Depends, my folks bought a 700 sqft house in 1998 for !5K, it was worth $85K by 2015, thats a 567% increase in less than twenty years. Renting would have had lower cost, but is all expense, where as buying is investing. However, I do believe people should by well below their means to pay as little interest as possible. If possible, live in a garage for 5-7 years, save like crazy, and buy the house CASH. The problem is, most people would rather not sacrifice for a short while, to enjoy a GOOD long while later.
There are added cost associated with renting too - the building will be insured but you usually have to take out 'contents' insurance for your own stuff. Bills are often extra and then there's moving costs. Best scenario is to buy your house then sub-let a room to someone else so they help you pay off the mortgage ;-)
Idk where you got $550 from to rent a $100,000 house. Maybe its just that I live in CT but my ex had an absolute garbage studio apartment in a horrible neighborhood and that was $500. I've NEVER seen anything even that close to low on any house whatsoever. Poor information
Lol, that's very careful and wise advice. In rare cases, like mine...it turned out pretty good for me. I wasn't even the lender, I was the borrower. I borrowed an amount, it helped me alot. And I paid it back diligently, and with interest that wasn't even requested. I just wanted the transaction to be a win win situation for both of us. The interest the person made in the particular time span, would not have been able to be made anywhere else. So The loan to me was actually an investment from them. And the loan was used to generate more income on my End. But this is rare case as most of the time it turns out badly as u correctly advised.
I don’t borrow money usually but when I do, I make sure the lender is satisfy. But now I lend my friend some money and find it difficult to get it back
for those who dont want to watch the video but want the points 14-kids are expensive 13-dont be afraid to ask for a promotion 12- cheaper to rent than buy 11-invest in health and education 10-dont invest in the unknown 9-dont borrow to pay debt 8-meet new people and friends 7-better to buy good quality clothes 6-avoid impulsive purchases 5-start saving now 4-eat and cook at home 3-put salary into rainy day account 2-communicate finances to partner 1-find passive income
My son was paying $1500 a month rent for a one bedroom apartment. So after years of paying a landlord, he recently bought a condo for $1700 a month, but he gets equity and ownership.
And he gets property taxes, which deductiblity is now in limited to $10K, plus homeowner fees, and a liability on his balance sheet. Don't fall into the idea that property always appreciates. It doesn't! I know all too well as I live in California and I'm in my 60's.
14 facts you should know by the age of 30 14: Children are expensive 13: It’s not embarrassing to ask for a promotion 12: It’s more profitable to rent than own 11: Invest in your health and education 10: Don’t invest in something you don’t know well 09: Font borrow to pay old debts 08: Stay connected with your friends and meet new people 07: It’s more efficient to buy good quality shoes and clothes 06: Avoid impulse purchases 05: Start saving money for old age now 04: Eat and cook at home 03: Put part of your salary into a savings account for a rainy day 02: Be on the same page with your significant other when it comes to finances 01: Find a passive source of income Did this help you?
Your calculations on renting versus owning a home are way off and inaccurate. Depending on where you live, rental prices are sky high. In Michigan, for instance, mortgage rates are very low and small apartments or homes, in desirable ares, are much higher and prices continue to climb. I don't know where a family can find a place for $500 per month. Renting only makes the landlord rich.
detphemale I was just about to write the same comment. Over here in Oregon, it’s the same. In the desirable areas renting can be between $1,300-$2,500. The average mortgage payment for a house in these same desirable areas with a fixed rate is closer to the exact same amount or even less based off of refinancing rates. At least with a mortgage it goes into home ownership. With rent, it doesn’t go back to you. 👍🏻
Even though rent and mortgage is the same, buying a $400,000 home for 30 years turns out to be around $650,000 after interest. This is not including all the maintenance and appliance or repair work within the 30 years that is otherwise covered by the home owner if you rent. That should easily bring it to around $700,000. If you invest $100,000 into something with 7% return you get $7000 back yearly which is around $600/month you can subtract from rent. In this case, renting is definitely a better financial decision but the exception is if the house is in an area where property value is booming.
Renting in Portland Oregon and leaving the area because I cannot afford to rent the housing anymore! :( my Land Lords are enjoying their wealthy lives though.
The problem with renting is that the rent keeps going up and you have no control over it. However you can raise your mortgage payments, paying off the mortgage early and saving you money. When I bought our 1st house the mortgage was 668 including taxes a month compared to only 465 for the garbage dump we were renting. Five years latter I had raised our mortgage to 740 a month, compared to the rent at the dump which had risen to 800 a month. When we sold after 6 years, the value of the house had gone up 40,000.
Also our second home was paid off in 14 years, leaving us mortgage free and with money to renovate as we want. The people who did not buy are still paying rent, with even for matchbox size places cost about a 700 more than we pay in taxes.
Renting (a room) is a good short term strategy. For the long-term it is better to build equity. When your young you want to be flexible. When your older you want to be stable.
Money paid on rent is an expense, money paid towards your mortgage is an investment. The former doesn't result in anything after 20 years while the latter leaves you with a property that you fully own.
HB L ...if within those 20 years the housing bubble don't burst and you get forced into foreclosure and lose all your investment. Factors which you have no control over
That depends when you purchased your home. I purchased mine in 2009 after the bubble for 159k versus the last guy before the company that bought it to flip it for 330k. Even if another bubble were to take place, that just means we are going to buy another home for cheap and rent the current home we live in.
Jean Gorrin It doesn't matter how much the house costs. You're putting yourself into debt for a very long time to get inside a market that bursts so regularly. Even if it mattered, this video is in refference to the average joe that don't have stacks of disposible income/savings anyway. Meaning that housing prices after bubble bursts will most likely still be relatively expensive at that particular time since their income will most likely also be hit by the burst. EDIT: Grammar
If you look at it with that logic then anything you purchase through a loan is going to put you in debt. It is how you invest that home and your lifestyle that differs. If you live by your means (which most do not) then again buying a home when it is cheap after a bubble (which we did) can benefit. The only way it does not benefit me is if I tried to sell it. But if I rent the home out (there is risk but you can do the vetting before you just trust anyone) then you can continue to collect on the home since you can rent out for more then you pay on mortgage. Most people in South Florida prefer to rent then buy, so it is to me and the wife another source of income. That is my point.
Owning a home shouldn't be thought of as 'spending' money, it's an investment that typically appreciates in value. The costs are really financing the debt, the rest is just being put into equity. Renting should be not be a long term solution.
ImKibitz the total cost of ownership of a house is much higher than just the interest payments. You really do end up spending a lot more on a house than you do renting. The benefit is that it's yours to do what you want with, and houses are usually a lot nicer to live in than apartments.
In the short term of course costs are higher buying, in the long term it's SIGNIFICANTLY better to buy though. For example, once you pay off your loan you have a hundreds of thousand in home equity whereas if you rent your entire life you're still in the same spot you started. The short term costs you pay (down payment + home maintenance) are negligible for the long term value of owning property and renting for the long term is one of the worst financial decisions anyone could possibly make.
ImKibitz if you rent, you can invest the difference, and that will more than make up for any kind of equity that you have in your home (plus it is much more liquid).
I can't drinking Starbucks!!! It tastes to good. Try Java or chocolate chip frapp. I like to add mint syrup and no whip. BTW Java has coffee in it but chocolate does not but other than that they taste the same.
A) If renting was better than owning, then why would a landlord buy a house to rent it out to you in the first place? If renting is better for person X then owning, it must mean that the renter is receiving more value than they are paying for. If that's true, it means all landlords are receiving less money than the value of the service they provided you. Why would anyone do that? B) Simply because the landlord 'pays' for maintenance doesn't mean the renter gets it free. Maintenance costs are part of the rent you pay. You, the renter, pay the maintenance costs every month with your rent check. C) Depreciation of homes happens much faster with rentals then owner-occupied, i.e., homes get 'used up' faster. This means the rent has to be higher to compensate the landlord for the higher levels of depreciation relative to any appreciation of the home's price. D) Even though the landlord 'writes' the check for property taxes doesn't mean the renter doesn't pay them. Property taxes get capitalized into the rent just like maintenance costs. The precise term is called 'tax incidence analysis' and the level of tax shifting depends upon the elasticities of supply and demand relative to each other. E) If you are going to be moving a lot, then yes, renting probably makes more sense since selling a home has high fixed costs. But there are many different factors at play. You have to weigh these factors yourself.
If you already have lots of money its ok to buy but if you are taking loan to buy it may cost you more and home is not counted in asset as its your house you stay in it, you can invest that money in some better place
That makes sense if the landlord actually owns the place but if hes also payin mortgage then theres not much gain. So if you can pay off a house and rent it then it could be a good investment. But for regular people thats not possible especially if u live in cities like NYC
@@bbygrlpt2 that's why its smart to buy multifamily homes...if you have 2 or 3 families paying rent every month mortagage is handled and then some. The issue people have with buying is they wanna buy their dream home or a starter home or fixer upper just for them. If you can have other tenants paying your Moraga off most likely you can raise the payments and pay off the house more quickly. Of course this all depends on other factors but it still makes more sense than buying single family and then renting it out because then yeah...the landlord isn't really profiting off of that.
virendra singh if you decide not to own you’ll have to rent anyway, which increases 2-5% percent anually. Whereas if you own you pay a fixed amount every month and you build equity. While giving half of your money to a bank in debt is bad, It is worse to give it all to a landlord.
My parents were 32/34 when they had me. I thank them every day subconsciously because they were stable and knew how to be parents because they were officially not kids anymore. 24 year olds having kids are still kids themselves.
Ashton--When my parents were born in the 1930s, it was not unusual for a girl to get married at age 16.........not even fully developed physically! My how times have changed.
Love that comment. Kids having kids is no laughing matter. And if you do have kids young i would hope they are secure in all matters of proper development in someone. People nowadays are ok with having kids with someone you are not married to or even with at all. Thats crazy to me. Phornication for contraception. Thats animalistic not progressive.
Ashton Colby i had my first kid at 23... already had a house, 100k car (not parents money, and no college degee) and a wife. 2nd kids at 25 and and a rental house. Some of of us think ahead. I wanted kids young, so i could still have a life when they move out and I'm only 45-50
Only in the 21st century are 24 year olds considered kids. Aren't average lifespans significantly higher today than in the last 100+ years? If you're only living to 50, and have kids at 25, you're kids miss out on parents and grandparents for most of their lives.
Maybe in some countries real estate is getting cheaper. But in most other countries, real estate keeps on getting more expensive by the year, where millenials are having a hard time to just have their own place to live, since the increase in their pay rate is not as high as the rate of inflation and the increase in the real estate value. Bright Side's case, as mentioned above, maybe true in the US or some other western countries. But in most eastern developing countries, my case happens all the time.
Buying a home is one of the best investments you can make say you pay rent for 20 years on a property, guess what, after you leave that property, you don't own a single piece of it but if you pay mortgage for 20 years, you are slowly but surely gaining piece by piece of that property, and buying a house doesn't tie you down, if you can get a loan on the house, and decide after several years you want to sell the house, you can probably make extra cash because price of property almost always goes high
Buying a home for others to rent from you so that the mortgage gets paid and eventually becomes liquid profit that can be sold or occupied anytime as well as offers tax benefits, you (rent) so you dont pay property tax insurance maintainence etc. And you live in a home you purchase whenever you feel that is the option for the wealthy. Just smarter way to go. As long as you are patient and bide your time everyone wants that instant gratification. But takes money to make money is rule #1 and #2 it takes time to make money. And #3 Risk alot of risk.. its risky to own a home you dont live in that you rent to ppl but much more risky to own your own home after 30 years spent in it, expecting the same R.O.I. you put into it. Mind you, you could make the ROI you want but why wait 30 years someone is always looking for somewhere to live. As property value goes up you charge more for someone to rent from you mortgage pays for itself. Eventually profit. But its dumb to buy a house for single family to begin with, you buy MDU (multi dueling unit) 4plex@ 1000 in rent/ea. Is nearly 50k. And its treated as one mortgage. Riddle me that. If you think its a bad idea to rent in a home and pay someone else more than you could be making off of others. Its like putting money into a simple savings account and expecting real compound intrest.
Im more of a lavish person who never thinks before spending.. if i go out to buy a top even on tight budget..i end up buying 3. This video was very helpful for me for showing the money movement in hands of experienced people teaches lesson for younsters.. thankyou.. i will nowonwards follow these rules and check how much my life will change..😊😊😊
Where are you getting 7% interest on cash? Also, you're assuming that someone renting has they $100,000 in their bank to start with. They don't - that's why we get mortgages!
The Missing Variable That's still assuming that renters' have $100k Anyway, I've no idea what that account is. I'm from Britain - best savings rate here is 5% on cash, and that has a maximum amount you can save monthly (usually £200-250).
TH-cam money!. I’m from New Zealand and you would be lucky to get 2 percent on a savings account since mortgage rates are so low here because of how expensive houses prices are.
Wanted to add my opinion on #7 buy good quality clothing and shoes. While I agree, a lot of people might think that is mainstream good quality brands. Say Armani or Gucci, but reality is these brands WAAAAY overcharge. You want good quality at a reasonable high price, and often mainstream brands will not be as good as truly good quality unknown brands. Although it is more work, learn the basics of how to spot good quality clothing rather than blindly trusting name brands and high price tags. That will be all...lol
So true KEN... You don't want to buy a label, per se!! But, as I get older I SEE that I need GOOD QUALITY shoes!! The cheap ones, not only fall apart way too quickly, but don't properly support your feet, causing not only pain, but allowing a decline in the health and strength of your feet!!
