show that homeowners have much higher net-worth than renters.
I would never buy the house I live in now for what its worth now. I can't blame other people for not wanting to do it either, especially if you aren't married. BUT if i could go back 8 years I would have bought two houses instead of one.
Id never brag about mortgaging a home. My then-fiancé-now-wife and I bought in a nice area and we were lucky to get a 1450 mortgage with 20% down. Yes, we have decent equity in the home, but its just another means of diversifying. We have plenty of investments to do what we want as long as we still keep investing and saving at out 18-30% rate that we do...
I am curious how this applies to independent contractors like musicians. Typically we are advised to save more and track everything business expense wise. Could you do a video on this subject matter range?
Ramit, could you please talk about how you suggest lifelong renters should approach housing in their last decades, especially if they want to age in place? I understand why it might be smart to rent for most of one's life, but being subject to your landlord's decisions at 80 or 90 doesn't feel secure.
Lmao so glad Ramit's team decided to hit him with a manifesting wealth TikTok
It's like a hocus pocus incantation. I would not listen to that influencer.
@@Trudloops Lol I said the same thing in my comment and I guess I upset Ramit Sethi team coz I got a reply back ...lolz
We need ramit reacting to finance gurus reacting to ramit.
😂
2:30 I agree when I was tracking every transaction I was stressing the small transactions that add up. When I put a portion of every paycheck aside for bills automatically and the big stuff was taken care of my “budget” went from “can I afford this small purchase and still have enough left for bills” to “the bills are accounted for is there money left in the secondary account for what I want” and it reduced the stress and worry of always redoing the math to make sure there was enough for everything and instead whatever was in the extra account is fair game because the important stuff is in the main/bill account and doesn’t get touched
I loved that spreadsheet the first woman was showing and then you said projects mangers love them! I felt so called out 🤣 Project manager here 🙋🏻♀️😂
Same. Point is that once you have it, you can quickly identify gaps and connect resources to goals.
@@beetsbeetsbeets Hear, hear. As long as you don't go crazy with your categories, it's super manageable. And I am dying on the use of "identify gaps and connect resources to goals" Project manager here as well.
Her 3 buckets are essentially accounting. Assets, liabilities and equity. That's cpa 101
Data analyst here and it’s so lovely to see hahaha
I've used her spreadsheet for the past two years and I love it!
Ramit your whole business is a budget…. A CSP is your terminology. It’s like me calling skittles a twix….. it’s still skittles bro 😅
Yeah. You still have to track your “guilt free spending” vs fixed expenses. And you have to decide what goes into each category like clothes and types of food, etc. CSP is still a budget and there’s nothing wrong with that, but it is off putting he tries to say it’s not.
@@925ProphetI love his content overall, but this is the one point I hate.
Agree. Keeping track of your finances and how you use it IS budgeting. Love Ramit's content, but let's just call a spade a spade.
Yep. Lots of competition giving "budget" advice. However, call it something new and different, and voila the playing field has changed. That is, unless everybody sees through the obvious marketing ploy.
Let the man cook
Inherit a house or a portfolio. That blew my mind because it's so true! Thank you for all the advice ❤
Ngl manifesting the cashmere sweater was amazing 🤣
We love renting! We're 50 & 60 and live in an amazing town we wouldn't be able to afford to buy in, but get to enjoy all the perks of living there and have lots left over to grow our investments. The freedom and flexibility are wonderful! 😊
I bought my condo during the pandemic, but that was after keeping an eye on interest rates (extraordinarily low) and the condo market for 6 months (soft at the time…most were selling below asking in my area), crunching the numbers and making sure I could pay for repairs, maintenance, upgrades, etc. that my home wanted/needed.
Buying at that time was cheaper in my area (Seattle), and h that difference has just grown. I got lucky and was able to time the market, and real estate is the only time I’m willing to time the market (I’m a believer in DCA when it comes to investing). As a result, I’m still able to max out my HSA, my Roth IRA, put 15% of my salary in my 401(k) and save $500 per paycheck in other savings and investment vehicles.
I would never think about buying these days, and instead would do what y’all are doing. The stars don’t align every day, after all!
I love renters 😊
@@renethumann4871banks and governments love mortgagees 😂
@@renethumann4871I’m a renter . I live in a million dollars home. And pay 3000 a month.
Cool my grandpa would never have been able to travel across the US with out owning. That $500 a year was far cheaper than rent.
“I'm rich, I'm rich, I'm rich….” Checks bank account…..
😂
...and? 😒
God that created everything, can make anything happen.
