[–] TheScattMan 0 points 3 points 3 points (+3|-0) ago
Sorrt, that's stupid advice. It makes no economical sense what so ever. Just don't get an adjustable rate loan and buy a home that is well within your means. Paying $600 into your own home loan is better than paying someone elses. Sure you could argue it's 'bad investment', but with that logic renting is much worse. Renting is also very volatile. Unlike popular opinion, home owners can kick you out or raise the rent as much as they want between lease agreements.
[–] acheron2012 0 points 1 point 1 point (+1|-0) ago
As 5 word headlines and 5 sentence paragraphs go it isn't entirely WRONG. But it is grossly misleading. Basically Click Bait for people that can't afford a house and want to be told their fiscal irresponsibility is a virtue.
No, you should probably not buy a house if you are contemplating moving to another state in the next couple years. No you should not buy a house if you only have $600 in the bank. No you should not buy a house if the payments are going to be 60% of your Gross income.
But when you look at the "Time Value of Money", a foundational component of economics, home ownership is now more than ever before in history the best, quite possibly the ONLY remaining, way for the average person to accumulate wealth -- for the mathematically challenged ALL investment grade paper's return on investment is below the REAL rate of inflation. So you are literally risking your savings in the hope that you will go broke more slowly than if you just bury your money in the back yard.
Stocks are an exception of course, but stocks are pure speculation at this point. IF you get out at the right time you may make a very large return. IF you are a week late you may not even get your principle back. There is no underlying value in stocks and hasn't been for about 25 years. It is gambling. By correlation this makes a 401K, upon which a large majority of the population is depending for retirement, slightly more dangerous than selling cattle futures.
(technically there is underlying value of course. But it lies very very far indeed under the market capitalization. WHEN, not if, the stock market loses 80% of its value stocks will have returned to their 600 year historic norms and will once again be a valid investment vehicle. Assuming there is an exchange or even country to buy them on.)
IF you are fiscally able it is broadly good advice to buy a house you can easily afford. DO keep in mind you will have to pay insurance and maintenance. Also realize you will be able to deduct the loan interest from your taxes - one of few deductions left to average people.
Every month you get a little closer to paying off the loan. Assuming the world isn't destroyed by ISIS, or a meteor, or flood, contrary to what you believe now years will pass. The retail value of your house may skyrocket or it may go down greatly. But with a fixed rate loan you will ALWAYS have a roof over your head at a known price and location. Eventually, before you realize it, you will actually own a place to live. And then only a government whim can kick you out on the street. But at least you can paint your bedroom purple.
[–] schwanstucker 0 points 5 points 5 points (+5|-0) ago
This "investment planner" is just trying to feather his own nest. People who own homes are more prosperous. If they are able to get fixed rate loans, they can pay off their homes and have the equity available.
Similarly, investment real estate (if you can afford it is better than other investments for one simple reason: Buy a rental, the TENANT pays for it.)
Besides. In order for their to BE rentals, you must have people who believe that OWNING rentals is good business. Why is that? Oh. Yeah. It's a fine investment.
Here in the San Diego area, renting has become a nightmare, with people paying nearly a full house payment out of pocket for the place they live--and that doesn't include the tax benefits.
Just remember (goes for me, too. I'm a retired real estate broker)--the person who says, "Don't invest in..." wants you to invest in something else. Meaning, freely translated, "In what HE sells."
[–] tragicwhale [S] ago
Very sound argument. I'll keep that in mind.