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Speaker 1: Welcome to How the Money. I'm Joel and I in

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Speaker 1: that and today we're asking the question should you be

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Speaker 1: buying or renting in an insane housing market? That is right, buddy,

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Speaker 1: We are talking all about housing during this episode, specifically because,

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Speaker 1: like you mentioned, it is insane right now. Prices are

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Speaker 1: hi and we're gonna talk a lot about that during

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Speaker 1: this episode. But first I wanted to share with you, uh,

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Speaker 1: something crazy that I was able to witness firsthand at

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Speaker 1: our local hardware store. All right, and it's crazy because

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Speaker 1: it almost happened to me. It wasn't something I witnessed.

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Speaker 1: It's something I think I almost experienced firsthand. Let me guess.

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Speaker 1: A shovel to the face. Why why do you always

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Speaker 1: choose violence? I don't know. It would have been a

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Speaker 1: good story. No, no, no shovel to the phase, No

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Speaker 1: right to the face. I didn't step on anything. I

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Speaker 1: was there picking up some supplies for a little project

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Speaker 1: I was doing, and a lady approached me, and she

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Speaker 1: said that she had a one eighty dollar gift card

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Speaker 1: Low's gift card, and that she needed a hundred dollars

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Speaker 1: cash to pay to get the boot taken off her car.

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Speaker 1: Out in the parking lot, and I was like, wait,

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Speaker 1: what what you know? Once I got her story, I

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Speaker 1: was trying to figure out what was going on, and

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Speaker 1: then I realized, well, it doesn't doesn't really matter because

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Speaker 1: I don't have a hundred bucks on me. She was

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Speaker 1: looking for a hundred dollars cash, and she's like, okay,

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Speaker 1: no problem. And she explained it to me too when

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Speaker 1: she was asking h if I had a hundred dollars,

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Speaker 1: because she said, hey, I will check out with you

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Speaker 1: and you can use the card to pay for whatever

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Speaker 1: you need to buy as long as it's less than

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Speaker 1: a hundred eighty dollars and you'll see the remaining balance

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Speaker 1: on there. You get the card, and then you just

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Speaker 1: give me a hundred dollars cash. There's no risk. That's

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Speaker 1: what she said. And so later on when I was

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Speaker 1: checking out that she was with another guy in the

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Speaker 1: checkout line, I was like, oh man, there was a dude.

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Speaker 1: He had a hundred bucks. And so in my mind

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Speaker 1: I was thinking, you know what, this is a great

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Speaker 1: case to always have a hundred dollars cash on your

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Speaker 1: person to be able to take advantage of something like this, right,

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Speaker 1: And so I was like, good for him, he checked out,

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Speaker 1: he saw the you know, the receipt printed out the

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Speaker 1: remaining balance on the card. She gave him the card.

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Speaker 1: I watched him give her a hundred bucks. He left,

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Speaker 1: she left. It looked like it was going to have

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Speaker 1: a happy ending, and maybe it did. However, it was

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Speaker 1: like later that evening, It's like I kept thinking through that,

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Speaker 1: like something about that just stood out to be, as

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Speaker 1: you know, not necessarily being perfectly on the up and up,

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Speaker 1: and you know what that probably will I can I

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Speaker 1: guess here, okay, what where's the where's the flaw or

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Speaker 1: how just got the gift card number and she could

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Speaker 1: use it online exactly. She could immediately so she could

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Speaker 1: go home and do it herself, or she could instantly,

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Speaker 1: uh text somebody else and be like pull the plug

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Speaker 1: or whatever. And whether it's draining the funds out of

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Speaker 1: that account, you know, from that card, or going ahead

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Speaker 1: and just purchasing whatever it is that they want to purchase,

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Speaker 1: because like you said, it was an act of card.

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Speaker 1: She had the number, and even though the new guy

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Speaker 1: he had the physical card, he was walking out of

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Speaker 1: the story. It could potentially be days or even weeks

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Speaker 1: before he needs to make another purchase, by which time

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Speaker 1: that money is going to be long gone. And it

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Speaker 1: was like one of those instances where where it just

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Speaker 1: came to I'm sure I was in the shower actually,

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Speaker 1: like not thinking about it, and all of a sudden,

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Speaker 1: it just like you know, the thought fleded into my mind.

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Speaker 1: Oh no, that guy just got scammed, and I realized

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Speaker 1: and yeah, and I put it together. I was just like,

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Speaker 1: that is how you do it. And so I share

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Speaker 1: that because I want to make sure that if anybody

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Speaker 1: encounters a situation like this, I mean, I'm not gonna

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Speaker 1: tell you not to do it, because perhaps somebody that's

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Speaker 1: truly the situation that they are in. I could definitely

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Speaker 1: see it working out if you were buying at least

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Speaker 1: a minimum of worth of stuff exactly. But if you

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Speaker 1: are counting on coming back and using that card in

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Speaker 1: the future, then I think you might be sorry out

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Speaker 1: of luck. In his case, it looked like he always

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Speaker 1: had maybe like thirty to fifty dollars worth of stuff.

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Speaker 1: I don't exactly know, but yeah, if you're only dropping

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Speaker 1: like ten bucks, I mean, if you're going to spend

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Speaker 1: a hundred twenty dollars and she's asking for a hundred bucks.

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Speaker 1: I think that could be a situation where okay, like

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Speaker 1: if everything lines up and and I'm able to actually

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Speaker 1: do this, there are no flaws, there's there are no

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Speaker 1: holes in this plan, but it definitely seems like that

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Speaker 1: there's a chance for for somebody to take advantage of

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Speaker 1: somebody else well, and and sometimes criminals will do that

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Speaker 1: with gift cards that are on the shelf, Like they

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Speaker 1: will scratch off the stuff on the back and they

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Speaker 1: will use those funds. You buy that gift card from

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Speaker 1: the store and then they're activated, Yeah, there's nothing on

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Speaker 1: it like or there immediately, you know, once once you activate,

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Speaker 1: their psycloning those funds. And so yeah, there there are

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Speaker 1: a lot of potential scams with gift cards. Not to

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Speaker 1: mention just the fact that if you have a gift card,

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Speaker 1: you probably have a ton of gift cards. Most of

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Speaker 1: us have gift cards that are sitting in a drawer

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Speaker 1: that have gone unused. There's so many flaws in the