“I am the Lord, the God of all mankind. Is anything too hard for me?”
Jeremiah 32:27
“With man this is impossible, but with God all things are possible”
_Matthew 19:26
“The Lord is near to all who call on him, to all who call on him in truth. He fulfills the desires of those who fear him; he hears their cry and saves them. "He will hear and help us if we worship and serve Him with a Holy awe of Him”
_Psalm 145: 18-19
“And whatever you ask in My name, that I will do, that the Father may be glorified in the Son. If you ask anything in My name, I will do it. “If you love Me, keep My commandments.”
_ John 14:13-17
“Truly I tell you, if you have faith as small as a mustard seed, you can say to this mountain, 'Move from here to there,' and it will move. Nothing will be impossible for you.”
_ Matthew 17:20-21.
"For I, the LORD your God, hold your right hand; it is I who say to you, 'Fear not, I am the one who helps you.”
_ Isaiah 41:13
Don’t think He can, know He can.
Ask God to become successful.
@@kay9056 he was rich, hence no time to reply to youtube comments anymore but rather spends time golfing with bankers
😂I😂
I’m a homeowner - but I love the questioning of whether or not it makes sense to buy. It did for me and I can comfortably afford it, but I also bought back in 2021 and could NOT afford to buy the same house now.
I do love being able to build and make it mine - currently renovating part of my basement so I have an office and craft room (I wfh), but if the timeline was different, I’d probably be perfectly happy renting now too.
Same here
I love being a home owner. Everyone is different whatever appeals to you. In the end as long as you’re happy that’s what matters. 😊
It's like comparing leasing vs buying a car. Or leasing vs buying a phone. Yes, it will still get you from point A to point B. But looking at it from purely financial standpoint is not a great idea. There are some financial advantages to owning your house, but there are also a lot of drawbacks. However, the biggest factor should always be what you want to do with your house. If you want to use it as an investment, an average HYSA will get you just as good of a returns, if not better. But if you want to use it for your enjoyment(plant a garden, setup a home gym, create a workshop, a home theater, or pursue dozens of other hobbies and activities which would be difficult, or impossible to do while renting), then you are truly living your rich life. Buying a house with this in-mind will also help you focus on what's important, without going all out and not being able to afford it.
@@IQLionhere in the UK renting is also a very precarious business and makes zero sense
Rethinking the idealized living situation ( house vs renting) is just one of the things we need to do. Prior to the end of WW2, many did not own a house; but also, we were financially better off, compared to today. So Ramiro, thank you for being honest and saying what you have.
Some of us enjoy fixing things around the house and yard. Gives purpose to maintaining a home. It’s also very satisfying to see your own progress with projects. I guess it also depends on age. As we get older, we enjoy being home more.
Also, we bought a new constuction for that reason. We bought a fixer upper at the age of 21 and HOLY CRAP that was HARD, but I did all my repairs and upgrades myself. I respect those who would rather rent, but my wife and I enjoy the comfort of being home owners.
What he failed to mention is that a landlord is not losing money when they rent to you. You are paying mortgage plus maintenance and repair PLUS a profit margin. All that is included in the rent. Plus no control over when your rent is raised and by how much
@@autchicab Landlords absolutely can lose money. Do you think they can charge whatever they want as opposed to what is competitive in the market?
Yes, let me charge $10,000 a month for this studio because I want to profit!1 What if I miss one month of vacancy? I'm still on the hook for the mortgage and possibly wiped out all the year's profit.
Ramit has talked over and over (and over) again about this concept and how landlords sometimes don't even know if they're making a profit. The belief that you are paying landlord's mortgage is simplistic because they can only charge what they can, not what their mortgage costs. Even in this video, he calls this out (22:19)!
I think the issue is that some people don't factor in the upkeep and upgrades that come with owning a home. Either their family never owned a home, and they have a rosy view of home ownership, or they didn't have to get involved with homemaking growing up and are just oblivious to the responsibility. But if someone is eager to take these things on and it's within their budget, I say go for it!
Renting makes sense for me right now, but I do look forward to eventually having a place I can work on without having to worry about a landlord or safety deposit😊
@autchicab Landlords can only charge what the market will allow.... I saw it over and over again around 2017 of people having to rent their home for just $500/mo over their mortgage, or even $500/mo LESS than their mortgage alone.... Yes, they will lose money at times
I disagree with you about the spreadsheet thing. I’m one of those people that has a pretty in depth spreadsheet where I enter all of my expenses, savings etc…. But I definitely don’t LIVE in the spreadsheet 😜 If I’m being honest, I maybe spend 30 minutes per week in my spreadsheet.