I'm not sure of the conversion to/from rupees... but I contend that good shoes cost $60-100 USD. My last shoe purchase, I got Skechers... NOT BECAUSE of the name, but I picked them up, they had a little weight to them, they weren't completely inflexible, but they didn't fold right over on themselves like some of the other shoes (including expensive NAME brands). AND they were totally COMFORTABLE, felt like they were hugging my (relatively flat) feet!! I got one (pr.) athletic shoe, and one (pr.) Oxford... each around $60.
2:24, 4:05, 4:59, 11:03. Great list. Keeps you on track for what you should be thinking of in terms of personal finance. It’s definitely not exhaustive but it hits the basics pretty well
Name one bank that has a savings account with a 7% interest rate... Where does this channel get their information from? They need to start citing their sources otherwise they lose all credibility.
7% bank interest??? $550 for renting a home??? Yeah ok! Stop spreading fake news and false information. If anyone believes this they are just as bad as this video.
I’m literally a slap in the face of this video. 21, married, 1 year old boy, Web Developer at a respected company, didn’t go university, renting with a little cushion of money left over after bills and in a position to own my own home within the next year or two...
Friends betray and diss you once jealousy arrives, renting is only cheaper for those that are unstable and cannot settle with a good plan for their lives, high quality clothing???...but every type of material no matter how expensive.. shrinks and rips!!!... If so, R u really going to wear the same outfit for 30 years?
Rent is NOT cheaper than buying! No where in the Country can you rent a $100,000 home for $550/month. It would be around $750-900/month maybe more depending on location.
I live in Tennessee which is one of the more poverty stricken States as far as pay wage. You can't even rent a 1 or 2 bedroom apt for less than $550/month.
Chad Crawford Like you said, depends on where you live. Los Angeles, San Francisco, New York City are some of the places I can think of that would be more expensive to rent rather than buy.
Well that aint true. Renting is not putting money in someone else's pocket. It's renting a space for a temporary living. Buying is better if you stay at the house for at least 12 years. And renting could be profitable only if you save your "spare" money for investments, but most people arent assiduous in money except if they have a mortgage to pay!
head hamer i doubt it, if you go to live somewhere else yo can rent the house that you're paying and pay the monthly mortgage with thst, its an investment.
Investing in real estate gives you many opportunities like building equity, rental income, and ownership. I would recommend on staying away from renting unless you constantly move.
zachparade if you own one house you can rent out a room and have someone else pay your mortgage or at least part of it. better yet have two houses paid off amd everytime that comes in once you deduct property taxes is profit.
Cooking at home may be cheaper if you're cooking for more than 1 person, but if you're a busy bachelor, especially one living in Sicily where food is cheap and good quality, eating out actually saves time, energy and money.
This probably applies purely to Americans. Decent food here is expensive, more so if you eat out. Be ready to spend half your grocery bill on a single meal here.
I live in subsidized housing. My rent is $0 because I have no income. And when I do have an income, my total rent will only be 25% of what I make in a month.
a friend of mine living in England went from paying 1200$ a month for rent to paying 1500$ a month for mortgage on a house they will own in 10-15years with his girlfriend, they both work so i guess buying will indeed end up cheaper once they own the bloody thing
My husband and I are soon buying a house. We pay 500 euros in rent at the moment. When we get a mortgage, it'll be the same (give or tak a few euros) and we'll own the house in 20 years. We'll be in our early 50s when we own it outright
Where I live, many of those rules don't work either. This is definitely for US and maybe for some regions only. It is for living, clothes, saving accounts etc.
Kids are indeed expensive. If you still want kids in the future though consider sustainable living. I was checking out some videos on the topic and one particular one stuck with me. It featured a married woman with her kids talking about her family saves. The make their own almond milk, use cloth diapers (I know it sounds yucky having to clean them but they do save money on dipers), buy used good condition clothes (showing off name brand isn't everything), and many other things that ultimately save them money.
I cut the video off when it was talking about a "bank account" paying 7% interest on a measly $6K deposit. I don't think this person has any clue what reality is like anymore.
Hmm, I have 4 kids and they don't cost anywhere near $1000 a month (combined, even), and if you believe that renting is cheaper than buying you are high. I pay half as much for my mortgage as I did for a rental, and I am building equity. Haha, 7% at a bank. This whole video is terrible.
It's not just how much you pay for rent vs mortgage. It's property taxes, costs for repairs and upkeep, etc. Factor all of that in and it's definitely cheaper to rent.
Negative. I bought a house in... 2010? 2011? I dunno, I forget now. I made 100k on it when I moved in 2016. Repairs were minimal. Even if you don't make that much, the truth is that you are essentially paying yourself through equity. Rent is tossed in the trash. So not only did I pay LESS than if I had rented (I live in AZ where buying is typically cheaper than renting), I got the money back and then some. Renting is fine if you plan to move every two years, but holding property for an extended time is usually a winning option. Even if the market tanks, eventually it will come around, much like stocks. Right now people are freaking out when there is a dip, but I am looking out at least 20 years. If my property gains value, it will tend (I am not saying there is ZERO risk) to outpace my mortgage with the 3.25% APR. Property taxes are property taxes, but I think I am paying maybe 1500 a year so not a ton when looking at the big picture. In other words, it is not DEFINITELY cheaper to rent. Even when it is cheaper, equity is a real thing, and is a real consideration.
That depends on the metro area you live in. For a lot of people it isn't worth it and for some it is. For example, if I were to buy a home the down payment itself would be $200K and the monthly mortgage would be $4K for 30 years. If I instead put that money in the stock market and invested the difference in monthly payments ($2K) I would come ahead in about 10 years time. There are of course situations like yours were it is cheaper to buy. But for a lot of people it's also the other way around.
Peter Piper picked a peck of pickled peppers.A peck of pickled peppers Peter Piper picked.If Peter Piper picked a peck of pickled peppers,Where's the peck of pickled peppers Peter Piper picked?
Agreed, it all depends on where you want to live, or retire. I got my house over in Kansas for 70,000. The same property in Colorado along the front range goes for between 200 and 300,000. I will be out of debt by the time I retire. And I will own my house.
I am married but these problems don't apply to me. I live in my parent's house lol. My parents like grandchildren though,and they don't want to be alone.
@@theoverlordus502 no it doesn't marriage license and birth certificates are ways that the government gets into our pockets. When marriage was created by the Most High, he never stated anything in the Bible about a marriage license. We have been bamboozled in this country. That's why most of us are one paycheck away from being homeless while the top 1% are taking vacations around the world carefree.
It's not good for man to be alone, but if you must you must. There's more women on the planet than men so...... if one does not fit, try try again. I love being married better than winning the lottery. A man that findeth a wife, finds a good thing. You can find that in Psalm. The law and the prophets ring true.
My friend, I appreciate the time you spend to inform us financially. As of last week Wednesday, i count on $2,000, what do you suggest i should invest in?
I like Bright Side but this video is way off target. I have made over 300,000 on my house in the last 15 years. I'm in my 50's, retired with no mortgage. Rent is forever but a mortgage can easily be paid in 15 years. Always own, never rent a house!
Congrats on your earnings! It's all about perspective though, maybe you could've made $400,000 if you put that money in stocks. Who really knows? Yes, rent is forever, but so is property tax, HOA, and property insurance. Not saying that renting is better, but everyone should always keep an open mind!
@@alexp3752 Doesn't matter if you have kids or not. Whilst renting, you may as well be throwing that money away. A mortgage in many cases is far cheaper than renting, plus you own a house at the end of it. Renting can cost more and you're left with nothing at the end of the rental period. Our kids have all left home and have their own lives now. We own our house now. Do you think we'd be better off renting?!? There are very few circumstances where renting makes sense. Especially long term. How old are you out of interest? When I was younger, I had a similar mindset about a house/apartment was just a place to sleep, eat etc. Now I look at my house as not only a sound financial decision, but also a somewhere that I love to spend time and relax. Our house is retreat from the day to day madness that is the modern world.
Rent here in VA starts at 450 and up so it depends on where you are. Plus you are responsible for any and all breakdown setbacks or damages to the house when you own a home. After seeing the struggles my family members have with paying for fixing things around their house I’m not running in to home ownership
That's really easy when you're able to work. Many people, like me, become disabled way before they even hit 30. I was in a car accident when I was 21 (I wasn't even driving!) and I tried returning to work several times-much to my severe pain and an angry boss. Disability's SSI pays something way below the poverty level and it's impossible to live on without assistance. It's super easy if you have a halfway decent job, or even minimum wage and a brain, to live decently. What do you to save money to spend for necessities like health care bills that aren't covered when all of your money goes to rent, electric, and food? +Burt Gummer It's not always about "discipline"
Mandi, there are many ways to earn a decent living working from home or even part time, starting a TH-cam channel about your disability and how to over come it, for instance. The age in which we live allows people of all abilities to earn. As long as your mind is sound, there are lots of things you can do and I'm sure the late Steven Hawkins would agree. Good luck.
Global Adventurer -WE are not all fortunate enough to be able to live within our means, even with absolute bare minimum amenities. Of course saving is desirable, but difficult if it means you can't eat or pay the rent :P
If your monthly costs are $1000 and your income is only $800, no amount of discipline will help you. I will grant you that for many people what you say is true - but not all, of course :)
I highly disagree with the renting part. Renting is sometimes cheaper at the moment but after your mortgage is paid off, You'll be saving so much money. I'm a homeowner and my interest was 3.25 for 15 years. I'm paying $1000 for mortgage. while it was $1600 for rent before I bought it.
You're right it can be cheaper short term, but think about this, $600 a month in rent , after 5 years you've paid your landlord $36,000, where if you owned your home, that money would be invested back into you. If you then sold your home after five years, not only would you get back a large portion of what you paid, but you would get all the extra money your home gained in value, which on average is about 7% a year, higher in some places. Owning is certainly the better deal in the long run, even after just a few short years. You do have a point though.
When i reach 54 i payed off my entire home. No loan, no rent to pay with my small pensionmoney untill i die and i can leave this life behind with a nice gift too my kids or family...
Kim Verduyckt Your generation is lucky. I can only afford a car OR college education OR moving out of my parents house. The economy is only good for billionaires and bankers, but bad for 19-35 year olds.
i understand the struggle these days... Buying property here in Belgium is almost mission impossible for a young couple or single person without the help from your parents. I am 36 myself, buth i had the chance to buy my own house when i was 24. I was financialy able to do this and i am glad i did it. Buth i do realise this luck is not for everybody.
I lent my best friend money for what she deemed an emergency 25years ago.initially she said she would give it back in a week, then a month. i slowly withdrew myself from her but about five years later i had to let it go realizing the friendship was more important than the money.
There's the hint that carries all the others: never spend more than 90% of your money. If you earn 1000, plan to spend only 900 and never more than that. Within 10 months you have an extra "month" of your earnings that can save you from emergencies and you can also spend on good and cheap oportunities. That means, when you don't save 10%, the initial 1000 costs more than 1000. And when you save it, the 900 will do the same the 1000 does and still guarantees you some financial security.
Cleiton Oliveira nothing offensive but if you're spending 90% of your income per paycheck, you're spending too much. 60% is a better zone to be around if you can manage it. As an example the credit union I'm with won't even allow me to pull out a personal loan if my debt to income ratio is over that amount. This is because they take into consideration standard cost of living after debts owed and fixed expenses are calculated. Of course, not everyone can make that work but if we use your example of 1000 and can manage the expenses down to 600 then in two of the pay periods you have 1200 instead of 200. Sadly, it's easier said than done lol
Thats good advice - so do you choose not to eat, or not pay your rent, or have no utilities? Your principle is good but not always achieveable. (read comment from Mandi , above)
What about the factor that you can sell the house on and as population increases supply and demand increases which means a house you bought for 100k 25 years ago is now worth 200k from the demand in the area and increase in population
Courtney-Jai 100,000 becoming 200,000 in 25 years is a return of just 2.81%. I know for a fact that the US markets have done 3 times better than that in the past 25 Years. So for instance if you had invested in the US markets 100,00 dollars 25 years back and stayed on rent, you would surely made atleast 2 times more that 200,000 dollars that you expect making from selling the 100,000 dollars house. Think about it.
Chirag Shah I was just making a point if was in property investment I would probably the statistics of financial growth, the way I see it the population is increasing therefore the demand is increasing and with that the supply becomes less making it worth more
Yeah, thankfully the reality is even better than that for homeowners. And in the scenario you describe, rental prices likely go up too, making rental even less attractive.
He also left out the part of eventually paying off the purchase verse renting forever. Also 7% return at a bank is currently a flat lie. Somewhat shallow financial analysis, since he really just looks at a static one month/year perspective. But we can always just do math ourselves so there is that.
Long-Term I think buying is definitely the better option, it creates an equity pool for you to build rather than just paying rent. Renting can be advantageous though. For a short-term living situation or maybe you don't have job history yet, renting can be useful. Plus, with the added costs of owning a home (lawncare, maintenance, improvements, etc.) buying a home can become very expensive, especially over time, while your 2-3% return could be off making you 7+%. I suppose it's an opportunity cost but I still feel that buying real estate, and buying it smart, is better long-term.
+yoyo What this video is trying to say is to put the fund in investments other than real estate and leave those with your kids. Real estate isn't the only investment option.
