Rent vs Buy FAQ
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- เผยแพร่เมื่อ 16 ก.ย. 2024
- A FAQ for the main channel video on renting vs buying.
Offset, Redraw and Equity loans explained.
Main video: • EEVblog 1430 - Rent vs...
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'Capitalism' seems to some ppl as the best economic system not realizing that it worked because of the existence of systemic exploitation by a group of another group. When seen from the viewpoint of the exploiter class, it works fine. What we have today is that the exploiter class is shrinking, and many of those that used to benefit are now finding out that it's impossible for them or their children to have a decent future, because everything is so expensive, starting with the prices of homes and property. The western economic system has always been based on exploitation, but now the group that used to partially benefit from it is being slowly excluded. Hopefully we can come up with a new system that is not based on exploitation of any group by any group.
"Exploiter class"? "New system that is not based on exploitation of any group by any group"? We know precisely what your 'new system' is, comrade. Shove it.
@@captainsausages1205 Denying historical and contemporary reality isn't going to solve any of the problems most of us and our progeny are facing and will face. Stop catering to your nostalgia and face reality head on.
All depends on what side of the river you are. Obviously it is what you are saying. But when i think of it. Nothing stops someone to become successful, financially. But living the flatlined life of having everything in balance has become very hard. People have to invest more of themselves than ever before to have a good steady life. And that i do not agree with. Working class should have the ability to have great balance in life.
It's not a secret what life was like before capitalism. It has made the world objectively better but because you aren't one of the minority of massive winners and just an average beneficiary its all worthless right?
I get it you just finished school and the world as an adult is scary but making up fantasy stories about capitalism isn't go to magically change your circumstances. Get a useful skill and go an live your life; whining about imaginary problems will just make you miserable.
Spot on Dave.
Sorry to add yet one more question (especially given 23:58, hah), but I do have one:
22:34/22:38 - does getting the line of credit create a lien on property that you'd otherwise own outright? Or how does the collateral aspect work?
Thank you! Really!
Its called Revolving Credit in NZ, a product offered by ASB Bank which is owned by Commonwealth Bank of Australia I think...
Interest rates are on par.. mid to high 2% is about right.
This, of course, only works for people that have financial discipline. It'll never work for the guys that spend whatever they have on the newest toy, and never save a dime.
One minor exception to everyone "should" overpay: Some less scrupulous, often publicly-traded, financial institutions will charge a "pre-payment penalty" on a loan. I guess the idea is they're losing out on that interest, so they make it up another way to keep the margins up. My very first car loan was through such an institution. I refinanced that loan through a more reasonable institution (with no such penalty) as quickly as I could, and will no longer do business with such a company. But, if one's situation lands them here, that could be one good reason not to overpay.
Then don't sign up fo those loans.
@@EEVblog2 Believe you me, that lesson was learned.
I dont agree with the offset being a better choice. Yes you should always pay more per month to reduce the term of your loan. So instead of 15/30 years you can be done in in 10/20 or less. Not to use as equity credit. You should have enough in savings to cover those expenses.
Called Offset Mortgage here in the UK. I also tied in my savings accounts meaning didnt pay interest on the mortgage debt of the equivalent amount of the savings. Net result after paying in extra also is i paid off my mortgage early and saved 25k in interest.
Called offset mortgage in the UK - domestic interest rate is around 3.5 - 4% compared to about 1.0 - to 1.5% for other loans. So as you say, very handy - but interest is almost double ordinary mortgage rate
Ground hog day 🤔
The way I see it is Dave is putting a lot of money into more rooms to do things, when he would not be if he just crammed everything into a smaller space. Property could be seen as a form of currency value independent savings, which is probably a good idea. I maintain my life in sort of complicated, so I have some other concerns that don't produce this same reasoning. Fundamentally though, I sort of take the view that whatever you have can for some reason or other be demolished, so my attitude is to try not to be in a trap where you have worked too hard to achieve whatever.
That was quite intresting.
Thanks for the follow up, very informative. Im new to all of this so bear with me, but when you mentioned taking a line of credit/equity out of your paid off home to buy an office (your example of 500k), why is this beneficial compared to buying the office with a regular loan? Is the interest rate less? In this case the only downfall would be your house is being used as leverage/collateral right?
Yes, the interest rate is WAY less on residential loan than a commercial property loan. Not to mention the red tape and them combing through your business finances.
just turn every real dollar into a real dollar plus eighteen positive virtual dollars plus seventeen negative virtual dollars
"The best return you can ever get is investing in your own successful business"
Lol so you admit you made way more than $400k by reinvesting the money in your own business and other assets...24 minutes to say that!
Videos saying your critics are wrong when they are clearly right isn't a good look and moving the goalposts to an unrealistic scenario isn't great either.
Just say you are wrong next time as its way faster.
Don't just assume, you can look foolish. Actually, I also spent a lot of that money with a several year experiment with a full time employee, that was hard to justify any return on actual investment. Many would count that as complere or partial loss of that money.