The biggest help I get from the spreadsheet is when I start to go overboard on my spending. It’s a hard reality check for me to see it in a sheet and I’m able to push the brakes 😊
Boring! Just allocate how much you want to spend on yourself and transfer that amount automatically to an account just for spending, until it gets to zero in a BLOW MONEY account therefore you won’t ever go over
As a homeowner, we need to stop thinking as buying a house as an investment, and more of a lifestyle choice. Owning is not better than renting, just a different way of living- and both perfectly valid. So for every person that wants to house-shame renters, remember there are so many pitfalls for owning that most people overlook. Renting can be a fine choice for hedging against those risks! Renting or owning should not be a status marker of how successful one is.
I have yet to see a cheaper place to live than owning a home. It is part of my three leg retirement.
1. 401k/IRA
2. Paid off home
3. Social security.
After 10 years the payments are far cheaper than rent (and that is with 0% down) and repairs are not expensive.
@ far too often people become consumed by the idea of needing to buy a home, that they end up purchasing more than they can afford. A house is only a good choice for those that are financially prepared. If one can’t afford to put down a sizable down payment and comfortably meet the monthly payments, then home buying isn’t really good choice. For those individuals, renting is fine, but they need to be just as financially disciplined to save more and putting extra money into the stock market to cover the added costs of renting into retirement.
@@AJfromLA818 why a large down payment? What is wrong with 0% down?
@ a down payment ensures that you have immediate equity in your home in case the value of the house goes down and you are forced to sell. 0% down offers no cushion. Secondly, you will end up paying substantially more for the same house in interest. If given the option of either buying a house or renting that same house, the increased interest payments on a 0% mortgage, would make renting the same house much cheaper. Of course the monthly mortgage will remain the same, whereas the rent will continue to increase year over year. Even still, If the same person chose to rent that same house and invest the difference in the stock market, renting would be the better option. Not saying that 0% down is a bad choice, just that it becomes more difficult to justify it financially.
One could also certainly get into a 0% mortgage, and choose the invest the lump sum that would otherwise be the down payment into the stock market, but again because of the higher interest payments, you would need to guarantee the returns of the market beat the interest costs. The higher the interest payments on the house, the more of a return is needed in the market. Not saying it can’t be done but it’s entirely too risky to put so much of your stake in your financial future on betting the market against your home
Didn't realize all you needed to have a rich life was faith, trust, and pixie dust
Where can I buy pixie dust..I live in the Northeast.
@@joycef8443it falls down from the heavens
😂
Pixie dust is the important part. It’s a zero sum pixie game.
Well sure, faith in your trust fund and access to a designer drug called pixie dust will do wonders!
I love the fact that I’ve been watching Ramit long enough that when he said anyone who does personal finance online should 100% expect to get yelled at about some things and I already knew he was talking about the rent vs buying a home debate 😂
Love YNAB!!! Makes keeping track of finances so enjoyable for me.
I use free alternative EzFinTrack
I agree with your view of a combined personal responsibility with external structural, socio-economic causes.
One must look really at both.
True liberation comes when both the individual and the collective have been liberated, not before.
You will achieve true education when you are able to simplify your speech.
Because I own my home outright the only market changes I need to worry about is insurance and taxes. It gives me a sense of security and stability.I do need to be careful and not get caught up in unnecessary remodeling and aesthetics and keep I need to keep a house fund for essential repairs. I don’t think owning a home is necessary for everyone, especially if you may frequently move.
Am sure you can agree that’s an emotional /psychological choice which is perfect fine though it is not a wise financial decision. We are humans not robots so this makes perfect sense if you feel secure and your mental health is at check x
@ so is choosing to take vacations in 5 star hotels… it’s what a person defines as a rich life. I’d rather return to a home that feels like a retreat that I own than go to a retreat that I can only go to a few weeks out of the year.
I can tell you as a landlord that my renter pays my maintenance, property taxes, insurance, landscaping, vacancy, capex, property management, and profit.
Real estate crashes around the world never happened, they were all fake bubbles and landlords always profited out renters. 👍 👍 👍
You must be Rich😅
I also hate micro budgeting. It was useful for a bit, but it makes me fatigued now. I love macro budgeting though. It enables me to pursue my big goals without feeling guilty about spending on other things or spending my precious time on an unpaid task.
One of the best decisions of my life was buying a house however I was very fortunate to get a nice affordable home and have only done a few repairs the most was getting the roof touched up
I really think that you can only get away with "not budgeting" when you reach a certain income. If you're under 50K a year you have a budget and it's needed. You need to have the space to safely "fail"
Here to say YNAB is awesome. Great to hear it being recommended!