First bulb; 2:19 Second bulb; 4:03 Third bulb; 4:58 Fourth bulb; 9:44(lol) Edit, i know i'm not first but i didnot cheat. Love your vids, keep it up.👍😄
Dee Jarvis yeah... just do like everyone else. Have kids get a mortgage and work your whole life with three days off a year. Yup. Just do like everyone else because how can the masses be wrong.... smh
chiCo andtheMan Because maths. At the end you own a property which you can live in or sell. Do you want to rely on the state in your old age? If our parents had been able to do this, maybe we wouldn't even need to rent or buy and could actually live the dream. It's not about 'sticking it to the man' it just makes good financial sense. :D
Depends on how financially inept the individual is when it comes to handling money. Your average person that rents and ends up spending all their money they could of saved/invested. Then yes getting a mortgage and buying a property will work out better as it acts as a 'forced' savings account. However, if you rent but invest that extra money you save compared to a mortgage, in either a fund that returns 10% or learn and invest in individual stocks for potential of 10% and higher returns yearly. Then I would say renting is actually cheaper. So yes, for the masses, buying is actually better as it works like a 'forced' savings account. If your prepared to put in the time to learn about investing, and put that extra money from renting in to ETFs, other funds or individual stocks. Then renting is the way to go for financial freedom.
Saying renters don't have to pay taxes or for repairs shows a lack of understanding. Who do you think is paying those things? The landlord because they are nice? Rent includes taxes and repairs. It's just not broken out for you.
My rent is a set amount each month without taxes. Am I missing something? They also cover repairs if something malfunctions. Lived in two places in California where this was the case. Was I just lucky?
No, what you describe is how it appears to the renter. You have a set rental rate that you pay to the landlord. When a landlord is deciding what to charge for rent, they add up any mortgage on the property, property taxes, property insurance, estimated cost of repairs, and a margin for profit. This is how they calculate what you pay. Even though those items are "taken care of" by the landlord, and in their name, they are using the money you pay in rent to pay them. Otherwise, it wouldn't be a profitable venture for them. So, if property taxes go up, the equation changes for the landlord, and the next time they set their rental rates before you renew your lease, your rent will go up to cover the increased property tax costs. This is why renting over the long term, on average, is almost always more expensive than buying: you are paying all the same costs (mortgage, taxes, insurance), plus a profit margin for the landlord for basically managing those logistics for you. And, in the end, you don't get equity in the property. They do.
Exactly. It drives me nuts to see videos like this with ridiculous claims like this. If renting is more profitable vs. ownership, why are there companies and people who are making a very lucrative career out of renting to other people?? This alone, not to mention the other fallacies in this video, tells me all I need to know about the producers of this series: they're morons.
The Free Mill you are correct. But if a renter does their research by looking at the areas rental market rate he/she technically isn't paying for whatever the landlord itemized. I say this simply because it's the going market rate for his/her size home.
renting versus buying a home varies depending on where you live. where I live my mortgage, property taxes, utilities, and home repairs combined are less than what my friends pay in rent for much smaller houses
The only way you can call it an investment is either having a guarantee that you'll be able to sell it for higher than what you paid for, OR buying a place in order to rent it and getting between 5% and 7% return on that purchase, then yes it's an investment. Otherwise IT'S AN EXPENSE. Forget all the brainwashing they feed you with.
The most I've seen is like 1.5% on savings accounts. On other types of accounts I don't think I've seen more than 3% so idk where they're getting 7% from
saving account is different with a deposit account. the interest on a deposit account is better than saving account its like at least 4% interest but you can't do withdrawal until the time (usually 1year~3 year)
I was born in Albania and moved in Greece when I was 5, now 23 (will be tomorrow) I have moved in UK. Second time immigrant in my life already and I own my friend 1600£ so I could start my life. Those were some good advices. Thank you but I kinda already knew them. I'm just not good with economy.
I'm sorry but he's right. If you rent and put the difference in the stock market you will be a lot richer than otherwise. This is especially true for metro areas were down payments can be $200,000. There are of course situations were buying will be cheaper but for many Americans buying is not cheaper anymore. I do agree he did make a blunder using a bank account as an example but his main point still stands.
Batmangutten bro where the heck is a down payment 200k? Lol im in the mortgage industry. Interest rates are lower than they ever have been and so are down payments. The average down payment for a conventional loan is 5% of the purchase price and 3% for an FHA loan. My mortgage for 3 bedroom 2 bathroom home is $790/m. Quit trolling
Major metro areas like the Bay Area, New York City, London etc. That is assuming a 20% down payment. Even areas were homes are half the price (500K) it might not be worth it to buy. I know interest rates are that low but even than in many areas it could still be worth it to rent and invest the difference. I have lived outside major metro areas and than it is usually worth it to buy. For example we own a house in Norway and we rent out the bottom half for about $800 dollars a month. It isn't even that big of a house. Right now we're renting to a student who's going to college but when he gets a job it would be way better for him to buy a house there compared to renting. But even a 5%-10% down payment here in some metro areas can range between $50K-$100K and since housing here is already worth millions of dollars it seems less likely that it will continue to rise as fast as a percentage increase going forward.
That 3 bedroom 2 bathroom would go for $8K a month with a 20% down payment for 30 years were I live. Renting out a comparable apartment would be about $2.5K. Edit: I forgot to mention that you would have to pay $20K in property taxes on that house every year also. Anyways my point is that renting does make sense in certain situations and so does buying and that there isn't a clear and cut answer that applies to everyone.
it depends I own a BMW 7-series that was cheap at 4k but am looking at buying a limo for income growth as the hire rates are £50 an hour say 10 hours a week would gross £25,000 a year
4:42 WHOA! A savings account with 7% interest? That hasn't happened since the '80's. And a $100,000 home won't cost you $550 a month. You can double that figure. And people who rent, do it because they don't have $100,000 to put down on a home. Even the vast majority of people who buy don't have $100,000 sitting in the bank. Your numbers here are completely unrealistic. Your logic is even horrible. Renting is very rarely more financially more responsible than buying. Renting provides absolutely no long term benefits. At best, renting can only be said to be cheaper in the short term. Once you look at the finances over a 10 year period, buying is so much cheaper. And 18 years of a single kid will cost you $250,000? I think not. That's 1100 a month or $275 a week. The only real cost of a kid is the food they eat and clothes they wear. They share the things you would have anyway. You'd still have the same bills for electricity, gas, water, sewer, trash collection, and mortgage/rent if you didn't have a kid. The only real cost is food and clothing. The rest is elective. I can eat like a king on $275 a week.
This video is so weird, they talk like they're paying for groceries at california prices, but they have rent prices like they're renting a house in the middle of nowhere. Absolute nonsense. When has anyone rented a 100k dollar house for 550$ a month, I live in Indiana where housing is cheap AF and nobody here is renting for 550$ a month unless it's a 40k dollar home.
No, if you see raising kids as simply maintaining their existence then you'd be a horrible parent. you need to be able to pay for their phone, some form of education, a little bit of spoiling(just a bit, like some family time, eating out, theater, at least some thing for birthdays and maybe a vacation or 2) etc. Aside from that though, children these days have been very spoiled and sometimes getting more of what they want as opposed to what they need so when I say spoil them a little put emphasis on "a little". As for water, electric and gas prices, you aren't sharing bathing water, hand washing water, water heating, lights etc. So yeah you definitely will expect a price hike
Rent, mortgage, electric and practically everything else is impacted by having had kids. People buy and rent larger, more expensive places than they would without kids because they need the extra space and bedrooms. Same with electricity, water, etc. the kids use more of it. Long term, it is absolutely more expensive in almost every measurable way to have kids. I don’t doubt the $230,000 estimate is correct. Higher even.
don't know which part of the country you're talking about but buying early is the key to financial freedom at where i am. housing prices skyrocketing in the past past decade, tripling in value and rent is 1000/room (yes, just the room not a 1room apt). for anyone wanting to buy a home now, it is at least 1.2m+ for a 1000sq and tons of people bidding you out. where 4 years ago, one could get a house for under 1m or around the price.
If you wait until you are emotionally and financially ready for children you will no longer have the energy for them, and you will still not be emotionally or financially ready to have children.
Right. For the most part, unless you're a teenager, you're either ready or you're not . . . at least emotionally. Financially, you might never be ready, no matter how long you wait.
renting is better than owning? right, it depends on where you are I own I pay $450 a month mortgage for a 4 bedroom house with 2 lots yet a one bedroom apartment across the street is $950 a month all my bills in a 4 bedroom 2 story house is still less than a one bedroom apartment with hydro and water included my last apartment was $750 a month which was still less than all my bills
So at the end of buying,what's next??? Sell and rebuy?? 🤔After the end of living ,who will the home go to😐😐😕.. investing in a home for long purpose and then what...
Your comment about renting being cheaper than purchasing is wrong. Renting in the long term is definitely more expensive, when yu buy a house yu pay a lump sum/mortgage, a fixed amount whereas rent will continue forever.
MK Property taxes never go away and insurance too! We owned and rented, and then we had the market failed us and so did the bank. We were never late and they raised our mortgage and wouldn’t work with us. We lost it and they got insurance off of it and resold it for less than half A family put out of a house and they made a profit! Remember that the bank owns your home until it’s paid off!! And they have more power. It sucks, so I don’t mind renting, if something breaks, I don’t have to pay it. Plus, I have a screaming deal. $1000 a month in San Diego California for a 2bdrm house on a quarter of an acre with a great view. And our rent has never been raised in 5 yrs. so sometimes it does benefit.
We are all just renting. You can own a place until you don't pay the taxes or the local constabulary says your place is in the way of the new off ramp, or business park, etc... etc...
In my area of Oregon the cost of renting is so high it is actually cheaper to get a mortgage. You can rent a nice 3 bedroom 2 bath here for 2500+ a month, or buy one and pay 1800 a month in mortgage payments, rent out the other two rooms and drop your payment down to 600 a month. This allows you to easily pay 1000 more a month than your minimum payment on your mortgage and still be well below the cost of renting, with the added benefit of being able to be an adult and do home projects in the home you live in without asking for permission.
I grew up in a working class family at no point did I feel like I wish my family had more money. That is because even if we didn’t have the money we have a good family relation that kept everyone United. He lost me at that assumption as well.
Maybe he didn't mean to say that kids can ONLY be happy in a financially stable environment, but instead that it's MORE LIKELY that they'll be happy if you do raise them in a financially stable environment.
oscar trujillo if that's a fact then definitely not, though there could still be other factors to take in. I just think that a child raised in a middle-upper class family would have a greater quality of life overall to one who is born into extreme poverty. If everyone in the history of modern society agreed that money did absolutely nothing positive for raising their states of happiness and well being, there would be no reason to create a wealth hierarchy in the first place and we wouldn't even be having this argument right now.
First, you don't ask for a promotion. You ask what are goals that you should accomplish, in order to be considered for a promotion. You want your boss to think you are motivated, but not out for his or her job. Second, if you feel that you need to move a lot, then renting is cheaper. If you plan to live in the same house for 30 or 40 years, then buying is cheaper. Plus, you can hang all the pictures you want and paint the walls any color without the wrath of the landlord. And landlords are far slower at repairs and renovations than you are.
I don't know where you got the calculations on renting vs. buying, but even in the rural area I live in, $550.00 will only get you a trailer on a lot. Renting has become astronomical & at least in the southeast it is cheaper to buy when you can. Also, a good point you made was about saving. Even if you can only save $5 or $10 a pay period, you need to do so.Otherwise you're going to be looking at old age with nothing much besides Social Security to depend on. And we all know how solvent that is. I don't care how poor you are, it's possible to put a couple of dollars away. It adds up in time. Trust me, once you get used to doing it, you won't miss it, & when you get old you'll be glad to see that nice chunk of change. And trust me, regardless of what you may think, most of you will grow old.
I bought at 19 yrs old. At 29 I own my house. I am now 30. Well worth buying then renting.. Zero payment just have to worry about taxes at the end of the year plus I'm a handy man at that..
I love when financial advice on how to be good with money includes ridiculously expensive vacations and not saving that money or investing it. Take time off, ok, but going on vacations is never cheap and ALWAYS a waste of money(no matter how cheap or how good of a deal, that money can go to other things)
I'm going to chime in here and state that your assessment on owning vs. renting a home is overly simplistic, flawed, and short-sighted. It doesn't take into account markets where mortgage rates are low, rent is high, and assumes a good rate on return in a savings account (mine delivers nowhere near 7%). It also fails to consider the fact that a home is a hedge against inflation. With inflation, your rent will go up, but with a home, your mortgage rates can be fixed and manageable. If mortgage rates were to spike, you can simply re-amortize to keep your payments the same or maybe even make them lower. Re-amortization means it will take longer to pay off your home, but the day will come when it's paid off, and that makes home ownership part of a good strong retirement strategy. With a paid off home, a retiree can cash in their home, downsize into a less expensive market, and free up all that equity, whereas a renter is still going to pay their rent every month. As for the maintenance expense, it's never as much as it's made out to be, especially for a handyperson.
It depends on the area. We bought our house for $14K in 1976, it's probably worth about $50K now. We paid it off in the 1990's so all it costs is property tax, insurance, and maintenance.
Also like to point out the fact that you can rent out room of your house. I have my upstairs rented and one of my spare bedrooms. Not too hard to pay off a 30K loan in 3 years if your getting 7,200 a year.
Yeah, it seems to me like the rent vs buy question depends a lot on the situation. Realistically, unless you need or want short-term flexibility, most people would rather buy, for the autonomy if nothing else. So the real question is whether it's a good time and place to buy, not whether you should rent or buy.
$7200 per year is $21,600 in three years - how does that pay off a 30K loan?? Or are you saying that you are also paying it off from your employment income?
Actually, if you rent, you do pay for cost of maintenance, tax and your share of the mortgage. Yes, they are not itemized, but in determining a tenant's rent, the homeowner will take into account the mortgage and the tax that he has to pay. Landlords will never rent out their property at a loss, they will factor in incidentals in determining your rent, plus of course their rental income on top of it. Generally speaking, it is a good rule of thumb to buy your house, provided that itnis within your price range and you do not over exert yourself. It only becomes a problem if you commit to buy a house that you can't afford.