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Speaker 1: gift card system and so avoiding them, uh, most of

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Speaker 1: the time is probably a good idea for most of us,

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Speaker 1: and especially in this case. Yeah, I'm just kind of

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Speaker 1: reticent when someone comes up to me, like that anyway,

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Speaker 1: But but you're right, the only full proof way to

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Speaker 1: do it is to spend more than a hundred bucks. Um,

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Speaker 1: And even I don't know, it's just it's kind of

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Speaker 1: just like an awkward, awkward thing to to go through

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Speaker 1: as well. Well, I mean it's awkward. But I was

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Speaker 1: willing to, you know, to talk with her and be like, okay,

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Speaker 1: what's your said situation? But before I realized, I was like,

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Speaker 1: wait a minute, don't don't have a hundred bucks and

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Speaker 1: cash on me? I'm sorry. And she didn't have like

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Speaker 1: cash app or whatever she was wanting a hundred dollars

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Speaker 1: in cash. Maybe it would have been a better story

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Speaker 1: if I had gotten scammed, like if I mean, if

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Speaker 1: it had been me that had gotten taken advantage of,

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Speaker 1: I guess I guess it would have been maybe a

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Speaker 1: more fun story to share. Maybe that guy is listening

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Speaker 1: to the show and he's like, that was me. He

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Speaker 1: should have said something, But now everybody knows. But Joel,

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Speaker 1: let's share the beer that we're gonna enjoy this episode.

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Speaker 1: This is an l C drow. This is a hoppy

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Speaker 1: theater aged ale by Jester King. Looking forward to sharing

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Speaker 1: this one with you and we will give our thoughts

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Speaker 1: on this one at the end of the episode. That's right,

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Speaker 1: But for now, let's get into the topic of hand.

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Speaker 1: Let's talk about buying versus renting, especially in a market

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Speaker 1: that is like super not so and Matt, as I

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Speaker 1: were kind of thinking about this episode, it maybe think

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Speaker 1: about singing karaoke with friends, and which is just like

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Speaker 1: a really fun past time. I think, been a minute,

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Speaker 1: I haven't done karaoke, and then a few years. I mean,

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Speaker 1: I think part of that is probably co would relate

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Speaker 1: like who's going to be going to karaoke bars. I'm

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Speaker 1: sure they met your folks struggling, But to me, I

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Speaker 1: think it's a lot of fun and you know what,

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Speaker 1: I want to get back at it. Let's go to

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Speaker 1: karaokee bar soon, right, Let's do it. And so it's

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Speaker 1: one of my favorite things to do, especially with a

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Speaker 1: good bunch of friends. Um. And of course the song

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Speaker 1: I always choose to sing you know what it is?

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Speaker 1: Who do you who? The Blowfish? Of course, yes, yes,

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Speaker 1: it is a letter cry about hooting the blowfish. That

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Speaker 1: is the song that I traditionally choose. It's funny how

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Speaker 1: we revert to the impactful albums from teen years. Yes,

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Speaker 1: it's either Hoodie or it's Third Eye Blind or it's Oasis,

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Speaker 1: like those are the Those are the bands I pick

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Speaker 1: because those were six Yeah yeah, that was like seventh

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Speaker 1: grade for me. There's a lot of songs from back

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Speaker 1: in the day and they still hold sway. My personal

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Speaker 1: go to is a song by Queen. But I'm not

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Speaker 1: going to give away my my secret weapon. You'll have

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Speaker 1: to be there in person if you want to experience

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Speaker 1: every everybody's got their go to when they're singing karaoke,

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Speaker 1: and I, personally mat I like to sing it with

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Speaker 1: a lot of enthusiasm. You know, I'm not a wallflower

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Speaker 1: when I'm singing karaoke. I'm I'm going all the way.

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Speaker 1: That's what it's all about. Man, Yeah, exactly. Um, but

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Speaker 1: let's someone instead asked me to sing that same Hoodie

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Speaker 1: song in a stadium filled with strangers that I didn't

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Speaker 1: know before. Yeah, yeah, yeah, I would freak out like

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Speaker 1: that sounds like the opposite of fund whereas like karaoke

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Speaker 1: with a small group of friends sounds like a blast

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Speaker 1: and I will you know, I would even sing like

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Speaker 1: let it Go like else at the top of my lungs.

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Speaker 1: If I needed to, but in front of a crowd

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Speaker 1: of people, I don't know that. It's like the opposite effect.

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Speaker 1: And basically what that reflects is the fact that the

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Speaker 1: stakes just went up a good deal. And we would

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Speaker 1: say the same thing is true with the housing market

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Speaker 1: when we're talking about buying versus renting. As we've seen

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Speaker 1: what's happened in the housing market over the past year.

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Speaker 1: In particular, it's it's well documented that home prices have sword,

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Speaker 1: that rents are soaring right now too, And so you know,

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Speaker 1: we're going to weigh in on this episode with thoughts

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Speaker 1: about how you should proceed if you're not sure whether

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Speaker 1: you should keep renting or whether you should be taking

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Speaker 1: the plunge into homeownership. Yeah, that's right, and we've got

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Speaker 1: some some data to back up that nutstell claim that

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Speaker 1: you just made on the rising prices of homes. The

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Speaker 1: average price of a home rose fifty thousand and dollars

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Speaker 1: over the past twelve months, and so what that means

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Speaker 1: is that if you if you bought a house last year,

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Speaker 1: you're probably doing a fist pump in the air right now.

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Speaker 1: You probably have seen that number reflected in yours estimate

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Speaker 1: if you didn't, though, uh, and you want to, you're

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Speaker 1: probably feeling a bit dejected. And you might be wondering too,

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Speaker 1: whether the housing market isn't a bubble that's going to

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Speaker 1: pop soon. Well, in fact is we don't think that

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Speaker 1: is going to be the case. The demographics and the

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Speaker 1: fundamentals are really strong right now. Home Buyers are coming

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Speaker 1: in with a lot of cash to put down, Their

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Speaker 1: credit scores are great. This isn't a scenario like in

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Speaker 1: two thousand and eight, where you know, are prior to

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Speaker 1: two thousand, I guess I should say, where unqualified buyers

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Speaker 1: were getting big loans that they couldn't afford. And then

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Speaker 1: add to that the fact that inventory is at all

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Speaker 1: time lows. They're just aren't enough houses out there for

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Speaker 1: all the people that want to own one. And so,

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Speaker 1: you know, we said it before, we still believe it.