Same!! Legit transformed my finances
Definitely! As someone with ADHD and a recovering shopping addict, absolutely nothing has helped me more with getting my shit together (and doing it in a way that's kind towards myself and still makes me feel good instead of hating myself) than YNAB, and it's even fun since assigning my money gives me dopamine and I love seeing my money grow.
Changed My life! But I'd love to graduate away from it, like Ramit says
I use free alternative EzFinTrack
The look of genuine shock and horror on Ramit's face at 11:45 😂
It’s the disgusted stank face at 13:24 for me 🤣
Ramit STOP! I use that first budget tracker and I am a project manager😅😅😂😂
who knew Ramit was swole like that tho! 👀 Strong in fitness and finance! Love it!
Finally!! YNAB! Yes. Can't skip leg day. But you're right also, one day, they can focus on cash management
I own my own home now because the control over my environment makes the hassle worthwhile, but taxes and maintenance costs will never end, when I can't do the maintenance any more it would totally make sense to downsize to an apartment.
It is hard to downsize to an apartment when it is 5,000 times more expensive than property taxes.
Great positivity. This video could have easily been a "let's dunk on people", but you're better than that.
The best thing I've done in my life besides having our kids is buying my house. The 3rd video has an opinion on why SHE doesn't want to own a home. We have been lucky enough to have a big portfolio, 2 529s and the house. Plus I'm in construction so repairs are fun for me :)
I like to hear things like this. I’m young and have dreams of owning a house. I just always feel guilty when every financial guru online says that renting makes more sense than buying. I’ve come to the conclusion that if it’s something I want to do, then I need to just figure it out and do it regardless of online opinions
The internet is a place where everyone can bring their thoughts a d opinions and share them with the world. You are so busy listening to everyone else that you don't listen to yourself. Buying a home for us made sense with the cost and our growing family. Do what you want because you only have 1 life. But, think first if it's best FOR YOU
I is funny… I is wealthy… people like me… I is nice… I is respectful.. now let’s get that $
Your videos continue to get better! The part where you talk about working out - absolutely awesome! Keep up the great work Ramit
HAHAHA... the second video..."WTF is going on?" You're awesome.
I love that you debunk and call out all these old beliefs (perpetuated by industries like the mortgage industry).
A conscious spending plan is just another name for a budget.
I'm in the uk, and just bought my first home. I got in the financial game late. Didnt have the financial education early on. Yes owning my own home is a lot of responsibility, but I also found a decent property cheap and its costing me almost half every month to pay my mortgage than it did to rent. That money I save on my rent is getting invested. If I hadn't done this, I'd be struggling to put much away for later and my rent would keep step with inflation. I might have to put the work in to maintain my home, but I do have freedom to change what I want and peace of mind that a landlord cant just oust me when it suits them. That might just be my version of a rich life though.
Totally with you!
Ramit… you hate budgeting!! My heart 💔 I get what you’re saying though, it does feel like you’re on a tight rope all the time even when you’re not. I realised the other day that I’ve been “living in my spreadsheet”, I’m not ready to give it up yet but have simplified it loads so I can take a step back. It feels good 😊
Your account name 😂
i don't think living in the spreadsheet or the budgets or accounts is necessarily a bad thing. for me, i like viewing those things because it reminds me of the good choices i've made and it reminds me why it's all worth it.
and i personally like keeping track of what i spend because it helps me focus on what's important, and what i want to spend more or less on.
I love renters they help with cash flow,tax deductions,Principal reduction and 2-3 percent capital appreciation 😊
The sarcasm is spot on !
Ramit’s face @ 13:06 - 13:34😂🤣😂
It really should be a meme
13:00 I feel wealthier already, I didn’t even have to recite the novel she has prepared.
I’ll just listen to the video every morning…
The own [a house] vs. rent question is not just an American thing; the same question is discussed here in Europe. For some people, it's almost a religious thing that owning real estate is the only acceptable goal in life.
I'm feeling alone on that regards, in Portugal every of my friend almost mad at me because i'm not owing a house. Oh god, i'm feeling really alone and also doubt about my decision. It's so hard. By the way, in Portugal own a house it's soooo spency related to how less we earn.
That's interesting. I saw a video a long time ago about renting in Switzerland, where people discussed not feeling the need to own a home and how that was the general attitude in their culture. That always stayed with me. But I guess different countries would have different attitudes, or maybe attitudes have changed. Either way, that was a useful perspective for me to see when I was just starting out, and I still don't think now is a good time for me to buy a home.