I'm sorry I have to disagree with number 12. I live in yakima washington and around here renting a house will run you anywhere from 8 to 1400$ and when something goes wrong the landlord takes days if not weeks to fix it. So you end up fixing it yourself and if you want your money back he don't have to give it back (pos landlord) you have to sue him in small claims court which cost money and time that honestly isn't worth it. So just remember EVERY SITUATION IS DIFFERENT!
EDWIN JOHNES KJ from INDIA Sir I do have some points to add ........ 1.Rather that spending too much on necessity items, go for their cheap but good quality alternatives . For e.g. watches - Not everybody will need a Rolex or a Victorinox , instead you can go for a Casio which is way much cheaper and also you don't have to compromise on quality. 2. There are Brands which give better value for money that just awesome logos . they can also be cost - effective for a better quality. 3.Always keep a track on yours' expenses (as well as your partner's expenses of you are living together) And also be a conscious payer...Because IT'S YOUR MONEY..........DON'T WASTE IT.
Also I rent for $950/ month. If i bought a house for 100,000 and paid $550 mortgage then id have no mortgage in like 15 years whereas I'd have paid 180,000 in rent by that point and would have to continue paying forever an amount that would increase based on inflation. Also what fricken bank offers a rate of 7% interest? Is this the 60's? Lol
A diversified stocks portfolio or the S&P 500 index fund yield at least a 10%. (up to 35%) annually. So if you had invested that $100k in the stock market you would have $417k by 15 years. Take $180k out for rent and still have $237k which is more than double your money in 15 years. Also real estate have never appreciated in price as much as recently because of the low interest rate, so dont bank on having similar returns in the future.
I agree. My daughter lives in the Phoenix area. She pays $1000 a month rent with her roommate paying $1000 as well. I asked her why she couldn't get anything cheaper. She said you can get a place under $1000 if you live in the slum in downtown Phoenix, where the drug dealers hang out, and the prostitutes are prevalent. Crime is high. I told her she needs to stay away from there.
ZoHBo we have done this. Buy a new credit card to pay for older one. (For first one year there is no interest on credit card in india for the bank at which my dad had account) and it did save a lot of money. My dad is awesome.
ZoHBo work and pay that 20% card down and you will not run it back up. Pay it off with a low interest loan you most likely will run the card back up an still have the loan. Pay off your debt an live below your income. If you must use an high interest loan pay it off in under 1 month then you pay no interest.
Buying a home vs renting:My parents spent about $70,000 for a plot of land, 10 years later spent about $365,000 building a house on it. In 2010 even in the midst of the housing bubble and in perhaps the worst market for a seller they sold it at a huge loss (2 years prior the house appraised at $775,000) for $525,000. So even in a horrendous market they still made $90,000 living there for 5 years. I pay $840 in rent and in that same 5 year period that will add up to $50,400. So I can either buy a home that will appreciate in value, have equity in that home, or throw money away on rent that I never get back when I move out. Hmmm....
Here's an error in this video: 7% interest rate on a savings account in a bank? This isn't the 1980s. The Federal Reserve's interest rates are way too low to expect a 7% APY return rate on a savings account or CD. Credit Union CDs in 2018 tend to be between 2% and 3%. This difference could affect one's decision to rent or own. Actually, owning (*after* the mortgage is paid off) could be cheaper than renting. I know it is where I live. Also, if you rent, yes, you do pay taxes on the property. It's just that it's baked into the renting cost itself.
why does everybody think interest rates come only from the bank account? ok so you should look into funds that track stocks, they make well over 7%, mutual funds and ETFs are already diversified
If you get financial problems and you can't pay (for example lost job). Situation 1 (mortgage) - You sell the house and from the money, you received you pay off rest of the mortgage and for some time your new rent. The time you need to find a new job. Situation 2 (rent) - Rent is due. The landlord wants his money. You don't have them. So he kicks you out. Now you're jobless AND homeless. I'd choose 1st any time.
Gohan ssb3 , here in the area of New York I am in. One section average is over $800 move away an hour or so and it may average $500 further away and it goes down. I live well over 600 miles from New York City
This is how anecdotal evidence is a problem Many people don't buy and rent in the same area. If you try to buy a three bedroom house in Manhattan for example--lol. However, If you Rent a three Bedroom apartment in Manhattan, it's going to be crazy amounts of money per month. So if you were renting a 3 bedroom in manhattan, and you decide to buy a house instead, you aren't going to be buying a house in manhattan. Instead, you May buy the house from the surrounding counties. Well property prices would be cheaper their and so would the mortgages. So then you would go on the internet and say "Well, I was renting, and when I bought a house, my monthly payments plummeted. You will forget to say that the apartment was in NYC and the house was Dutchess County New York.
Also, I'll go ahead and point out that Rent around Dutchess and Orange County New York for a 2 bedroom can go for 1500+ a month and 3 bedroom houses can be 500 k dollars.
I don't know where you live but around here a $100,000 house rents for about $1200.00 a mortgage for the same house is around $600 depending on how much of a down payment. banks are currently paying about 2%
I used to be a banker for 2 banks since 2015. I’ve never ever seen them give more than 0.001% on a regular saving account. If you were referring to the stock market or other investments I’d agree. The banks make way more off you.... You practically make nothing off them
dep's, did you miss the part where he said "work and save up for college"? I'll bet you still haven't paid your loans back, you should ask for a refund. Before you go all nuts, in state tuition in MO is about 5k per semester for 15 hours. Add in a grand for books, and that is 12k per year. That is very doable for anybody who wants to do it. He/she can live at home and work part time. That doesn't cover it all, so mom/dad will have to kick in a few grand, but there is something very noble about paying your way through school and being your own person. Also, even places like McDonalds have tuition assistance, as do lots of employers. Loans and deep debt is not the only way to get that sheep skin...imagine that!
jamie t uh buddy i can retire at 25, and "mom and dad may have to throw in a few grand" is not paying your way through college. There is nothing noble about any of it. Its just a choice. Instead of being a child and assuming you know everything about ppl online, you get back to studying. Good day.
dsp's Former Lawyer I think ur missing the bigger picture. Many people won’t mind throwing in a couple grand to put their child threw college but if they expect the whole thing paid off is just being entitled. There’s plenty of ways to pay for college whether it’s through scholarships or avoiding ur student debts.
Nice video I liked all the suggestions. I'm 28 living in socal and rent. I can't imagine owning a house now. My rent is $1025 tho. I'm debt free, have a job to pay bills. Currently trying to find a way for passive income.
In the south you can buy a nice house for 120,000. And rent for a 2 bedroom apartment can cost as low as $450 or $600 with everything included including cable.
4 lightbulbs at 35 seconds in. :) So, over $1,000 per month per kid? Cool, that's what is can cost for an adult to live, including transportation, food, utilities, insurance, rent/house payment, etc. Must be an expensive kid. Or the parents just waste the money. For low income people, they get tax benefits, earned income credit, etc. and it doesn't cost much. And paying for college? I don't know even one person from my family, or any of my friends' families that paid anything for their kids' college. Just grants and student loans. It also costs MUCH less to buy a house than to rent. Where did you get the rent price? Buying a 2 bedroom house in my city would cost $400 to $450 per month. Renting the same home in the same city and area costs $900 per month. And 7% interest? In your dreams. Bank of America and Chase are at .01%, Capital One is at .75% Less than one percent interest. Please check actual rates and current information next time. You could easily go on bank websites to find current rates. Or for real estate, go on zillow and check prices vs renting in the same place.
4:04 Surprising, right?
Depends, my folks bought a 700 sqft house in 1998 for !5K, it was worth $85K by 2015, thats a 567% increase in less than twenty years. Renting would have had lower cost, but is all expense, where as buying is investing. However, I do believe people should by well below their means to pay as little interest as possible. If possible, live in a garage for 5-7 years, save like crazy, and buy the house CASH. The problem is, most people would rather not sacrifice for a short while, to enjoy a GOOD long while later.
BRIGHT SIDE Great advice, Enjoyed the video.
There are added cost associated with renting too - the building will be insured but you usually have to take out 'contents' insurance for your own stuff. Bills are often extra and then there's moving costs.
Best scenario is to buy your house then sub-let a room to someone else so they help you pay off the mortgage ;-)
Idk where you got $550 from to rent a $100,000 house. Maybe its just that I live in CT but my ex had an absolute garbage studio apartment in a horrible neighborhood and that was $500. I've NEVER seen anything even that close to low on any house whatsoever. Poor information
Where? 404 not found
dont lend money to a friend.. youll both lose them.. the money and your friend
Lol, that's very careful and wise advice. In rare cases, like mine...it turned out pretty good for me. I wasn't even the lender, I was the borrower. I borrowed an amount, it helped me alot. And I paid it back diligently, and with interest that wasn't even requested. I just wanted the transaction to be a win win situation for both of us. The interest the person made in the particular time span, would not have been able to be made anywhere else. So The loan to me was actually an investment from them. And the loan was used to generate more income on my End. But this is rare case as most of the time it turns out badly as u correctly advised.
@@lolliz100 you're an exception. Most of times occur what ryan said above
nice i was wating fro this
I don’t borrow money usually but when I do, I make sure the lender is satisfy. But now I lend my friend some money and find it difficult to get it back
Very true..and if the friend purposely lags the payment..u will defntly lose both
for those who dont want to watch the video but want the points
14-kids are expensive
13-dont be afraid to ask for a promotion
12- cheaper to rent than buy
11-invest in health and education
10-dont invest in the unknown
9-dont borrow to pay debt
8-meet new people and friends
7-better to buy good quality clothes
6-avoid impulsive purchases
5-start saving now
4-eat and cook at home
3-put salary into rainy day account
2-communicate finances to partner
1-find passive income
Caleb Brown thank you!
Caleb Brown 👍🏾
Thanks
Caleb Brown thanks bro
Bless you.
please tell me where i can get a savings account at 7 percent interest?
Ehart💖34 MOTO💀TRiPP India
Right? The highest I can get for a tax free account is 3 lol
Ehart💖34 MOTO💀TRiPP i know right! Over one year with a million dollars most will get 1k dollars!
You can get one....on the moon!🤓
Ehart💖34 MOTO💀TRiPP 12-17 percent in egypt
My son was paying $1500 a month rent for a one bedroom apartment. So after years of paying a landlord, he recently bought a condo for $1700 a month, but he gets equity and ownership.
And he gets property taxes, which deductiblity is now in limited to $10K, plus homeowner fees, and a liability on his balance sheet. Don't fall into the idea that property always appreciates. It doesn't! I know all too well as I live in California and I'm in my 60's.
Where is this? Definitely not NYC.
Lies ...
@@alexp3752 property taxes are already figured into rent. If you pay rent, You're still paying property taxes
14 facts you should know by the age of 30
14: Children are expensive
13: It’s not embarrassing to ask for a promotion
12: It’s more profitable to rent than own
11: Invest in your health and education
10: Don’t invest in something you don’t know well
09: Font borrow to pay old debts
08: Stay connected with your friends and meet new people
07: It’s more efficient to buy good quality shoes and clothes
06: Avoid impulse purchases
05: Start saving money for old age now
04: Eat and cook at home
03: Put part of your salary into a savings account for a rainy day
02: Be on the same page with your significant other when it comes to finances
01: Find a passive source of income
Did this help you?
It’s me Wania it did thanks
Lol thanks i was just about to come off of this video!
cheers! right on time. saved me ten mins. ez. (:
It’s me Wania z
Thank you for this. The world needs people like you!
Your calculations on renting versus owning a home are way off and inaccurate. Depending on where you live, rental prices are sky high. In Michigan, for instance, mortgage rates are very low and small apartments or homes, in desirable ares, are much higher and prices continue to climb. I don't know where a family can find a place for $500 per month. Renting only makes the landlord rich.
detphemale I was just about to write the same comment.
Over here in Oregon, it’s the same.
In the desirable areas renting can be between $1,300-$2,500. The average mortgage payment for a house in these same desirable areas with a fixed rate is closer to the exact same amount or even less based off of refinancing rates.
At least with a mortgage it goes into home ownership. With rent, it doesn’t go back to you. 👍🏻
Even though rent and mortgage is the same, buying a $400,000 home for 30 years turns out to be around $650,000 after interest. This is not including all the maintenance and appliance or repair work within the 30 years that is otherwise covered by the home owner if you rent. That should easily bring it to around $700,000. If you invest $100,000 into something with 7% return you get $7000 back yearly which is around $600/month you can subtract from rent. In this case, renting is definitely a better financial decision but the exception is if the house is in an area where property value is booming.
Renting in Portland Oregon and leaving the area because I cannot afford to rent the housing anymore! :( my Land Lords are enjoying their wealthy lives though.
The problem with renting is that the rent keeps going up and you have no control over it. However you can raise your mortgage payments, paying off the mortgage early and saving you money. When I bought our 1st house the mortgage was 668 including taxes a month compared to only 465 for the garbage dump we were renting. Five years latter I had raised our mortgage to 740 a month, compared to the rent at the dump which had risen to 800 a month. When we sold after 6 years, the value of the house had gone up 40,000.
Also our second home was paid off in 14 years, leaving us mortgage free and with money to renovate as we want. The people who did not buy are still paying rent, with even for matchbox size places cost about a 700 more than we pay in taxes.
Renting (a room) is a good short term strategy. For the long-term it is better to build equity. When your young you want to be flexible. When your older you want to be stable.
True
The most precious luxury that renting gives you : flexibility to move wherever there are opportunities !
Money paid on rent is an expense, money paid towards your mortgage is an investment. The former doesn't result in anything after 20 years while the latter leaves you with a property that you fully own.
HB L ...if within those 20 years the housing bubble don't burst and you get forced into foreclosure and lose all your investment. Factors which you have no control over
That depends when you purchased your home. I purchased mine in 2009 after the bubble for 159k versus the last guy before the company that bought it to flip it for 330k. Even if another bubble were to take place, that just means we are going to buy another home for cheap and rent the current home we live in.