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Speaker 1: We don't think that the typical home is going to

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Speaker 1: decrease in value. And so yeah, what, whether you're looking

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Speaker 1: to buy or you just want to rent, prices are

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Speaker 1: higher than ever, that's right, Yeah, the stakes are higher.

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Speaker 1: Prices are higher, and I think it's causing maybe some

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Speaker 1: more emotion to be thrust into all of our personal

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Speaker 1: decisions when it comes to buying versus there's more money

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Speaker 1: on the line exactly, yep. And so all the housing

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Speaker 1: prices won't increase as rapidly moving forward. That's that's got

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Speaker 1: to be the case, right. I don't think they can

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Speaker 1: continue at roughly increase on average over a sustained period

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Speaker 1: of time. We're still not going to see housing prices

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Speaker 1: correct in a meaningful way in the near future, though,

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Speaker 1: And there there are so many reasons that prices are

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Speaker 1: where they are today. Insanely low interest rates are one

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Speaker 1: of those things that helped fuel even higher prices. Not

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Speaker 1: enough home builders in the aftermath of the housing crash,

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Speaker 1: a lot of those builders went bankrupt or uh just

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Speaker 1: you know, their their businesses shrunk a great deal, and

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Speaker 1: so we have a shortage of homes in this country. Also,

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Speaker 1: we have this largely millennial cohort who who now wants

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Speaker 1: to buy. All of those things are impacting the market

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Speaker 1: in a substantial way, constraining the supply and causing prices

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Speaker 1: to to shoot up at faster rates. And now inflation

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Speaker 1: and higher interest rates are adding insult to injury for

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Speaker 1: anyone who wants to buy a home. But hasn't pulled

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Speaker 1: the trigger yet, and so, yeah, interest rates are starting

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Speaker 1: to quickly take up. That means that affordability is becoming

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Speaker 1: even more of a condundrum for for a whole lot

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Speaker 1: of people when they're making this decision. Yeah, I liked

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Speaker 1: how you mentioned just the millennial generation because I mean,

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Speaker 1: bottom line, I mean, I don't know if like a

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Speaker 1: lot of folks may not know this, but like the

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Speaker 1: millennials are a larger cohort than gen xers. That's right.

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Speaker 1: That's what we're seeing is that we've got Baby boomers

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Speaker 1: who are sticking around longer, they're healthier, they're living longer,

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Speaker 1: they're staying in their homes. And then you've got the

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Speaker 1: generation ahead of us, gen Xers. They're fairly established when

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Speaker 1: it comes to home ownership and the homes that they

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Speaker 1: want to own. And then you've got the millennial generation

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Speaker 1: who is coming of home ownership age and they're looking

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Speaker 1: for a bunch of houses that don't exist. Yeah, and

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Speaker 1: Millennials were a little bit delayed when it came to

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Speaker 1: pursuing home ownership. Took us a little bit longer to

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Speaker 1: grow up a little bit later than most generations. But

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Speaker 1: I think now we're we're like a lot of millennials

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Speaker 1: are like, Okay, I'm ready to pounce, like ready to

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Speaker 1: do this adulting thing and buy a home. And now

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Speaker 1: it feels like where the homes at, like they disappeared exactly. Well,

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Speaker 1: so you were just mentioning interest rates though as well,

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Speaker 1: and how with them going up that might have an

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Speaker 1: impact on affordability, you know, like simultaneously those higher interest rates,

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Speaker 1: like they might be just what mellows out the rising

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Speaker 1: prices this year. That has yet to be determined, because

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Speaker 1: this would be a good thing, right, considering how things

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Speaker 1: have gotten out of control recently. That combination of low supply,

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Speaker 1: high demand, historically low rates, all those things together is

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Speaker 1: largely what got us to this point. But even still,

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Speaker 1: if rates go up, that doesn't necessarily make the house

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Speaker 1: that you want more affordable, because even if it does

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Speaker 1: chill demand some that we're still likely going to see

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Speaker 1: the prices continue to rise. And then of course the

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Speaker 1: rising value of owner occupied properties like that means that

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Speaker 1: rents are on the rise as well. Higher sale prices

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Speaker 1: lead to higher assessed values of rental properties, which means

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Speaker 1: landlords are having to charge more just to keep up

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Speaker 1: with their ongoing tax bills. Yeah, and let's talk about

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Speaker 1: rent prices for a second, mat because that has been

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Speaker 1: interesting phenomenon too, and it's big in particular over the

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Speaker 1: last couple of years because for a little while to

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Speaker 1: the pandemic, rents are actually falling if you remember, and

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Speaker 1: people were people were able to sign another lease and

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Speaker 1: actually a lower rate than what they'd had the previous year,

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Speaker 1: down as up up as a down. Yeah, especially as

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Speaker 1: are worth more this year than they were last year,

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Speaker 1: and especially in certain city weird like New York and

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Speaker 1: San Francisco where a lot of people just let the

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Speaker 1: city for a good period of time, those cities saw

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Speaker 1: even more dramatic decreases in rent prices, but that didn't

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Speaker 1: really last all that long in the grand scheme of things,

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Speaker 1: And now they are actually fewer vacant apartments than ever

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Speaker 1: before when you look at the statistics, So we're literally

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Speaker 1: at all time highs for occupancy rates and due to

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Speaker 1: the basic concept of supplying demand that therefore means it

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Speaker 1: rents are rising quickly. So so it's it's yeah, it's

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Speaker 1: it's these um, it's the higher taxes that that some

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Speaker 1: landlords are having to pay based on rising prices. But

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Speaker 1: then it's also the fact that, like they don't have

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Speaker 1: any other place exactly, and so they're able to charge

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Speaker 1: a whole lot more than they were able to just

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Speaker 1: twelve months ago. And so by the end of one

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Speaker 1: average rents for a two bedroom apartment we're we're up

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Speaker 1: nearly seventeen percent, and average rents were up more than

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Speaker 1: one percent for a one bedroom. A lot of cities

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Speaker 1: saw that increase by by yeah, some cities, it's crazy.

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Speaker 1: It's just funny how it's like, you want a one

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Speaker 1: bedroom apartment by yourself, you want to be by yourself

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Speaker 1: and not have to have roommates. It's gonna cost you more.