There's even a step up from that:
A couple in his show complained that they still live in their "starter home" 😮
Here in Brazil too 😂
Thank you for finally talking about a budgeting app that you recommend! Can you please make a video on how to do a monthly meeting? If you are not budgeting or tracking expenses, how can you know if you have gone beyond what you planned on the CSP. (It's easy to overspend on groceries and dining out)
This will be in my new book, Money for Couples. Get the book here: iwt.com/moneyforcouples
i think the CSP/Ramit is a little disingenuous in saying you don't need to budget... ultimately if you want to keep your fixed costs at a certain percentage, you need to know the number.
personally i just looked at my ACTUAL spending all of last month on my credit cards and other purchases and insurance and stuff. that's my "natural" spending rate. from there you can see if it's too high or good. and knowing that number, i based my future spending/CSP in the sense that i know each month i have roughly x money for fixed expenses, and y money for guilt free. probably, it would make sense to have separate accounts for each. so when i visit the grocery store, i'm not budgeting in the sense that i'm not stressing about a $3 difference in the price of grapes. but i do know that i can't spend $200 every grocery trip.
“I hate budgeting, use my CSP… which is a fancy name for a budget “
Right, I never understood why he says he doesn't budget or like budgets. Spending plan = budget.
The CSP is not an exhaustively detailed budget; that's what Ramit objects to. It's a higher level guideline that encourages accountability without getting lost in the weeds. Watch a few more videos.
@@rpguitar I've watched plenty of videos. It's still inconsistent. "Budgets are dumb, unless they're high level guidelines then they're ok".
@ a budget… can’t do a CSP without calculating fixed and variable cost.
Ramit you are a legend
~Only project managers care about budget spreadsheets
Dang you got me. As a PM, that hits deep 😂
We budget and we're debt free. That works for us. Ramit, one size DOES NOT fit all.
Another hilarious and brilliant clip by Ramit. Dude is a beast.
5:55 here I am just drinking my coffee and wind up getting called out to my face.
Also you got me.
This was such a great video Ramit! I thought you’d mock that second woman but your compassionate answer was really wise.
You know what else does mean anything? 82% of Americans rating their financial situation as good or very good.
People have no idea what a good financial situation is. They vastly overestimate how well they’re doing.
Medium net worth of $193,000 for a household means nothing without age ranges.
$8,000 in checking is absolutely paycheck to paycheck in the eyes of Americans (meaning it’s not rooted in reality), and $8,000 is not a lot of liquid assets for certain parts of the country with a family size of 4+.
Didn’t really like those numbers at all - seemed very flawed
I agree, the numbers are being mis-interpreted. Net worth itself is a vague term, especially if all of it is tied in home equity and not physical cash (which is the case for many people).
If you don’t own a home, many people think you didn’t make it. But they don’t even own the home yet, they’re still paying huge mortgage on it.
Don’t say it out loud or you will be labeled as “jealous “ person
I know, right?? In my culture (Brazil) it's the same mentality. The mom keeps bugging me about buying a home meanwhile my husband and I have a huge investment portfolio and don't really see the need to buy property if we can continue to grow our portfolio that way. Just so annoying that people have a fixed mentality about things and can't see any differently or accept different ways of doing things.
I totally relate to the parents leaving a house situation. I want to sell and my sister doesn’t. It’s not in a great neighborhood and hasn’t been updated since the 80’s. Such a financial burden. The money from the sale would benefit me greatly but not her so there’s no motivation to sell on her end. Meanwhile we have a shared savings account where we each put money in for repairs that could be better invested 🙄
You are PREACHING in this video Ramit, love it and thank you!!
found this channel 2 weeks ago have watched many videos a day and do not regret a single second
same thing, i've just been binging the most popular videos. i've learned so much, i feel like i already have all the common info he repeats but it's still nice to watch more videos and get a little extra wisdom
12:38 shady producers set Ramit up with this one. 😂
Ramit face when that girl say I am rich, I am rich 😂
Yeah I got all the finance tips I need from your book and Netflix show. What I really wanna know is what your hair care routine is? Ramit’s looking fresh out here.
God that created everything, can make anything happen. Don’t think He can, know He can.
“I am the Lord, the God of all mankind. Is anything too hard for me?”
Jeremiah 32:27
“With man this is impossible, but with God all things are possible”
_Matthew 19:26
“The Lord is near to all who call on him, to all who call on him in truth. He fulfills the desires of those who fear him; he hears their cry and saves them. "He will hear and help us if we worship and serve Him with a Holy awe of Him”
_Psalm 145: 18-19
“And whatever you ask in My name, that I will do, that the Father may be glorified in the Son. If you ask anything in My name, I will do it. “If you love Me, keep My commandments.”