Jean Gorrin It doesn't matter how much the house costs. You're putting yourself into debt for a very long time to get inside a market that bursts so regularly. Even if it mattered, this video is in refference to the average joe that don't have stacks of disposible income/savings anyway. Meaning that housing prices after bubble bursts will most likely still be relatively expensive at that particular time since their income will most likely also be hit by the burst.
EDIT: Grammar
If you look at it with that logic then anything you purchase through a loan is going to put you in debt. It is how you invest that home and your lifestyle that differs. If you live by your means (which most do not) then again buying a home when it is cheap after a bubble (which we did) can benefit. The only way it does not benefit me is if I tried to sell it. But if I rent the home out (there is risk but you can do the vetting before you just trust anyone) then you can continue to collect on the home since you can rent out for more then you pay on mortgage. Most people in South Florida prefer to rent then buy, so it is to me and the wife another source of income. That is my point.
HB L minus property taxes
Owning a home shouldn't be thought of as 'spending' money, it's an investment that typically appreciates in value. The costs are really financing the debt, the rest is just being put into equity. Renting should be not be a long term solution.
ImKibitz the total cost of ownership of a house is much higher than just the interest payments. You really do end up spending a lot more on a house than you do renting.
The benefit is that it's yours to do what you want with, and houses are usually a lot nicer to live in than apartments.
In the short term of course costs are higher buying, in the long term it's SIGNIFICANTLY better to buy though. For example, once you pay off your loan you have a hundreds of thousand in home equity whereas if you rent your entire life you're still in the same spot you started.
The short term costs you pay (down payment + home maintenance) are negligible for the long term value of owning property and renting for the long term is one of the worst financial decisions anyone could possibly make.
ImKibitz if you rent, you can invest the difference, and that will more than make up for any kind of equity that you have in your home (plus it is much more liquid).
suriname you also can buy apartments. Way less maintenance
Owning a home really isn't an investment. It is an appreciating asset but not truly an investment. A second house is an investment.
Another tip avoid Starbucks and brew at home with bagged or canned coffee!
Mark Szostak tastes better THAT way as well
Mark Szostak how about no coffee at all? So many reasons ;)
I can't drinking Starbucks!!! It tastes to good. Try Java or chocolate chip frapp. I like to add mint syrup and no whip. BTW Java has coffee in it but chocolate does not but other than that they taste the same.
How about no eating out period? There is absolutely NOTHING that you can't find out how to make online. No reason at all to ever go out.
@@lianeli5406 instant coffee pays for itself though, doubtful I would've pushed through even college without caffeine xD
A) If renting was better than owning, then why would a landlord buy a house to rent it out to you in the first place? If renting is better for person X then owning, it must mean that the renter is receiving more value than they are paying for. If that's true, it means all landlords are receiving less money than the value of the service they provided you. Why would anyone do that?
B) Simply because the landlord 'pays' for maintenance doesn't mean the renter gets it free. Maintenance costs are part of the rent you pay. You, the renter, pay the maintenance costs every month with your rent check.
C) Depreciation of homes happens much faster with rentals then owner-occupied, i.e., homes get 'used up' faster. This means the rent has to be higher to compensate the landlord for the higher levels of depreciation relative to any appreciation of the home's price.
D) Even though the landlord 'writes' the check for property taxes doesn't mean the renter doesn't pay them. Property taxes get capitalized into the rent just like maintenance costs. The precise term is called 'tax incidence analysis' and the level of tax shifting depends upon the elasticities of supply and demand relative to each other.
E) If you are going to be moving a lot, then yes, renting probably makes more sense since selling a home has high fixed costs. But there are many different factors at play. You have to weigh these factors yourself.
If you already have lots of money its ok to buy but if you are taking loan to buy it may cost you more and home is not counted in asset as its your house you stay in it, you can invest that money in some better place
That makes sense if the landlord actually owns the place but if hes also payin mortgage then theres not much gain. So if you can pay off a house and rent it then it could be a good investment. But for regular people thats not possible especially if u live in cities like NYC
@@virendrasingh-xw2vz
Jj
@@bbygrlpt2 that's why its smart to buy multifamily homes...if you have 2 or 3 families paying rent every month mortagage is handled and then some. The issue people have with buying is they wanna buy their dream home or a starter home or fixer upper just for them. If you can have other tenants paying your Moraga off most likely you can raise the payments and pay off the house more quickly. Of course this all depends on other factors but it still makes more sense than buying single family and then renting it out because then yeah...the landlord isn't really profiting off of that.
virendra singh if you decide not to own you’ll have to rent anyway, which increases 2-5% percent anually. Whereas if you own you pay a fixed amount every month and you build equity. While giving half of your money to a bank in debt is bad, It is worse to give it all to a landlord.
My parents were 32/34 when they had me. I thank them every day subconsciously because they were stable and knew how to be parents because they were officially not kids anymore. 24 year olds having kids are still kids themselves.
Ashton--When my parents were born in the 1930s, it was not unusual for a girl to get married at age 16.........not even fully developed physically! My how times have changed.
Love that comment. Kids having kids is no laughing matter. And if you do have kids young i would hope they are secure in all matters of proper development in someone. People nowadays are ok with having kids with someone you are not married to or even with at all. Thats crazy to me. Phornication for contraception. Thats animalistic not progressive.
Ashton Colby i had my first kid at 23... already had a house, 100k car (not parents money, and no college degee) and a wife. 2nd kids at 25 and and a rental house. Some of of us think ahead. I wanted kids young, so i could still have a life when they move out and I'm only 45-50
Only in the 21st century are 24 year olds considered kids.
Aren't average lifespans significantly higher today than in the last 100+ years?
If you're only living to 50, and have kids at 25, you're kids miss out on parents and grandparents for most of their lives.
Ashton Colby I agree cause I'm 24 and I still dont feel prepared for the world i feel like a super baby adult.
Where is real estate getting cheaper? Where is this savings account with 7% interest?
Yeah .7% is more like it 😁
Maybe in some countries real estate is getting cheaper. But in most other countries, real estate keeps on getting more expensive by the year, where millenials are having a hard time to just have their own place to live, since the increase in their pay rate is not as high as the rate of inflation and the increase in the real estate value. Bright Side's case, as mentioned above, maybe true in the US or some other western countries. But in most eastern developing countries, my case happens all the time.
A savings account is not a "fund." If you know, then name one.
There's Indonesian State Company offering 7% return annualy. Anyone interested?
Linarto Wijaya yeah right, .... Lol im in if u are.
Buying a home is one of the best investments you can make
say you pay rent for 20 years on a property, guess what, after you leave that property, you don't own a single piece of it
but if you pay mortgage for 20 years, you are slowly but surely gaining piece by piece of that property,
and buying a house doesn't tie you down,
if you can get a loan on the house, and decide after several years you want to sell the house, you can probably make extra cash because price of property almost always goes high
Buying a home for others to rent from you so that the mortgage gets paid and eventually becomes liquid profit that can be sold or occupied anytime as well as offers tax benefits, you (rent) so you dont pay property tax insurance maintainence etc. And you live in a home you purchase whenever you feel that is the option for the wealthy. Just smarter way to go. As long as you are patient and bide your time everyone wants that instant gratification. But takes money to make money is rule #1 and #2 it takes time to make money. And #3 Risk alot of risk.. its risky to own a home you dont live in that you rent to ppl but much more risky to own your own home after 30 years spent in it, expecting the same R.O.I. you put into it. Mind you, you could make the ROI you want but why wait 30 years someone is always looking for somewhere to live. As property value goes up you charge more for someone to rent from you mortgage pays for itself. Eventually profit. But its dumb to buy a house for single family to begin with, you buy MDU (multi dueling unit) 4plex@ 1000 in rent/ea. Is nearly 50k. And its treated as one mortgage. Riddle me that. If you think its a bad idea to rent in a home and pay someone else more than you could be making off of others. Its like putting money into a simple savings account and expecting real compound intrest.
Im more of a lavish person who never thinks before spending.. if i go out to buy a top even on tight budget..i end up buying 3. This video was very helpful for me for showing the money movement in hands of experienced people teaches lesson for younsters.. thankyou.. i will nowonwards follow these rules and check how much my life will change..😊😊😊
Where are you getting 7% interest on cash?
Also, you're assuming that someone renting has they $100,000 in their bank to start with. They don't - that's why we get mortgages!
Lewis Skinner Get a BB&T account
The Missing Variable That's still assuming that renters' have $100k
Anyway, I've no idea what that account is. I'm from Britain - best savings rate here is 5% on cash, and that has a maximum amount you can save monthly (usually £200-250).
Lewis Skinner India 9% on FD
My bank gives me 0.03 % of interest. I guess the difference is to where you keep the money.
TH-cam money!. I’m from New Zealand and you would be lucky to get 2 percent on a savings account since mortgage rates are so low here because of how expensive houses prices are.
Wanted to add my opinion on #7 buy good quality clothing and shoes. While I agree, a lot of people might think that is mainstream good quality brands. Say Armani or Gucci, but reality is these brands WAAAAY overcharge. You want good quality at a reasonable high price, and often mainstream brands will not be as good as truly good quality unknown brands.
Although it is more work, learn the basics of how to spot good quality clothing rather than blindly trusting name brands and high price tags. That will be all...lol
just for eg...u can get good quality shoes within 3000rs...there is no need to go above this range just for brand...
Walmart shirts works just fine. Buy a couple of nice shirts, then use the cheap ones as lounging/work out clothes/house work clothes.
So true KEN... You don't want to buy a label, per se!! But, as I get older I SEE that I need GOOD QUALITY shoes!! The cheap ones, not only fall apart way too quickly, but don't properly support your feet, causing not only pain, but allowing a decline in the health and strength of your feet!!
I'm not sure of the conversion to/from rupees... but I contend that good shoes cost $60-100 USD. My last shoe purchase, I got Skechers... NOT BECAUSE of the name, but I picked them up, they had a little weight to them, they weren't completely inflexible, but they didn't fold right over on themselves like some of the other shoes (including expensive NAME brands). AND they were totally COMFORTABLE, felt like they were hugging my (relatively flat) feet!! I got one (pr.) athletic shoe, and one (pr.) Oxford... each around $60.
2:24, 4:05, 4:59, 11:03. Great list. Keeps you on track for what you should be thinking of in terms of personal finance. It’s definitely not exhaustive but it hits the basics pretty well
I had a hard time trying to find the light bulb in 4:05. I had spotted all the others.
Name one bank that has a savings account with a 7% interest rate... Where does this channel get their information from? They need to start citing their sources otherwise they lose all credibility.
Jeff Thomas I need that bank name myself
Considering the video date, Feb18, you would be lucky to find any savings interest rate over 2%.
In India we get an intrest rate of 6.5% but considering how our money is devalued it doesnt make any difference
7% bank interest??? $550 for renting a home??? Yeah ok! Stop spreading fake news and false information. If anyone believes this they are just as bad as this video.
Please come to Indonesia 😅
I’m literally a slap in the face of this video. 21, married, 1 year old boy, Web Developer at a respected company, didn’t go university, renting with a little cushion of money left over after bills and in a position to own my own home within the next year or two...
Having children late is a terrible idea.
Friends betray and diss you once jealousy arrives, renting is only cheaper for those that are unstable and cannot settle with a good plan for their lives, high quality clothing???...but every type of material no matter how expensive.. shrinks and rips!!!... If so, R u really going to wear the same outfit for 30 years?
A two-story house for $100,000?? I need to move to wherever the Bright Side producers live.
Wow, nice! That would buy you half a condo in Davis, California.
Oops, no. Just looked it up. One third of a condo.
You can't even buy half a car spot in the middle of Sydney CBD
This would probably be el Paso Texas or just Texas in general
It's $600,000-$1,000,000 for a two story house here in California
What kind of place lets you rent a house for $500 a month My apartment alone costs $2000 a month
Do you live in Singapore?
Julius no in California
Same in Sydney
Well i guess that makes much more sense now but it's still an enormous price imo.
Oklahoma. Very cheap rent.
Exactly after he said "cooking at home is much cheaper", an add for ordering food interrupts the video 😭😂😂
Rent is NOT cheaper than buying! No where in the Country can you rent a $100,000 home for $550/month. It would be around $750-900/month maybe more depending on location.
Chad Crawford which country? How about a spoiler alert that this video only relates to the USA ...? :-p
i'm in the usa i would love for you to show me a house thats 100,000 plus where i can only put down 550 per month
I live in Tennessee which is one of the more poverty stricken States as far as pay wage. You can't even rent a 1 or 2 bedroom apt for less than $550/month.
Kevin A.... exactly
Chad Crawford
Like you said, depends on where you live. Los Angeles, San Francisco, New York City are some of the places I can think of that would be more expensive to rent rather than buy.
If you buy ..it going to eventually be yours
Renting all you doing is putting money in someone else's pocket
Well that aint true. Renting is not putting money in someone else's pocket. It's renting a space for a temporary living. Buying is better if you stay at the house for at least 12 years. And renting could be profitable only if you save your "spare" money for investments, but most people arent assiduous in money except if they have a mortgage to pay!
head hamer i doubt it, if you go to live somewhere else yo can rent the house that you're paying and pay the monthly mortgage with thst, its an investment.
Investing in real estate gives you many opportunities like building equity, rental income, and ownership. I would recommend on staying away from renting unless you constantly move.
not only that but what if the property owner doesn't want to renew your contract or raises the rent or something else.
zachparade if you own one house you can rent out a room and have someone else pay your mortgage or at least part of it. better yet have two houses paid off amd everytime that comes in once you deduct property taxes is profit.