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Speaker 1: We're really gonna stick it to you, right, And so

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Speaker 1: there's these introverts out there. There's just this massive quick rebound,

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Speaker 1: and it means if your lease has come up for

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Speaker 1: renewal in the past twelve months, you're probably shocked at

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Speaker 1: the offer you got from your landlord. And so, yeah,

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Speaker 1: we have to kind of take that into consideration as

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Speaker 1: we're talking about this renting versus buying. Well, you know,

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Speaker 1: renting is getting a whole lot more expensive for everyone too.

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Speaker 1: So it does kind of feel like you're between a

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Speaker 1: rock and a hard place when you're making this decision. Yeah,

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Speaker 1: so what does this all tell us? Because the state

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Speaker 1: of the housing market, it seems to be quite frothy

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Speaker 1: right now, even though we just explained earlier how it

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Speaker 1: appears that the fundamentals are solid. But that being said,

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Speaker 1: we haven't quite seen anything like this before. How it

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Speaker 1: is that you approach the riddle of buying versus renting,

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Speaker 1: it needs to come with some new ones and some thoughtfulness.

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Speaker 1: Some out there are feeling fomo while simultaneously seeing how

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Speaker 1: much they own rent increasing substantially. And so we're gonna

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Speaker 1: do our best to help you to think through the

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Speaker 1: most important trade offs. And we're gonna get all of

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Speaker 1: that right after this break. Alright, we're back. We're talking

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Speaker 1: about buying versus renting in what is an insane housing

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Speaker 1: market right now. And Matt, I think we should start

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Speaker 1: off this part of the show, this segment by maybe

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Speaker 1: challenging some of the conventional wisdom out there. Because I

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Speaker 1: thought you're gonna bring us back with like a ludicrous

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Speaker 1: headline of the week. I was gonna bring it back

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Speaker 1: with a rake to the face, but I don't have

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Speaker 1: one on me so. But the traditional approach when it

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Speaker 1: comes to homeownership. I mean, I feel like the conventional

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Speaker 1: wisdom has been that buying a home makes sense for everyone.

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Speaker 1: And that's kind of there's like a cult of homeownership

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Speaker 1: in our country that's been pushed on people generation and

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Speaker 1: generation after generation, and so it's almost been assumed that

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Speaker 1: owning a home is this surefire path for for middle

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Speaker 1: class folks to build wealth, and so you should participate

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Speaker 1: in this sector of our economy, and you're almost seen

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Speaker 1: as a good citizen. Right, Yeah, it's your patriotic duty

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Speaker 1: to buy a home, right, And you're almost seeing this

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Speaker 1: cookie or fringe. If you didn't subscribe to this belief,

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Speaker 1: people were like, what's your deal? Like why, why? Why

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Speaker 1: don't you love America. It's kind of I feel like

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Speaker 1: the way people viewed you if you questioned the belief

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Speaker 1: that homeownership was a silver bullet for for everyone. And

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Speaker 1: like I said, it was more than a belief, even

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Speaker 1: if it was kind of almost a religion of sorts.

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Speaker 1: And and because of that, so many people just drank

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Speaker 1: the cool aid of home ownership. But millennials kind of

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Speaker 1: weren't having it, at least for a period of time,

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Speaker 1: and it is that pendulum that swung in the other

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Speaker 1: direction at least for a while, right where where millennials

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Speaker 1: were waiting longer and longer to buy a home. And

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Speaker 1: maybe it looked like a lot of people were predicting,

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Speaker 1: maybe they're going to break this trend of the of

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Speaker 1: homeownership being kind of central to the American way of life.

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Speaker 1: But like, I'm not buying a home. I'm gonna put

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Speaker 1: my dollars towards experiences, travel, things like that. And we

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Speaker 1: saw people, you know, settling in cities more and more.

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Speaker 1: But we're starting to see some of those trends go

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Speaker 1: back to normal, and even those people are saying, now

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Speaker 1: it's time to buy at home. And of course, like

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Speaker 1: you said, that is one of the reasons that we're

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Speaker 1: seeing the trend that we're currently seeing of just like

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Speaker 1: not enough homes, too many buyers, and prices going through

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Speaker 1: the roof. That's right. But as we're talking about this

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Speaker 1: from an investment standpoint, here, here's the thing we want

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Speaker 1: to make sure that we're sharing here. Buying isn't necessarily

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Speaker 1: a great investment because like anyone who's bought a home

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Speaker 1: in the past few years, like they definitely feel like

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Speaker 1: it was a great investment and and for them it's

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Speaker 1: it's time good returns. Yes, it's definitely provided that for them,

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Speaker 1: But like that doesn't mean that buying a house is

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Speaker 1: always going to be a great investment, because you know,

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Speaker 1: that home provides a whole lot of things for you know,

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Speaker 1: number one first of all being a roof over our heads.

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Speaker 1: That also allows you to put down routes in a

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Speaker 1: specific community. But those things come with a cost. And

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Speaker 1: when most of us are assessing how well we've done

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Speaker 1: with our quote unquote investment in that home, like we

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Speaker 1: we tend to only think about the increase in value.

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Speaker 1: We don't think about the money that we're constantly having

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Speaker 1: to sink into the house, whether we have to because

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Speaker 1: it's a repair or because we want to just to

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Speaker 1: make it a little bit nicer. It would be like

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Speaker 1: if you're only paying attention to the revenue portion of

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Speaker 1: a profit and law statement and you're ignoring the expenses.

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Speaker 1: It's just like, look how much we grossed, Holy cow,

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Speaker 1: so much money. But it's like, oh, no, there's a cost,

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Speaker 1: but just pay for the snacks in the break room.

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Speaker 1: And yeah, there's all of these and by computers for

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Speaker 1: the staff, like they're all of these other things, and

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Speaker 1: you're right, like those are the things that most of

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Speaker 1: us aren't considering when we're thinking about how much whether

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Speaker 1: it's been a good investment or not. For us, we

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Speaker 1: usually look at our primary house through rosy colored glasses,

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Speaker 1: even though when we're looking at just the hard numbers,

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Speaker 1: it's it's not really all that rosy when from an

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Speaker 1: investment standpoint, or it was, and oftentimes because we're not

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Speaker 1: treating our primary residences as we're not treating it like

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Speaker 1: a business. And will actually I think we'll talk a

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Speaker 1: little bit more about that later on. It's right, yeah,

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Speaker 1: we don't necessarily think you need to, but that that

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Speaker 1: is kind of at the crux of why buying a

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Speaker 1: home is not always a great investment. And so yeah,

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Speaker 1: we're gonna give a framework here of things to think

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Speaker 1: through when deciding whether renting or buying makes sense for you.