_ John 14:13-17
“Truly I tell you, if you have faith as small as a mustard seed, you can say to this mountain, 'Move from here to there,' and it will move. Nothing will be impossible for you.”
_ Matthew 17:20-21.
"For I, the LORD your God, hold your right hand; it is I who say to you, 'Fear not, I am the one who helps you.”
_ Isaiah 41:13
Ask God to become successful.
The house comment: you forgot the biggest expenses for me which are interest, property taxes and forced insurance that covers pretty much nothing at ridiculous amounts.
That said, i enjoy my house but dgaf about what others do
I think renting is great for a lot of people. If you hate fixing things or putting time into your place rent is great. The only thing that scares me is here in Arizona apartments are being bought up by huge companies and rent is skyrocketing. Sometimes as much as 50% more. But you can’t live in fear and you can’t tell the future so if renting feels right for you do it.
I like that there is more talking about being flexible with housing. Personally I love having a house. I like fixing it up, like having tools, like modifying it. Is it expensive? Yep. But I love that I was able to put a rock climbing wall in the house for the kids, and also had a trampoline in it. When they outgrew it I fixed the wall, and the trampoline messed up the tile it was on so I ripped it out and put in new flooring. I don't think renting is wasting money, and I don't think buying a house is a waste. It all depends.
The first method works well for me! Every penny I have does a job for me! Majority of which goes straight into investments and towards next month and the month after expenses.
This is encourages me to ensure to increase my cash flow!!
I’ve read like 14-15 business, tax, investment, self help, etc. books. I can personally say that I am very happy that I bought & read your book. It was the 1st book that gave me an actual financial game plan VS hypothetical … minutiae 😊. I’m a nurse trying to do a product startup I invented to prevent kids from drowning. Been working on all aspects I had to learn since 5 years ago: design & prototyping, business, tax, investing, communication, sales, networking, marketing, etc. I now understand why successful people say that the 1st 1 million is the most difficult. It’s because before that threshold, financial momentum isn’t in your favor. How do I break the that threshold asap so I can get this damn product on store shelves? - The Dean
Manifest a cashmere sweater by going to a store and buy it. 😀 About buying a house, I enjoy being a homeowner. I only put down 11% the December before Covid. In 7 months, the value of the house went up by 25% and 1.5 years later, it went up by 60%. The housing market in the Bay Area come back down to reality a bit but it is still up 40%. I just bought the house at the RIGHT TIME and RIGHT PLACE. I'm greatful for that. I'm also paying more into my mortgage. This will lower the total interest paid by the time I finish paying the house.
Honestly that was a great template, it just looks more complicated than it is in a spreadsheet. Using an app simplifies these things a ton.
Hubby and I rent and we are mid 50's. The thing about renting is that you are under the power of a landlord. We've been in this same townhome for 5.5 years and got a notice from our landlord that he wants to sell in 2025. Now we have to move when we don't want to. We are looking for a place to buy because this is the second time now that we were forced our of a rental.
I use both YNAB to track/plan down to the penny AND a CSP because there's value in both 🤷
Yes. How will I leave 7 children one house. That’s what I often think.
One could pay the others and live there. Or they could sell it.
If the house is right for you, don't overthink it too much.
Integrate your values and concerns into your eating habits is essential. Aim for balance and sustainability, rather than strict dietary rules. health and well-being are unique to you. Listen to your body and adjust your approach accordingly. Consider what matters to you and don't let anyone crush your dreams!
I bought a house and 12 years later I have paid about $350/mo renting my own house. Its a lifestyle choice. A house is a home not an investment just like a place to rent. The advantage is stability in a hime for the kids. No rent increases and no risk of being forced to move which we yhink is critical for young kids.
Otherwise, i dont see any other benefits that isn't personal wants.
12:29 the way Ramit’s shoulders slumped 😩😂
Well explained. Thank you for bringing up this video. Financial education is indeed required for more than 70% of the society in the country, as very few are literate on the subject. Thanks to Caroline Suzan Olson, the lady you recommended.
This was Excellent. This 55 years young lady do not own home, njoy renting as I am able to pick up & go.....
Best part about owning a home is i dont have a landlord telling me my rent is about to go up $200 a month. While everything is in this world has gone up in the past 15 years, including my wages, my mortgage has stayed the same. Now, my total home expenses on a 3 bdrm brick home is a fraction of what rent would be for an efficiency apartment in Crackville. If you plan on living there for 10+ years, buying a home is a no beainer.