Cooking at home may be cheaper if you're cooking for more than 1 person, but if you're a busy bachelor, especially one living in Sicily where food is cheap and good quality, eating out actually saves time, energy and money.
This probably applies purely to Americans. Decent food here is expensive, more so if you eat out. Be ready to spend half your grocery bill on a single meal here.
I would rather spend money than time. Let the chef cook, and let me do what I excel at.
Only if good quality means healthy.
Correct
flaze3 same in China. Dinning out is definitely cheaper than cooking.
Bright side: Kids are very expensive
Me: *hits the like button*😩
I'm buying a house bc rent just keeps going up for something that's not an investment. I need my own place rather than pay someone else's mortgage
I live in subsidized housing. My rent is $0 because I have no income. And when I do have an income, my total rent will only be 25% of what I make in a month.
Kids are costly ........if u say these words in INDIA ..............u will get slapped by elders 😂😂😂😂😂😂😂😂😂
swap kam no Iu would get set on fire
I am an Indian...this video is abt how to be financially successful...not what Indians think.
Why
candyfloss184 thats why its not in the video its in the comments section.
Weird that Chinese and Indians are cheapskates but like to raise so many kids. Talk about irony.
When you’re paying around 400 each week for rent, long term, buying is cheaper
a friend of mine living in England went from paying 1200$ a month for rent to paying 1500$ a month for mortgage on a house they will own in 10-15years with his girlfriend, they both work so i guess buying will indeed end up cheaper once they own the bloody thing
My husband and I are soon buying a house. We pay 500 euros in rent at the moment. When we get a mortgage, it'll be the same (give or tak a few euros) and we'll own the house in 20 years. We'll be in our early 50s when we own it outright
John Doumba Property taxes and maintenance will eat you alive..
Where I live, many of those rules don't work either. This is definitely for US and maybe for some regions only. It is for living, clothes, saving accounts etc.
Note that buying does not come with insurense and will set you stuck in the same house
Kids are indeed expensive. If you still want kids in the future though consider sustainable living. I was checking out some videos on the topic and one particular one stuck with me. It featured a married woman with her kids talking about her family saves. The make their own almond milk, use cloth diapers (I know it sounds yucky having to clean them but they do save money on dipers), buy used good condition clothes (showing off name brand isn't everything), and many other things that ultimately save them money.
I have such mixed feelings about this video. I don’t think I’d ever send a friend here if they need 100% clear and accurate advice
Hair Jordan that’s like me with this entire channel to be fair
Duh! 😅
Lord lol
I’m just now realizing this myself.
I cut the video off when it was talking about a "bank account" paying 7% interest on a measly $6K deposit. I don't think this person has any clue what reality is like anymore.
Hmm, I have 4 kids and they don't cost anywhere near $1000 a month (combined, even), and if you believe that renting is cheaper than buying you are high. I pay half as much for my mortgage as I did for a rental, and I am building equity. Haha, 7% at a bank. This whole video is terrible.
My kid is around 200 a month since I’m still buying diapers and formula. I dont Know where they get thousands of dollars from 🤣🤣🤣 lol
It's not just how much you pay for rent vs mortgage. It's property taxes, costs for repairs and upkeep, etc. Factor all of that in and it's definitely cheaper to rent.
Negative. I bought a house in... 2010? 2011? I dunno, I forget now. I made 100k on it when I moved in 2016. Repairs were minimal. Even if you don't make that much, the truth is that you are essentially paying yourself through equity. Rent is tossed in the trash. So not only did I pay LESS than if I had rented (I live in AZ where buying is typically cheaper than renting), I got the money back and then some. Renting is fine if you plan to move every two years, but holding property for an extended time is usually a winning option. Even if the market tanks, eventually it will come around, much like stocks. Right now people are freaking out when there is a dip, but I am looking out at least 20 years. If my property gains value, it will tend (I am not saying there is ZERO risk) to outpace my mortgage with the 3.25% APR. Property taxes are property taxes, but I think I am paying maybe 1500 a year so not a ton when looking at the big picture.
In other words, it is not DEFINITELY cheaper to rent. Even when it is cheaper, equity is a real thing, and is a real consideration.
That depends on the metro area you live in. For a lot of people it isn't worth it and for some it is. For example, if I were to buy a home the down payment itself would be $200K and the monthly mortgage would be $4K for 30 years. If I instead put that money in the stock market and invested the difference in monthly payments ($2K) I would come ahead in about 10 years time. There are of course situations like yours were it is cheaper to buy. But for a lot of people it's also the other way around.
Hmm, I guess I had never met a person who would rent if they could also afford a million dollar home LOL. It is a valid point, nonetheless.
If you buy, you can sell it later for a bigger price....if u rent u can keep paying ur rents.
Brother u can invest that money at some other place like stock market..
The money he will get from the bought house after selling it?
But buddy.. don't u think buying a house requires a huge investment.
Peter Piper it really just depends. There's no "one size fits all" approach to investing.
Peter Piper picked a peck of pickled peppers.A peck of pickled peppers Peter Piper picked.If Peter Piper picked a peck of pickled peppers,Where's the peck of pickled peppers Peter Piper picked?
Agreed, it all depends on where you want to live, or retire. I got my house over in Kansas for 70,000. The same property in Colorado along the front range goes for between 200 and 300,000. I will be out of debt by the time I retire. And I will own my house.
Best advice: Be single.
Not necessarily, marrying a person reduces taxes, and you have a combined income
I am married but these problems don't apply to me. I live in my parent's house lol. My parents like grandchildren though,and they don't want to be alone.
@@theoverlordus502 no it doesn't marriage license and birth certificates are ways that the government gets into our pockets. When marriage was created by the Most High, he never stated anything in the Bible about a marriage license. We have been bamboozled in this country. That's why most of us are one paycheck away from being homeless while the top 1% are taking vacations around the world carefree.
It's not good for man to be alone, but if you must you must. There's more women on the planet than men so...... if one does not fit, try try again. I love being married better than winning the lottery. A man that findeth a wife, finds a good thing. You can find that in Psalm. The law and the prophets ring true.
@@swacfan2791 we are not meant to be alone
My friend, I appreciate the time you spend to inform us financially. As of last week Wednesday, i count on $2,000, what do you suggest i should invest in?
I like Bright Side but this video is way off target. I have made over 300,000 on my house in the last 15 years. I'm in my 50's, retired with no mortgage. Rent is forever but a mortgage can easily be paid in 15 years. Always own, never rent a house!
Teach me
Congrats on your earnings! It's all about perspective though, maybe you could've made $400,000 if you put that money in stocks. Who really knows? Yes, rent is forever, but so is property tax, HOA, and property insurance. Not saying that renting is better, but everyone should always keep an open mind!
London may well be the one place where renting is actually cheaper than ownership - It's certainly not the norm as of right now though.
Never buy a house unless you have children. Children need a home to grow up whole, sole adults only need a place to sleep and take a bath.
@@alexp3752 Doesn't matter if you have kids or not. Whilst renting, you may as well be throwing that money away. A mortgage in many cases is far cheaper than renting, plus you own a house at the end of it.
Renting can cost more and you're left with nothing at the end of the rental period.
Our kids have all left home and have their own lives now. We own our house now. Do you think we'd be better off renting?!?
There are very few circumstances where renting makes sense. Especially long term.
How old are you out of interest? When I was younger, I had a similar mindset about a house/apartment was just a place to sleep, eat etc. Now I look at my house as not only a sound financial decision, but also a somewhere that I love to spend time and relax. Our house is retreat from the day to day madness that is the modern world.
Rent here in VA starts at 450 and up so it depends on where you are. Plus you are responsible for any and all breakdown setbacks or damages to the house when you own a home. After seeing the struggles my family members have with paying for fixing things around their house I’m not running in to home ownership
Just live below your means and save the rest. Best and easiest way to always have extra money.
I just took a screen shot of your comment.. I’m gonna hang this quote on my refrigerator.. 😁
That's really easy when you're able to work. Many people, like me, become disabled way before they even hit 30. I was in a car accident when I was 21 (I wasn't even driving!) and I tried returning to work several times-much to my severe pain and an angry boss. Disability's SSI pays something way below the poverty level and it's impossible to live on without assistance.
It's super easy if you have a halfway decent job, or even minimum wage and a brain, to live decently. What do you to save money to spend for necessities like health care bills that aren't covered when all of your money goes to rent, electric, and food?
+Burt Gummer It's not always about "discipline"
Mandi, there are many ways to earn a decent living working from home or even part time, starting a TH-cam channel about your disability and how to over come it, for instance. The age in which we live allows people of all abilities to earn. As long as your mind is sound, there are lots of things you can do and I'm sure the late Steven Hawkins would agree. Good luck.
Global Adventurer -WE are not all fortunate enough to be able to live within our means, even with absolute bare minimum amenities. Of course saving is desirable, but difficult if it means you can't eat or pay the rent :P
If your monthly costs are $1000 and your income is only $800, no amount of discipline will help you. I will grant you that for many people what you say is true - but not all, of course :)
I highly disagree with the renting part. Renting is sometimes cheaper at the moment but after your mortgage is paid off, You'll be saving so much money. I'm a homeowner and my interest was 3.25 for 15 years. I'm paying $1000 for mortgage. while it was $1600 for rent before I bought it.
XunMoon I pay 600 dollars a month in downtown Toronto. Electric included. So there are exceptions
You're right it can be cheaper short term, but think about this, $600 a month in rent , after 5 years you've paid your landlord $36,000, where if you owned your home, that money would be invested back into you. If you then sold your home after five years, not only would you get back a large portion of what you paid, but you would get all the extra money your home gained in value, which on average is about 7% a year, higher in some places. Owning is certainly the better deal in the long run, even after just a few short years. You do have a point though.
Its a case to case basis. There are some situations that its really wiser to buy than rent. Just do the math.
When i reach 54 i payed off my entire home. No loan, no rent to pay with my small pensionmoney untill i die and i can leave this life behind with a nice gift too my kids or family...
Kim Verduyckt Your generation is lucky. I can only afford a car OR college education OR moving out of my parents house. The economy is only good for billionaires and bankers, but bad for 19-35 year olds.
i understand the struggle these days... Buying property here in Belgium is almost mission impossible for a young couple or single person without the help from your parents.
I am 36 myself, buth i had the chance to buy my own house when i was 24. I was financialy able to do this and i am glad i did it. Buth i do realise this luck is not for everybody.
Kim Verduyckt You live in Europe? Go to Slovakia. You can buy a house for like 500 euro, or so I’ve heard.
Kim Verduyckt But I don’t blame you. Belgium has beautiful culture. Here in America there’s no culture and the houses are just as expensive.
I lent my best friend money for what she deemed an emergency 25years ago.initially she said she would give it back in a week, then a month. i slowly withdrew myself from her but about five years later i had to let it go realizing the friendship was more important than the money.
There's the hint that carries all the others: never spend more than 90% of your money. If you earn 1000, plan to spend only 900 and never more than that. Within 10 months you have an extra "month" of your earnings that can save you from emergencies and you can also spend on good and cheap oportunities. That means, when you don't save 10%, the initial 1000 costs more than 1000. And when you save it, the 900 will do the same the 1000 does and still guarantees you some financial security.
Cleiton Oliveira nothing offensive but if you're spending 90% of your income per paycheck, you're spending too much. 60% is a better zone to be around if you can manage it. As an example the credit union I'm with won't even allow me to pull out a personal loan if my debt to income ratio is over that amount. This is because they take into consideration standard cost of living after debts owed and fixed expenses are calculated. Of course, not everyone can make that work but if we use your example of 1000 and can manage the expenses down to 600 then in two of the pay periods you have 1200 instead of 200. Sadly, it's easier said than done lol
Thats good advice - so do you choose not to eat, or not pay your rent, or have no utilities? Your principle is good but not always achieveable. (read comment from Mandi , above)
What about the factor that you can sell the house on and as population increases supply and demand increases which means a house you bought for 100k 25 years ago is now worth 200k from the demand in the area and increase in population
Courtney-Jai 100,000 becoming 200,000 in 25 years is a return of just 2.81%. I know for a fact that the US markets have done 3 times better than that in the past 25 Years. So for instance if you had invested in the US markets 100,00 dollars 25 years back and stayed on rent, you would surely made atleast 2 times more that 200,000 dollars that you expect making from selling the 100,000 dollars house. Think about it.
Chirag Shah I was just making a point if was in property investment I would probably the statistics of financial growth, the way I see it the population is increasing therefore the demand is increasing and with that the supply becomes less making it worth more
Yeah, thankfully the reality is even better than that for homeowners. And in the scenario you describe, rental prices likely go up too, making rental even less attractive.
PlanetLotus exactly I'm saving for a house 2-3 years I'll have a decent deposit
He also left out the part of eventually paying off the purchase verse renting forever. Also 7% return at a bank is currently a flat lie. Somewhat shallow financial analysis, since he really just looks at a static one month/year perspective. But we can always just do math ourselves so there is that.
renting is throwing away money
in India.. you get 500 $ rent on a 200000$ property
Rent is everywhere... buying is better option.....even tho it's temporary also..can't take it with you when you're dead..
You can't take it with you, but you can give it to family or your kids, so that they are left behind with something.
Long-Term I think buying is definitely the better option, it creates an equity pool for you to build rather than just paying rent. Renting can be advantageous though. For a short-term living situation or maybe you don't have job history yet, renting can be useful. Plus, with the added costs of owning a home (lawncare, maintenance, improvements, etc.) buying a home can become very expensive, especially over time, while your 2-3% return could be off making you 7+%. I suppose it's an opportunity cost but I still feel that buying real estate, and buying it smart, is better long-term.