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Speaker 1: And basically it's a matrix of decision making because there's

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Speaker 1: no simple right answer. It's not necessarily yes or no.

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Speaker 1: There are too many factors to be personal factors tastically

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Speaker 1: jump into an easy recommendation like a man. If we're

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Speaker 1: on the phone with our listener right now, and they

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Speaker 1: were asking a bunch of questions. Like we we would

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Speaker 1: have a lot of things for them to think through

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Speaker 1: before we gave our advice on which one we thought

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Speaker 1: was better for them. It's it's it's not an easy

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Speaker 1: decision for anyone. And of course, since you know you're

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Speaker 1: listening to how the money like, we'll start with personal

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Speaker 1: finances and your specific money situation. Do you have any money, say,

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Speaker 1: for down payment would be probably the first question we

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Speaker 1: would ask you. And if the answer is no, then

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Speaker 1: we don't think you should be buying a home and

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Speaker 1: you don't necessarily have to have or more to put

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Speaker 1: down although that's ideal in our estimation. We I like

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Speaker 1: for you to put dunk when you were said, all

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Speaker 1: the time, but we also know that there's going to

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Speaker 1: be some situations where there are other priorities that rise

429
00:19:06,160 --> 00:19:08,639
Speaker 1: to the surface exactly exactly, and so that is a

430
00:19:08,720 --> 00:19:12,199
Speaker 1: great thing to shoot for, and that's ideal from a

431
00:19:12,240 --> 00:19:15,840
Speaker 1: personal finance perspective, but it's not something that everyone can

432
00:19:15,840 --> 00:19:17,840
Speaker 1: do all the time. And yeah, but still you have

433
00:19:17,880 --> 00:19:20,280
Speaker 1: to have done a reasonable job saving up for this

434
00:19:20,600 --> 00:19:23,760
Speaker 1: big purchase. If you're like I've got in the bank,

435
00:19:23,760 --> 00:19:26,240
Speaker 1: Can I buy a house? The answer is no, Like,

436
00:19:26,280 --> 00:19:28,320
Speaker 1: the answer is you're not ready. Probably not gonna work

437
00:19:28,359 --> 00:19:30,840
Speaker 1: out for you, exactly, especially in today's market. I won't

438
00:19:30,840 --> 00:19:33,120
Speaker 1: even cover the closing costs. But yeah, not having any

439
00:19:33,200 --> 00:19:34,960
Speaker 1: skin in the game when you buy a home, we

440
00:19:35,000 --> 00:19:39,520
Speaker 1: would say, is a recipe for financial difficulties, potentially financial disaster,

441
00:19:40,040 --> 00:19:43,000
Speaker 1: especially with a purchase that's as big as a home.

442
00:19:43,320 --> 00:19:45,280
Speaker 1: That's right. Yeah, So one of the advantages to owning

443
00:19:45,320 --> 00:19:48,560
Speaker 1: a home is that it's a forced method of savings. Uh,

444
00:19:48,600 --> 00:19:51,440
Speaker 1: And unfortunately it's the only form of investing that a

445
00:19:51,440 --> 00:19:54,280
Speaker 1: lot of folks are doing. This is evidenced by the

446
00:19:54,320 --> 00:19:57,960
Speaker 1: fact that the bottom of Americans have the overwhelming majority

447
00:19:57,960 --> 00:20:00,880
Speaker 1: of their wealth tied to their housing. But here's the thing.

448
00:20:00,880 --> 00:20:04,280
Speaker 1: Your primary house, it should not be your biggest investment.

449
00:20:04,760 --> 00:20:06,440
Speaker 1: Like I don't I don't mean that you shouldn't love

450
00:20:06,640 --> 00:20:09,040
Speaker 1: your your home, but you should have more money in

451
00:20:09,040 --> 00:20:12,960
Speaker 1: retirement accounts than in primary home equity in as long

452
00:20:13,000 --> 00:20:16,399
Speaker 1: as you are investing regularly in your retirement accounts. From

453
00:20:16,440 --> 00:20:18,720
Speaker 1: a wealth building standpoint, like, there's no real necessity to

454
00:20:18,720 --> 00:20:21,040
Speaker 1: actually own a home, so much of the decision should

455
00:20:21,040 --> 00:20:24,200
Speaker 1: come down to other factors instead of just the desire

456
00:20:24,240 --> 00:20:26,879
Speaker 1: to start, you know, quote unquote building equity. Yeah. I

457
00:20:26,920 --> 00:20:28,800
Speaker 1: like what you said there, Matt, that it's it's not

458
00:20:28,920 --> 00:20:32,680
Speaker 1: a necessity, right, And I think sometimes people assume that

459
00:20:32,840 --> 00:20:34,560
Speaker 1: maybe that's part of the cooler that we've drunk, is

460
00:20:34,560 --> 00:20:37,600
Speaker 1: that homeownership is a necessity to wealth building, and no,

461
00:20:37,760 --> 00:20:40,560
Speaker 1: it's not. And actually, in many times it's a hindrance

462
00:20:40,600 --> 00:20:43,280
Speaker 1: to people when it comes to building their wealth. Obviously,

463
00:20:43,320 --> 00:20:47,320
Speaker 1: we've been in a cycle that is abnormal over the past,

464
00:20:47,640 --> 00:20:50,320
Speaker 1: like you know, eighteen to twenty four months when it

465
00:20:50,320 --> 00:20:53,240
Speaker 1: comes to home price increases, and really we we've had

466
00:20:53,280 --> 00:20:56,760
Speaker 1: we've seen outsized gains and home prices ever since, like

467
00:20:56,880 --> 00:20:59,360
Speaker 1: as the the end of that Great recession, as home

468
00:20:59,359 --> 00:21:01,720
Speaker 1: prices were brings sense what the bottom of the market

469
00:21:01,760 --> 00:21:05,080
Speaker 1: in two thousand ten, home prices have appreciated substantially. But