In Texas property taxed are outrageous. In 5 years my monthly payment on my house went up by $800 all bc of property tax increases. Rents did not go up nearly as much in those 5 years..
@@katiez688 That's specific to Texas, where you have no state tax, thus a significant source of revenue for local municipalities tends to come from property taxes. It's a system designed to benefit the wealthy, investors, and businesses the most over the working class and poor individuals.
The financial cost isn't the ONLY factor though. How much time do you spend on maintenance and repairs? How much stress does it cause when something breaks? How much time off do you have to take to wait for a repair person to show up? Or how much time are you spending learning new skills so you can fix it yourself? All that stuff adds up. I love being a renter. The only maintenance I have to do is keeping things clean, replacing the HVAC filter, replacing dead light bulbs and smoke detector batteries, and letting the faucets drip in the winter. Easy peasy, ZERO stress. That's worth its weight in gold IMO.
On the housing topic, I agree that owning a home isnt for everyone. There is a time and place for every housing situation. Renting is great for all the reasons you stated but owning is also fantastic for all the reasons you failed to mention. If the commentor stated they made a $320k profit from their home, i seriously doubt they care much about the transactional things like fees, commissions, "furniture" and all the other negligible things you mentioned. Subtract all that and you still have a HUGE deposit hitting your bank account which, if you kept your house for more than 2 years, is 100% free from capital gains tax. Owning a home and paying it off CAN be very lucrative. You can earn mailbox money on a bigger house that you owned when you had kids and now that income is paying your mortgage on a smaller home for you and your spouse. Now you're living rent free and will likely have not just one home to pass down to your kids, but two. Another thing that is failed to be mentioned is that when comparing investing 300k to buying a home for 300k is are you paying cash? If not, most people wont be getting a loan for 300k to go drop in the stock market. Thats a crazy gamble if you dont have the assets to back it up. At least with a house, theres a very limited chance the market will decrease amd your home loses value. If you get in a pinch, you can always sell and walk away with a little equity cash. Renting, you walk away with nothing. I dont think the issue for everyone is able to be compared in an apples to apples scenario. I believe there are many factors at play and that people who have careers and intend to stick with the same employer long term absolutely should consider buying. The pro's definitely outweigh the cons. Will there be expenses to owning? Sure! But the cost of renting is nearly 2x the mortgage note. Imagine paying $1500/mo to the LL when you can be paying $750 to the bank and investing the other $750 in the market. Omg, my water heater broke? Pull out $1200 and buy a new one. Move on. At the end of the year, provided you dont have any MAJOR expenses, you save idk.. a s-ton of money! Sure theres insurance and utilities and whatever but even when all these costs are added, there is still monetary value in owning over renting. The only value i see in renting is flexibility.
Not to mention....as a renter you are literally surrounded by the crush of humanity around you 24/7. I bought a nice house out in the countryside and have plenty of privacy. No loud neighbours to contend with. No loud city noises to deal with. Surrounded by nature is the best thing about our house.... You're not finding that in the city.
I think the spreadsheet folks in the comments are missing his message. Spreadsheets are a good start if you don’t know how to manage money but eventually once you implement systems such as automating investments, savings, retirement, & autopay most expenses, it will free you of having to track expenses weekly. Instead you can look at those systems monthly and make small tweaks if necessary.
Also if you are a spreadsheet person in the comments, chances are you did not read his book and that’s okay too.
Wait, I don't get it, people who rent don't take out their own trash in the US?
The chants help your subconscious thinking. I do the sleep meditation love it. Better than playing white noise😊 income increased by 21%😮 bought my house 20 yrs ago mortgage is $621 monthly. Got a grant to keep up repairs. 😮
When he talked about tracking every dollar. I thought he was going to drop the every dollar app 😂
I have a house, and I f*cking hate taking the trash cans lol. I am 35, and I’ve made $1.1 million simply investing in stocks (not including my 401k), and I’ve done the math. Had I not bought my house in 2022, I would have an additional $350k in stock gains.
I thought “oh buying a house will help me build wealth” and that’s true if I don’t invest in stocks and just blow my money. But because I do aggressive invest in growth ETFs buying a house has been a horrible “trade”. Once I can sell without taking a loss, I’m selling this POS and going back to renting-I’ll take whatever proceeds I get from the house and just buy more stocks.