+yoyo What this video is trying to say is to put the fund in investments other than real estate and leave those with your kids. Real estate isn't the only investment option.
First bulb; 2:19
Second bulb; 4:03
Third bulb; 4:58
Fourth bulb; 9:44(lol)
Edit, i know i'm not first but i didnot cheat. Love your vids, keep it up.👍😄
11:21 4 more
Get real, hello ! Show me the bank that gives you 7% on savings ! ???
Haaa
In India banks gives 6%-9%
This video is a joke
Only because inflation in India is high so it cancels out.
B Mac S&P 500 is not a bank
Renting is cheaper than buying. That's the worst advice I've ever heard.
Dee Jarvis yeah... just do like everyone else. Have kids get a mortgage and work your whole life with three days off a year. Yup. Just do like everyone else because how can the masses be wrong.... smh
chiCo andtheMan Because maths. At the end you own a property which you can live in or sell. Do you want to rely on the state in your old age? If our parents had been able to do this, maybe we wouldn't even need to rent or buy and could actually live the dream. It's not about 'sticking it to the man' it just makes good financial sense. :D
Depends on how financially inept the individual is when it comes to handling money.
Your average person that rents and ends up spending all their money they could of saved/invested. Then yes getting a mortgage and buying a property will work out better as it acts as a 'forced' savings account.
However, if you rent but invest that extra money you save compared to a mortgage, in either a fund that returns 10% or learn and invest in individual stocks for potential of 10% and higher returns yearly. Then I would say renting is actually cheaper.
So yes, for the masses, buying is actually better as it works like a 'forced' savings account.
If your prepared to put in the time to learn about investing, and put that extra money from renting in to ETFs, other funds or individual stocks. Then renting is the way to go for financial freedom.
Its a case to case basis. There are some situations that its really wiser to buy than rent. Just do the math.
True Heart I can't think of an instance where renting is cheaper than a mortgage on an equivalent property.
Saying renters don't have to pay taxes or for repairs shows a lack of understanding. Who do you think is paying those things? The landlord because they are nice? Rent includes taxes and repairs. It's just not broken out for you.
The Free Mill ye lol just
on everything 24/7 water, aircon
My rent is a set amount each month without taxes. Am I missing something? They also cover repairs if something malfunctions. Lived in two places in California where this was the case. Was I just lucky?
No, what you describe is how it appears to the renter. You have a set rental rate that you pay to the landlord. When a landlord is deciding what to charge for rent, they add up any mortgage on the property, property taxes, property insurance, estimated cost of repairs, and a margin for profit. This is how they calculate what you pay. Even though those items are "taken care of" by the landlord, and in their name, they are using the money you pay in rent to pay them. Otherwise, it wouldn't be a profitable venture for them. So, if property taxes go up, the equation changes for the landlord, and the next time they set their rental rates before you renew your lease, your rent will go up to cover the increased property tax costs. This is why renting over the long term, on average, is almost always more expensive than buying: you are paying all the same costs (mortgage, taxes, insurance), plus a profit margin for the landlord for basically managing those logistics for you. And, in the end, you don't get equity in the property. They do.
Exactly. It drives me nuts to see videos like this with ridiculous claims like this. If renting is more profitable vs. ownership, why are there companies and people who are making a very lucrative career out of renting to other people?? This alone, not to mention the other fallacies in this video, tells me all I need to know about the producers of this series: they're morons.
The Free Mill you are correct. But if a renter does their research by looking at the areas rental market rate he/she technically isn't paying for whatever the landlord itemized. I say this simply because it's the going market rate for his/her size home.
renting versus buying a home varies depending on where you live. where I live my mortgage, property taxes, utilities, and home repairs combined are less than what my friends pay in rent for much smaller houses
I'm learning how to be a grown up on the Internet because my parents have failed me.
May May lol. I dunno if you were joking, but it's sad and funny at the same time. They got us... Lol.
With renting you lose long term benefits, but buying a place is an investment in the future!
You sound like you memorized the bank's brochure.
Michael Tennyson Yes you "a place as an investment in the future" as in a home to lease out, right? 😕🏘💰
Nobody has seen the future. It's futile to invest in it.
The only way you can call it an investment is either having a guarantee that you'll be able to sell it for higher than what you paid for, OR buying a place in order to rent it and getting between 5% and 7% return on that purchase, then yes it's an investment. Otherwise IT'S AN EXPENSE. Forget all the brainwashing they feed you with.
It depends on the situation sometime you want to sell it but nobody buy it what are you going to do.
7% interest on savings?! I know this was not filmed in 2018.
invest in funds, index funds, mutual funds, ETFs
The most I've seen is like 1.5% on savings accounts. On other types of accounts I don't think I've seen more than 3% so idk where they're getting 7% from
saving account is different with a deposit account.
the interest on a deposit account is better than saving account its like at least 4% interest but you can't do withdrawal until the time (usually 1year~3 year)
7% ? Maybe in 1980.
W
I was born in Albania and moved in Greece when I was 5, now 23 (will be tomorrow) I have moved in UK. Second time immigrant in my life already and I own my friend 1600£ so I could start my life.
Those were some good advices. Thank you but I kinda already knew them. I'm just not good with economy.
Your information on rent prices and savings account interest rates is absurdly wrong. Please make a followup video adressing your error
suppa sandwich lo
I'm sorry but he's right. If you rent and put the difference in the stock market you will be a lot richer than otherwise. This is especially true for metro areas were down payments can be $200,000. There are of course situations were buying will be cheaper but for many Americans buying is not cheaper anymore. I do agree he did make a blunder using a bank account as an example but his main point still stands.
Batmangutten bro where the heck is a down payment 200k? Lol im in the mortgage industry. Interest rates are lower than they ever have been and so are down payments. The average down payment for a conventional loan is 5% of the purchase price and 3% for an FHA loan. My mortgage for 3 bedroom 2 bathroom home is $790/m. Quit trolling
Major metro areas like the Bay Area, New York City, London etc. That is assuming a 20% down payment. Even areas were homes are half the price (500K) it might not be worth it to buy. I know interest rates are that low but even than in many areas it could still be worth it to rent and invest the difference. I have lived outside major metro areas and than it is usually worth it to buy. For example we own a house in Norway and we rent out the bottom half for about $800 dollars a month. It isn't even that big of a house. Right now we're renting to a student who's going to college but when he gets a job it would be way better for him to buy a house there compared to renting. But even a 5%-10% down payment here in some metro areas can range between $50K-$100K and since housing here is already worth millions of dollars it seems less likely that it will continue to rise as fast as a percentage increase going forward.
That 3 bedroom 2 bathroom would go for $8K a month with a 20% down payment for 30 years were I live. Renting out a comparable apartment would be about $2.5K. Edit: I forgot to mention that you would have to pay $20K in property taxes on that house every year also. Anyways my point is that renting does make sense in certain situations and so does buying and that there isn't a clear and cut answer that applies to everyone.
Avoid buying expensive but useless things. For example : buying a lamborghini or any other expensive cars without value. They are for show off.
when they see it everyone will be really careful or even slow so theyll wait fo you to leave
Or expensive bags or mobile phones
Right, none of it will matter if you lose your house. You’ll become a fancy homeless person.
it depends I own a BMW 7-series that was cheap at 4k but am looking at buying a limo for income growth as the hire rates are £50 an hour say 10 hours a week would gross £25,000 a year
*Wonderful! Thank you very much. But you forget about one important fact. Second-hand helps to save money and teach how to manage family budget.*
Used vs. new vehicles with associated costs.
Awesome financial advice!! Thumbs up!!
4:42 WHOA! A savings account with 7% interest? That hasn't happened since the '80's. And a $100,000 home won't cost you $550 a month. You can double that figure. And people who rent, do it because they don't have $100,000 to put down on a home. Even the vast majority of people who buy don't have $100,000 sitting in the bank. Your numbers here are completely unrealistic. Your logic is even horrible. Renting is very rarely more financially more responsible than buying. Renting provides absolutely no long term benefits. At best, renting can only be said to be cheaper in the short term. Once you look at the finances over a 10 year period, buying is so much cheaper.
And 18 years of a single kid will cost you $250,000? I think not. That's 1100 a month or $275 a week. The only real cost of a kid is the food they eat and clothes they wear. They share the things you would have anyway. You'd still have the same bills for electricity, gas, water, sewer, trash collection, and mortgage/rent if you didn't have a kid. The only real cost is food and clothing. The rest is elective. I can eat like a king on $275 a week.
Atheist In Louisiana I agree. The bills may be a little higher but you still have to pay them.
This video is so weird, they talk like they're paying for groceries at california prices, but they have rent prices like they're renting a house in the middle of nowhere. Absolute nonsense. When has anyone rented a 100k dollar house for 550$ a month, I live in Indiana where housing is cheap AF and nobody here is renting for 550$ a month unless it's a 40k dollar home.
No, if you see raising kids as simply maintaining their existence then you'd be a horrible parent. you need to be able to pay for their phone, some form of education, a little bit of spoiling(just a bit, like some family time, eating out, theater, at least some thing for birthdays and maybe a vacation or 2) etc. Aside from that though, children these days have been very spoiled and sometimes getting more of what they want as opposed to what they need so when I say spoil them a little put emphasis on "a little".
As for water, electric and gas prices, you aren't sharing bathing water, hand washing water, water heating, lights etc. So yeah you definitely will expect a price hike
Rent, mortgage, electric and practically everything else is impacted by having had kids. People buy and rent larger, more expensive places than they would without kids because they need the extra space and bedrooms. Same with electricity, water, etc. the kids use more of it. Long term, it is absolutely more expensive in almost every measurable way to have kids. I don’t doubt the $230,000 estimate is correct. Higher even.
and medical
Who else isnt even an adult?
JoeLikes GT me
JoeLikes GT me
JoeLikes GT what is this
me
I'm an adult but I don't want to be lol
For me, its a war between "Needs Vs. Wants"
don't know which part of the country you're talking about but buying early is the key to financial freedom at where i am. housing prices skyrocketing in the past past decade, tripling in value and rent is 1000/room (yes, just the room not a 1room apt). for anyone wanting to buy a home now, it is at least 1.2m+ for a 1000sq and tons of people bidding you out. where 4 years ago, one could get a house for under 1m or around the price.
If you wait until you are emotionally and financially ready for children you will no longer have the energy for them, and you will still not be emotionally or financially ready to have children.
Right. For the most part, unless you're a teenager, you're either ready or you're not . . . at least emotionally. Financially, you might never be ready, no matter how long you wait.
renting is better than owning? right, it depends on where you are I own I pay $450 a month mortgage for a 4 bedroom house with 2 lots yet a one bedroom apartment across the street is $950 a month all my bills in a 4 bedroom 2 story house is still less than a one bedroom apartment with hydro and water included my last apartment was $750 a month which was still less than all my bills
So at the end of buying,what's next??? Sell and rebuy?? 🤔After the end of living ,who will the home go to😐😐😕.. investing in a home for long purpose and then what...
Next home you buy, check short sales and foreclosures. Then you won't have a mortgage.
Your comment about renting being cheaper than purchasing is wrong. Renting in the long term is definitely more expensive, when yu buy a house yu pay a lump sum/mortgage, a fixed amount whereas rent will continue forever.
stock market went up 25% in 2017 and many years before that.
MK
Property taxes never go away and insurance too! We owned and rented, and then we had the market failed us and so did the bank. We were never late and they raised our mortgage and wouldn’t work with us. We lost it and they got insurance off of it and resold it for less than half A family put out of a house and they made a profit! Remember that the bank owns your home until it’s paid off!! And they have more power. It sucks, so I don’t mind renting, if something breaks, I don’t have to pay it. Plus, I have a screaming deal. $1000 a month in San Diego California for a 2bdrm house on a quarter of an acre with a great view. And our rent has never been raised in 5 yrs. so sometimes it does benefit.
We are all just renting. You can own a place until you don't pay the taxes or the local constabulary says your place is in the way of the new off ramp, or business park, etc... etc...
MK you have to pay the maintenance yourself if you buy. It paid by landlord if you rent
In my area of Oregon the cost of renting is so high it is actually cheaper to get a mortgage. You can rent a nice 3 bedroom 2 bath here for 2500+ a month, or buy one and pay 1800 a month in mortgage payments, rent out the other two rooms and drop your payment down to 600 a month. This allows you to easily pay 1000 more a month than your minimum payment on your mortgage and still be well below the cost of renting, with the added benefit of being able to be an adult and do home projects in the home you live in without asking for permission.
TIL: kids can only be happy if parents make plenty of money.
They lost me at the first point.
I grew up in a working class family at no point did I feel like I wish my family had more money. That is because even if we didn’t have the money we have a good family relation that kept everyone United. He lost me at that assumption as well.
Maybe he didn't mean to say that kids can ONLY be happy in a financially stable environment, but instead that it's MORE LIKELY that they'll be happy if you do raise them in a financially stable environment.
Josh Roberts kids in wealthier families have higher suicide rates... does that mean they’re happier?
oscar trujillo if that's a fact then definitely not, though there could still be other factors to take in. I just think that a child raised in a middle-upper class family would have a greater quality of life overall to one who is born into extreme poverty. If everyone in the history of modern society agreed that money did absolutely nothing positive for raising their states of happiness and well being, there would be no reason to create a wealth hierarchy in the first place and we wouldn't even be having this argument right now.
you must be poor
First, you don't ask for a promotion. You ask what are goals that you should accomplish, in order to be considered for a promotion. You want your boss to think you are motivated, but not out for his or her job.
Second, if you feel that you need to move a lot, then renting is cheaper. If you plan to live in the same house for 30 or 40 years, then buying is cheaper. Plus, you can hang all the pictures you want and paint the walls any color without the wrath of the landlord. And landlords are far slower at repairs and renovations than you are.