470
00:21:05,200 --> 00:21:09,040
Speaker 1: that doesn't mean we shouldn't take that most recent data

471
00:21:09,080 --> 00:21:11,680
Speaker 1: and extrapolated and say that buying a home makes sense

472
00:21:11,680 --> 00:21:14,520
Speaker 1: for everyone at all times, because it doesn't. And yeah,

473
00:21:14,520 --> 00:21:17,439
Speaker 1: another similar consideration is the fact that your mortgage is

474
00:21:17,480 --> 00:21:20,520
Speaker 1: fixed And we like to recommend fixed rate mortgages because

475
00:21:20,560 --> 00:21:23,280
Speaker 1: over time, that mortgage begins to look better and better

476
00:21:23,880 --> 00:21:26,600
Speaker 1: as rents are going up around you. Your mortgage only

477
00:21:26,640 --> 00:21:29,240
Speaker 1: goes up based on the amount you pay in insurance

478
00:21:29,240 --> 00:21:32,200
Speaker 1: and taxes. And so let's say your mortgage day one

479
00:21:32,480 --> 00:21:36,680
Speaker 1: is fourteen a month, while three years down the line,

480
00:21:36,840 --> 00:21:40,760
Speaker 1: your mortgage is probably gonna be like two because just

481
00:21:40,960 --> 00:21:43,320
Speaker 1: the taxes and insurance is are the only things that

482
00:21:43,359 --> 00:21:46,880
Speaker 1: are moving the needle on what you're paying. And so, yeah,

483
00:21:47,040 --> 00:21:48,640
Speaker 1: it has nothing to do with interest rates or what's

484
00:21:48,640 --> 00:21:51,880
Speaker 1: happening with inflation. You you're basically insulated from rising prices,

485
00:21:52,000 --> 00:21:54,359
Speaker 1: and that mortgaged home with a fixed rate becomes this

486
00:21:54,440 --> 00:21:57,360
Speaker 1: hedge against inflation too, And so that is definitely one

487
00:21:57,400 --> 00:22:00,000
Speaker 1: thing to consider. It can be helpful from that standpoint.

488
00:22:00,040 --> 00:22:02,560
Speaker 1: It where especially now people are feeling their rents getting

489
00:22:02,600 --> 00:22:05,880
Speaker 1: jacked up, and someone who has a fixed rate mortgage

490
00:22:05,880 --> 00:22:08,840
Speaker 1: on a primary home is sitting pretty from from at

491
00:22:08,880 --> 00:22:11,160
Speaker 1: least as standpoint. Yeah, not only hedge, but I mean

492
00:22:11,240 --> 00:22:14,320
Speaker 1: it almost at times, I'm sure, feels like a deflationary

493
00:22:14,480 --> 00:22:16,880
Speaker 1: debt right because it continues to say the same while

494
00:22:16,880 --> 00:22:18,919
Speaker 1: everything else goes up in price. It almost feels like

495
00:22:18,920 --> 00:22:21,760
Speaker 1: it's getting more affordable to live in the house, especially

496
00:22:22,200 --> 00:22:25,080
Speaker 1: that you're staying in. Don't let that reality get you

497
00:22:25,119 --> 00:22:27,600
Speaker 1: to buy more house than you should. And that's because

498
00:22:27,640 --> 00:22:30,360
Speaker 1: you don't want to be house poor. Uh that if

499
00:22:30,359 --> 00:22:31,959
Speaker 1: you were to put yourself in that position, is going

500
00:22:31,960 --> 00:22:34,840
Speaker 1: to be really stressful. If that monthly payment is now

501
00:22:34,880 --> 00:22:37,080
Speaker 1: at the top tier of what you can afford, it's

502
00:22:37,119 --> 00:22:40,360
Speaker 1: better to either just save up for longer. That way

503
00:22:40,359 --> 00:22:42,520
Speaker 1: you've got more money to put down so your monthly

504
00:22:42,520 --> 00:22:45,719
Speaker 1: payment is slightly less, or buy less house so that

505
00:22:45,800 --> 00:22:47,840
Speaker 1: you are able to feel a little more comfortable with

506
00:22:47,840 --> 00:22:50,440
Speaker 1: your budget every single month. Yeah, and Matt, what people

507
00:22:50,440 --> 00:22:53,440
Speaker 1: aren't taking into consideration when they buy a house it's

508
00:22:53,480 --> 00:22:56,159
Speaker 1: either at the top of their budget or almost exceeds

509
00:22:56,160 --> 00:22:59,560
Speaker 1: their budget. It feels unaffordable, but it's the home of

510
00:22:59,600 --> 00:23:02,600
Speaker 1: their drinks. Is what happens if your circumstances change, what

511
00:23:02,640 --> 00:23:06,360
Speaker 1: happens if your job no longer needs your services. And

512
00:23:06,800 --> 00:23:09,919
Speaker 1: our family found ourselves in that exact circumstance when I

513
00:23:09,960 --> 00:23:12,440
Speaker 1: was a kid, where my dad someone had given him

514
00:23:12,440 --> 00:23:15,320
Speaker 1: the advice of buying a home kind of at the

515
00:23:15,359 --> 00:23:17,720
Speaker 1: top of his price range. Because of course, dude, here

516
00:23:17,720 --> 00:23:20,639
Speaker 1: in line for a promotion and pretty soon that's gonna

517
00:23:20,760 --> 00:23:22,600
Speaker 1: look like a drop in the bucket in your budget

518
00:23:22,720 --> 00:23:24,439
Speaker 1: as you move up the ranks in this company. And

519
00:23:24,520 --> 00:23:27,560
Speaker 1: so he was like, Okay, I'll do it. But soon

520
00:23:27,600 --> 00:23:30,480
Speaker 1: after his company got bought up by another company and

521
00:23:31,280 --> 00:23:33,280
Speaker 1: he was no longer employed there, and so it was

522
00:23:33,280 --> 00:23:36,600
Speaker 1: one of those things where now, um he he already

523
00:23:36,760 --> 00:23:39,040
Speaker 1: has a house that's essentially at the top of the budget,

524
00:23:39,080 --> 00:23:40,920
Speaker 1: and now the budget is completely blown out of the water.