Have fun renting. For me buying in 2014 with 0% down I put that down payment into my investments and this brand new home had $100 more payment after taxes and insurance than renting. It has been this way every where I looked at buying a home. Now after 10 years renting is $600 more a month and owning hasn’t changed and my only repairs totaled up to $1,000
@ yes I will, because I’ll make so much more money renting that owning. My net worth with a home after 30-years is projected to be about $3 million-not bad. My net worth renting and investing is projected to be about $7 million. That $4 million difference more than outweighs the rent 30 years from now. Not to mention it will continue to to grow from there.
A house is great if you just want to get by. I’m trying to ball hard and have multiples of F’u money.
imagine living and having a career in New York, and then one day a lawyer calls you and says did you know your parents left you a home? Its in Montana"
No thank you!
Any financial strategy that depends on "manifestation" is not likely to be more useful than a plan (any actionable plan is better than none.)
Yeah what's the point of budgets, I don't understand. The rent, phone bill etc will cost what they cost regardless.
We have bought our first home at 41. The intangible value of it is immense for us. Obviously, you cannot put that on paper and calculate.
Renting doesn't throw away money. It buys flexibility.
I've used the same spreadsheet to budget and plan for over twenty years.
The rent is mentally tough when the cost keeps going up and up. But, obviously, so does the cost of owning or renovating.
I don’t think you can simply overlook a home as an investment. Yes, there are opportunity cost, transaction cost, and expenses you have to consider but in the right home and location, purchased at the right price, there is potential to get a very good return. On top of that, you have to consider utilizing the equity, especially if you have a very low interest rate on your mortgage and how that can help you with other investment opportunities. To someone who is about simplicity like yourself, perhaps this isn’t that appealing. But I don’t think you can generalize that owning a home isn’t worth it. I would say, like any investment, you need to be selective.
We roughly do 50/20/30 and I still use YNAB to budget my guilt free spending. Good for anyone else who doesn’t need to budget because they don’t live so close to the edge of wanting to spend everything they can without tracking, but that’s not me 😂
Exactly Ram it 💯 💯
For some people, a house isn’t a good investment because they have a different idea of a good life. In retirement, having a paid off house can be huge because it can mean you have a low cost of living during those final years. You do have to account for property taxes and long term maintenance costs which can still range from $400-1500 a month. And those with an HOA can expect to pay even more! Where you live can really impact those costs. My 83 year old mother has a house with a large property and she pays $350 a month in taxes, $150 a month in property maintenance, and about $200 a month in repairs/replacement costs. Repairs and replacements are things like water heaters, appliances, garbage disposal, water softener, reverse osmosis, ceiling fans, dishwashers, washing machines and dryer. Property maintenance includes biannual bug spray, termite treatment, sprinkler system maintenance, AC system maintenance, replacing outdoor lighting, tree trimming and yard cleaning. Bigger maintenance like window replacement, door repairs like weather seals, septic system clean out, roofing repair due to storms and weathering, painting both outdoor and interior. The costs of owning a house can really go up once you get to an age where you can not do the work yourself. Expect to pay $10-15k per year to cover your annual costs of owning a house long term. If you plan ahead and do a full replacement of your appliances and big maintenance expenses like roofing, painting, and septic clean out right before retirement you can avoid these problems after retirement.
My bank app will break down my expenses by category automatically. It was really interesting to review.
I think the thing with houses is that it is a kind of forced savings.
Yes renting can be cheaper overall but most people aren't going to save the difference. They're going to spend and waste that money.
Homeowners are paying their mortgage and home repair but they money doesn't disappear. Most of it remains as equality so even if they spend everything else they still have something in the house.
That is why most studies show that homeowners have much higher net-worth than renters.
I would never buy the house I live in now for what its worth now. I can't blame other people for not wanting to do it either, especially if you aren't married. BUT if i could go back 8 years I would have bought two houses instead of one.
13:00 was actually incredible
Id never brag about mortgaging a home. My then-fiancé-now-wife and I bought in a nice area and we were lucky to get a 1450 mortgage with 20% down. Yes, we have decent equity in the home, but its just another means of diversifying. We have plenty of investments to do what we want as long as we still keep investing and saving at out 18-30% rate that we do...
I am curious how this applies to independent contractors like musicians. Typically we are advised to save more and track everything business expense wise. Could you do a video on this subject matter range?
Ramit, could you please talk about how you suggest lifelong renters should approach housing in their last decades, especially if they want to age in place? I understand why it might be smart to rent for most of one's life, but being subject to your landlord's decisions at 80 or 90 doesn't feel secure.
25:15 - forgot to include annual property and school tax 🤣🤣🤣
My favorite take away is “live outside the spreadsheet”.