I don't know where you got the calculations on renting vs. buying, but even in the rural area I live in, $550.00 will only get you a trailer on a lot. Renting has become astronomical & at least in the southeast it is cheaper to buy when you can. Also, a good point you made was about saving. Even if you can only save $5 or $10 a pay period, you need to do so.Otherwise you're going to be looking at old age with nothing much besides Social Security to depend on. And we all know how solvent that is. I don't care how poor you are, it's possible to put a couple of dollars away. It adds up in time. Trust me, once you get used to doing it, you won't miss it, & when you get old you'll be glad to see that nice chunk of change. And trust me, regardless of what you may think, most of you will grow old.
I bought at 19 yrs old. At 29 I own my house. I am now 30. Well worth buying then renting.. Zero payment just have to worry about taxes at the end of the year plus I'm a handy man at that..
"Get a degree."
"It's best to be debt free."
🙃
Its best not to impulse buy!
Where can you rent a 100,000 house for 550???
PREEMINENCE bro a studio apt is 600. Idk where they got these numbers from 🤦🏻♂️
@@salvadoraguirre6739 😂😂😂😂 They pulled those numbers out of thin air. I rock with Bright Side. But they didnt do good research for this
In the Netherlands 😂🇳🇱
idk,
I stopped watching at 7% interest!!!
Bingo! Same here.
marveeeee ,lol
marveeeee most Americans companies give you 12% in return every year
Pablo Esco it wasn’t talking about company’s ! He was talking about banks give 7%
Unsubscribed. Invalidates everything on this channel.
I love when financial advice on how to be good with money includes ridiculously expensive vacations and not saving that money or investing it. Take time off, ok, but going on vacations is never cheap and ALWAYS a waste of money(no matter how cheap or how good of a deal, that money can go to other things)
1. 2:22
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Thank you
Lol thx 😂
😂😂😂
Hey, I did it first!
You are so right
I'm going to chime in here and state that your assessment on owning vs. renting a home is overly simplistic, flawed, and short-sighted. It doesn't take into account markets where mortgage rates are low, rent is high, and assumes a good rate on return in a savings account (mine delivers nowhere near 7%). It also fails to consider the fact that a home is a hedge against inflation. With inflation, your rent will go up, but with a home, your mortgage rates can be fixed and manageable. If mortgage rates were to spike, you can simply re-amortize to keep your payments the same or maybe even make them lower. Re-amortization means it will take longer to pay off your home, but the day will come when it's paid off, and that makes home ownership part of a good strong retirement strategy. With a paid off home, a retiree can cash in their home, downsize into a less expensive market, and free up all that equity, whereas a renter is still going to pay their rent every month. As for the maintenance expense, it's never as much as it's made out to be, especially for a handyperson.
It depends on the area. We bought our house for $14K in 1976, it's probably worth about $50K now. We paid it off in the 1990's so all it costs is property tax, insurance, and maintenance.
Also like to point out the fact that you can rent out room of your house. I have my upstairs rented and one of my spare bedrooms. Not too hard to pay off a 30K loan in 3 years if your getting 7,200 a year.
Yeah, it seems to me like the rent vs buy question depends a lot on the situation. Realistically, unless you need or want short-term flexibility, most people would rather buy, for the autonomy if nothing else. So the real question is whether it's a good time and place to buy, not whether you should rent or buy.
Yep autonomy was the reason we bought our house. The landlord said, "Get rid of the dog or move." We moved.
$7200 per year is $21,600 in three years - how does that pay off a 30K loan?? Or are you saying that you are also paying it off from your employment income?
In reading these comments you people clearly miss the point. Don't get married and have kids.
mooky loooool
In the end what is all the money you've accrued worth?
Actually, if you rent, you do pay for cost of maintenance, tax and your share of the mortgage. Yes, they are not itemized, but in determining a tenant's rent, the homeowner will take into account the mortgage and the tax that he has to pay. Landlords will never rent out their property at a loss, they will factor in incidentals in determining your rent, plus of course their rental income on top of it.
Generally speaking, it is a good rule of thumb to buy your house, provided that itnis within your price range and you do not over exert yourself. It only becomes a problem if you commit to buy a house that you can't afford.
I'm sorry I have to disagree with number 12. I live in yakima washington and around here renting a house will run you anywhere from 8 to 1400$ and when something goes wrong the landlord takes days if not weeks to fix it. So you end up fixing it yourself and if you want your money back he don't have to give it back (pos landlord) you have to sue him in small claims court which cost money and time that honestly isn't worth it. So just remember EVERY SITUATION IS DIFFERENT!
7% interest? Is my savings account with the mob?
Mauricio Alvarez i have never heard of a bank even giving out that interest. Its more like 0.000243%
Rent for 500, where??? (😕 maybe in a high crime forsaken area...in that case I'm not that desperate to save money)
EDWIN JOHNES KJ from INDIA
Sir I do have some points to add ........
1.Rather that spending too much on necessity items, go for their cheap but good quality alternatives .
For e.g. watches - Not everybody will need a Rolex or a Victorinox , instead you can go for a Casio which is way much cheaper and also you don't have to compromise on quality.
2. There are Brands which give better value for money that just awesome logos .
they can also be cost - effective for a better quality.
3.Always keep a track on yours' expenses (as well as your partner's expenses of you are living together)
And also be a conscious payer...Because
IT'S YOUR MONEY..........DON'T WASTE IT.
Also I rent for $950/ month. If i bought a house for 100,000 and paid $550 mortgage then id have no mortgage in like 15 years whereas I'd have paid 180,000 in rent by that point and would have to continue paying forever an amount that would increase based on inflation.
Also what fricken bank offers a rate of 7% interest? Is this the 60's? Lol
Heather Foster Exactly! I asked myself the same thing: what bank pays that much on interest? 🤣
A diversified stocks portfolio or the S&P 500 index fund yield at least a 10%. (up to 35%) annually. So if you had invested that $100k in the stock market you would have $417k by 15 years. Take $180k out for rent and still have $237k which is more than double your money in 15 years. Also real estate have never appreciated in price as much as recently because of the low interest rate, so dont bank on having similar returns in the future.
$550/month house rent?? Where is that? In a ghetto?
I agree. My daughter lives in the Phoenix area. She pays $1000 a month rent with her roommate paying $1000 as well. I asked her why she couldn't get anything cheaper. She said you can get a place under $1000 if you live in the slum in downtown Phoenix, where the drug dealers hang out, and the prostitutes are prevalent. Crime is high. I told her she needs to stay away from there.
Yeah last I checked I was paying $1100 a month for someone's spare bedroom in their house.
I have properties in West Baltimore - yep, the hood - and my cheapest house rents for $800 per month.
Lol not in my ghetto. I'm in philly and it's starting at 750 for a decent apartment .
Around here (Minneapolis/St Paul metro area) the only apartment you could rent for 550/month would be on fire.
Don't take out a new loan to pay off an old one??? You'd rather pay your credit card debt at 20% than a personal loan at 5%?
ZoHBo we have done this. Buy a new credit card to pay for older one. (For first one year there is no interest on credit card in india for the bank at which my dad had account) and it did save a lot of money. My dad is awesome.
ZoHBo work and pay that 20% card down and you will not run it back up. Pay it off with a low interest loan you most likely will run the card back up an still have the loan. Pay off your debt an live below your income. If you must use an high interest loan pay it off in under 1 month then you pay no interest.
I'm not sure everyone can afford their credit card debt. Some people carry 10's of thousands in CC debt.
Excellent comment..same with home equity loan and paying off a mortgage..this video got that wrong big time
I thought this too. I saved thousands by using a personal loan to pay off credit card debt I incurred in college. It was a great financial decision.
Buying a home vs renting:My parents spent about $70,000 for a plot of land, 10 years later spent about $365,000 building a house on it. In 2010 even in the midst of the housing bubble and in perhaps the worst market for a seller they sold it at a huge loss (2 years prior the house appraised at $775,000) for $525,000. So even in a horrendous market they still made $90,000 living there for 5 years. I pay $840 in rent and in that same 5 year period that will add up to $50,400. So I can either buy a home that will appreciate in value, have equity in that home, or throw money away on rent that I never get back when I move out. Hmmm....
Here's an error in this video: 7% interest rate on a savings account in a bank? This isn't the 1980s. The Federal Reserve's interest rates are way too low to expect a 7% APY return rate on a savings account or CD. Credit Union CDs in 2018 tend to be between 2% and 3%. This difference could affect one's decision to rent or own. Actually, owning (*after* the mortgage is paid off) could be cheaper than renting. I know it is where I live.
Also, if you rent, yes, you do pay taxes on the property. It's just that it's baked into the renting cost itself.
why does everybody think interest rates come only from the bank account? ok so you should look into funds that track stocks, they make well over 7%, mutual funds and ETFs are already diversified
If you get financial problems and you can't pay (for example lost job).
Situation 1 (mortgage) - You sell the house and from the money, you received you pay off rest of the mortgage and for some time your new rent. The time you need to find a new job.
Situation 2 (rent) - Rent is due. The landlord wants his money. You don't have them. So he kicks you out. Now you're jobless AND homeless.
I'd choose 1st any time.
7% interest in the bank 🤔... which bank is that 😜
Rent $550 🤪
🤯🤯🤯
lol Exactly...smh
Hahahaha
Most houses for rent here run about 750 a month don't know where your getting your numbers at
Gohan ssb3 , here in the area of New York I am in. One section average is over $800 move away an hour or so and it may average $500 further away and it goes down. I live well over 600 miles from New York City
In Orlando a 3bedroom rental is 1500.mo. The mortgage for the same house 700 to 800mo. How is renting cheaper?
This is how anecdotal evidence is a problem Many people don't buy and rent in the same area. If you try to buy a three bedroom house in Manhattan for example--lol. However, If you Rent a three Bedroom apartment in Manhattan, it's going to be crazy amounts of money per month. So if you were renting a 3 bedroom in manhattan, and you decide to buy a house instead, you aren't going to be buying a house in manhattan. Instead, you May buy the house from the surrounding counties. Well property prices would be cheaper their and so would the mortgages. So then you would go on the internet and say "Well, I was renting, and when I bought a house, my monthly payments plummeted. You will forget to say that the apartment was in NYC and the house was Dutchess County New York.
Also, I'll go ahead and point out that Rent around Dutchess and Orange County New York for a 2 bedroom can go for 1500+ a month and 3 bedroom houses can be 500 k dollars.
Um currently renting small house with 3 beds 1400k a month..
I don't know where you live but around here a $100,000 house rents for about $1200.00 a mortgage for the same house is around $600 depending on how much of a down payment.
banks are currently paying about 2%
I used to be a banker for 2 banks since 2015. I’ve never ever seen them give more than 0.001% on a regular saving account. If you were referring to the stock market or other investments I’d agree. The banks make way more off you.... You practically make nothing off them
Or you could encourage your kid to work and save up to go to college. Instead we act as if we have a moral obligation to put our kids through college
William J Müller Proud Conservative so they can have student debts that they cant pay off until they're 35? sounds good to me.
dep's, did you miss the part where he said "work and save up for college"? I'll bet you still haven't paid your loans back, you should ask for a refund. Before you go all nuts, in state tuition in MO is about 5k per semester for 15 hours. Add in a grand for books, and that is 12k per year. That is very doable for anybody who wants to do it. He/she can live at home and work part time. That doesn't cover it all, so mom/dad will have to kick in a few grand, but there is something very noble about paying your way through school and being your own person. Also, even places like McDonalds have tuition assistance, as do lots of employers. Loans and deep debt is not the only way to get that sheep skin...imagine that!
jamie t uh buddy i can retire at 25, and "mom and dad may have to throw in a few grand" is not paying your way through college. There is nothing noble about any of it. Its just a choice. Instead of being a child and assuming you know everything about ppl online, you get back to studying. Good day.
dsp's Former Lawyer I think ur missing the bigger picture. Many people won’t mind throwing in a couple grand to put their child threw college but if they expect the whole thing paid off is just being entitled. There’s plenty of ways to pay for college whether it’s through scholarships or avoiding ur student debts.
William J Müller Proud Conservative how don’t you believe in investing in your child’s future education?
"Today your 20"
That felt like a headshot
you're
Nice video I liked all the suggestions. I'm 28 living in socal and rent. I can't imagine owning a house now. My rent is $1025 tho. I'm debt free, have a job to pay bills. Currently trying to find a way for passive income.
7% savings account? 2.15 is the best I have seen this year.
Dam Catchum in india you get upto 7.5 %
First... where can you buy a house for $100 grand and rent for $550 a month? Are we talking a blighted urban area, or in the year 1975?
In the south you can buy a nice house for 120,000. And rent for a 2 bedroom apartment can cost as low as $450 or $600 with everything included including cable.
In the Netherlands you rent a house sometimes for as low as 200 euro a month
4 lightbulbs at 35 seconds in. :)
So, over $1,000 per month per kid? Cool, that's what is can cost for an adult to live, including transportation, food, utilities, insurance, rent/house payment, etc. Must be an expensive kid. Or the parents just waste the money.
For low income people, they get tax benefits, earned income credit, etc. and it doesn't cost much. And paying for college? I don't know even one person from my family, or any of my friends' families that paid anything for their kids' college. Just grants and student loans.
It also costs MUCH less to buy a house than to rent. Where did you get the rent price? Buying a 2 bedroom house in my city would cost $400 to $450 per month. Renting the same home in the same city and area costs $900 per month.
And 7% interest? In your dreams. Bank of America and Chase are at .01%, Capital One is at .75% Less than one percent interest.
Please check actual rates and current information next time. You could easily go on bank websites to find current rates. Or for real estate, go on zillow and check prices vs renting in the same place.