525
00:23:41,280 --> 00:23:44,360
Speaker 1: And that happens to that happens to people every day

526
00:23:44,400 --> 00:23:47,920
Speaker 1: where their job circumstance changes in a negative way, where

527
00:23:47,920 --> 00:23:51,560
Speaker 1: the economy experiences a downturn, and that creates an economic

528
00:23:51,600 --> 00:23:54,280
Speaker 1: downturn in their family finances, and that makes it so

529
00:23:54,359 --> 00:23:56,640
Speaker 1: much harder than to afford that mortgage. And so yeah,

530
00:23:56,720 --> 00:23:59,040
Speaker 1: you just it's important to be careful and to buy

531
00:23:59,119 --> 00:24:01,360
Speaker 1: buy it off less than you can chew. And that's

532
00:24:01,400 --> 00:24:04,960
Speaker 1: particularly true, I think when we're talking about houses. That's right. Yeah,

533
00:24:04,960 --> 00:24:06,680
Speaker 1: you don't want to put yourself in a situation where

534
00:24:06,680 --> 00:24:11,320
Speaker 1: you are counting on everything going exactly as planned, uh,

535
00:24:11,400 --> 00:24:13,640
Speaker 1: your timeline jel. That's something else we want to share

536
00:24:13,640 --> 00:24:16,959
Speaker 1: with folks too, because that's one of the most important considerations.

537
00:24:17,480 --> 00:24:19,760
Speaker 1: If you only plan to stay in at home for

538
00:24:19,760 --> 00:24:23,280
Speaker 1: for like a mere eighteen months, there's a massive likelihood

539
00:24:23,320 --> 00:24:26,040
Speaker 1: that you'll be underwater when you go to sell. This is,

540
00:24:26,160 --> 00:24:28,439
Speaker 1: of course, assuming that home prices don't continue to climb

541
00:24:28,480 --> 00:24:33,080
Speaker 1: at that every single year, right, which is unlikely. But

542
00:24:33,080 --> 00:24:36,119
Speaker 1: the bottom line, there's volatility in all markets, definitely. You

543
00:24:36,119 --> 00:24:38,760
Speaker 1: see that when it comes to investing in the stock market,

544
00:24:38,760 --> 00:24:41,280
Speaker 1: but even when it comes to the housing market as well. UH.

545
00:24:41,280 --> 00:24:43,920
Speaker 1: And so anytime you're able to stretch out your timeline,

546
00:24:43,960 --> 00:24:47,320
Speaker 1: that mitigates risk and it reduces your exposure to that volatility.

547
00:24:47,600 --> 00:24:49,840
Speaker 1: Another reason why your time frame is so important, too,

548
00:24:49,840 --> 00:24:53,199
Speaker 1: is because of the transaction costs involved with buying and selling.

549
00:24:53,480 --> 00:24:54,840
Speaker 1: And again, you know the same might be true of

550
00:24:54,880 --> 00:24:57,840
Speaker 1: your index funds within the market, but at least there

551
00:24:57,880 --> 00:25:00,800
Speaker 1: you know, there's none of the friction involved that takes

552
00:25:00,800 --> 00:25:05,320
Speaker 1: a chunk off the top closing costs. Realtor vies they

553
00:25:05,320 --> 00:25:07,919
Speaker 1: will eat you alive in the scenario. And so that's

554
00:25:07,920 --> 00:25:12,000
Speaker 1: why we always recommend a minimum ownership timeline of five years. UH.

555
00:25:12,040 --> 00:25:13,919
Speaker 1: If you were to stay even longer than that, like

556
00:25:14,000 --> 00:25:16,679
Speaker 1: seven to ten years, that would be even better. You

557
00:25:16,680 --> 00:25:18,960
Speaker 1: want to be able to spread some of these expenses

558
00:25:19,000 --> 00:25:22,000
Speaker 1: in these costs over a longer period of time. Yeah,

559
00:25:22,040 --> 00:25:24,920
Speaker 1: I'm just thinking of like a made up example. Let's say, uh,

560
00:25:25,200 --> 00:25:28,119
Speaker 1: every apple you purchased cost a dollar a pound, but

561
00:25:28,160 --> 00:25:29,879
Speaker 1: on top of it, you had to pay a dollar

562
00:25:30,320 --> 00:25:33,000
Speaker 1: every time you purchased any quantity of apples. You probably

563
00:25:33,000 --> 00:25:35,000
Speaker 1: wouldn't buy one apple at a time. You would probably

564
00:25:35,000 --> 00:25:37,080
Speaker 1: buy a whole bunch of apples and then try to

565
00:25:37,080 --> 00:25:39,920
Speaker 1: eat them throughout that week, a whole peck of them.

566
00:25:39,960 --> 00:25:41,159
Speaker 1: It might be too many. I don't know how much

567
00:25:41,200 --> 00:25:43,080
Speaker 1: of apples. I think it is the right term, but

568
00:25:43,119 --> 00:25:46,600
Speaker 1: I'm not a bushel. Is a bushel more than a pack?

569
00:25:46,680 --> 00:25:48,040
Speaker 1: I don't know. I think it is. I don't know

570
00:25:48,160 --> 00:25:50,280
Speaker 1: all these grarian terms. I'm kind of rusty in my

571
00:25:50,440 --> 00:25:54,160
Speaker 1: window berry. Well, I think the same is true kind

572
00:25:54,160 --> 00:25:56,320
Speaker 1: of for real estate, right. It's it's that it's that

573
00:25:56,400 --> 00:25:59,800
Speaker 1: concept of all those transaction costs make it prohibitive to

574
00:25:59,800 --> 00:26:01,760
Speaker 1: buy and sell. They almost kind of create did they

575
00:26:01,800 --> 00:26:04,080
Speaker 1: come with the gears, And it's gonna cost you a

576
00:26:04,119 --> 00:26:05,679
Speaker 1: whole lot of money if you don't hold onto that

577
00:26:05,720 --> 00:26:07,840
Speaker 1: long enough and you don't necessarily need to live in

578
00:26:07,880 --> 00:26:09,680
Speaker 1: it for all those years. As long as you're comfortable

579
00:26:09,720 --> 00:26:11,760
Speaker 1: in that house is actually gonna make sense as a

580
00:26:11,800 --> 00:26:13,800
Speaker 1: rental property. As long as you're holding onto it and

581
00:26:13,840 --> 00:26:16,159
Speaker 1: not selling it, then those costs aren't gonna eat you

582
00:26:16,200 --> 00:26:18,480
Speaker 1: alive in the same way. But those things have to

583
00:26:18,520 --> 00:26:21,560
Speaker 1: be taken into consideration because they represent a substantial cost

584
00:26:21,800 --> 00:26:25,680
Speaker 1: to you as someone buying a home. That is right,

585
00:26:25,720 --> 00:26:28,360
Speaker 1: But even still, it's more than just these monetary uh

586
00:26:28,400 --> 00:26:31,640
Speaker 1: and time frame considerations that you need to examine before

587
00:26:31,680 --> 00:26:35,679
Speaker 1: you make a decision. There are other factors. Specifically, there

588
00:26:35,680 --> 00:26:37,560
Speaker 1: are some different lifestyle factors that you need to keep

589
00:26:37,600 --> 00:26:40,680
Speaker 1: in mind, and so we will discuss those considerations right

590
00:26:40,680 --> 00:26:51,760
Speaker 1: after this break all we're back in of course, not

591
00:26:51,960 --> 00:26:54,879
Speaker 1: we can't cover all the nerdy financial stuff and and

592
00:26:54,920 --> 00:26:57,920
Speaker 1: of course you have to take those We're gonna lead

593
00:26:57,960 --> 00:27:00,119
Speaker 1: with the dollars and cents, yes exactly, and we'll to

594
00:27:00,200 --> 00:27:02,040
Speaker 1: the It's like this is like more of the fun stuff,

595
00:27:02,280 --> 00:27:04,399
Speaker 1: like the the other This is like the dream. Like

596
00:27:04,400 --> 00:27:06,640
Speaker 1: when you're dreaming about buying a new home or whether

597
00:27:06,640 --> 00:27:09,160
Speaker 1: you should rent or by most people probably are thinking

598
00:27:09,200 --> 00:27:11,560
Speaker 1: about like what is how is this going to affect

599
00:27:11,600 --> 00:27:13,400
Speaker 1: my bottom line, they're thinking about all the different ways

600
00:27:13,400 --> 00:27:15,600
Speaker 1: that it's going to be fun, right, like actual dreaming

601
00:27:15,640 --> 00:27:18,000
Speaker 1: good for their family, or the ways they want to decorate,

602
00:27:18,160 --> 00:27:21,520
Speaker 1: or the ways they plan to like uh, integrate their

603
00:27:21,520 --> 00:27:23,600
Speaker 1: lives into the community around them. Those are the kind

604
00:27:23,600 --> 00:27:25,520
Speaker 1: of things you're thinking about when you're buying home. But

605
00:27:25,720 --> 00:27:27,200
Speaker 1: we're here to tell you have to think about those

606
00:27:27,200 --> 00:27:28,879
Speaker 1: other things. You have to think about saving, and you

607
00:27:28,880 --> 00:27:30,680
Speaker 1: have to think about the transaction costs and how long

608
00:27:30,680 --> 00:27:34,120
Speaker 1: you're actually gonna stay there, because those are a massively

609
00:27:34,160 --> 00:27:36,960
Speaker 1: influential into making a wise decision. That's like your that's

610
00:27:37,000 --> 00:27:39,359
Speaker 1: like your vegetables and your meat, Like you want to

611
00:27:39,400 --> 00:27:42,080
Speaker 1: make sure that you get those important things first. And

612
00:27:42,080 --> 00:27:44,160
Speaker 1: then it's like, okay, no, let's like let's talk about

613
00:27:44,160 --> 00:27:46,360
Speaker 1: the starchy side. Let's talk about the bread, the noodles,

614
00:27:46,600 --> 00:27:48,320
Speaker 1: maybe a little bit of fruit, some dessert, that's what

615
00:27:48,320 --> 00:27:51,040
Speaker 1: we're talking about here. Yeah. Well, and I think actually

616
00:27:51,880 --> 00:27:54,239
Speaker 1: some of these lifestyle decisions are actually more impactful than

617
00:27:54,280 --> 00:27:56,400
Speaker 1: just than just the dessert part of your meal, because

618
00:27:56,600 --> 00:27:58,480
Speaker 1: you have that's. Yeah, you do have to think about

619
00:27:58,560 --> 00:28:01,680
Speaker 1: we'll stop it at fruit. You don't want to get scurvy, right,

620
00:28:01,760 --> 00:28:04,920
Speaker 1: exactly exactly. So, yeah, when you have to think about

621
00:28:04,920 --> 00:28:06,520
Speaker 1: what you want your life to look like, and that

622
00:28:06,600 --> 00:28:09,399
Speaker 1: will impact how long you plan on staying in the house. Right,

623
00:28:09,480 --> 00:28:11,359
Speaker 1: if it's a house in a community you feel like

624
00:28:11,359 --> 00:28:13,960
Speaker 1: you can set roots down in for a long time

625
00:28:14,320 --> 00:28:16,399
Speaker 1: then and it's not just like a fly by night

626
00:28:16,440 --> 00:28:20,199
Speaker 1: emotional purchase, then that bears weight in the decision. And

627
00:28:20,240 --> 00:28:22,240
Speaker 1: so yeah, these are the kind of crucial questions you

628
00:28:22,240 --> 00:28:24,480
Speaker 1: need to ask before you dive in head first. You

629
00:28:24,520 --> 00:28:26,439
Speaker 1: want to you don't want to think too much about

630
00:28:26,480 --> 00:28:29,680
Speaker 1: your return on investment when you're choosing to live in

631
00:28:29,720 --> 00:28:32,240
Speaker 1: the city or the country, because some things come down

632
00:28:32,240 --> 00:28:34,919
Speaker 1: to personal preference and you're not necessarily saying, well, the

633
00:28:34,920 --> 00:28:37,400
Speaker 1: prices in the city, those home prices are gonna uh,

634
00:28:37,600 --> 00:28:39,800
Speaker 1: they're gonna net me more money over the next ten years.

635
00:28:39,880 --> 00:28:41,280
Speaker 1: If you don't want to be a city dweller, it

636
00:28:41,360 --> 00:28:44,640
Speaker 1: doesn't matter, um. And so yeah, some some folks are

637
00:28:44,640 --> 00:28:47,240
Speaker 1: just more happy to be renters than their entire lives too.

638
00:28:47,400 --> 00:28:49,880
Speaker 1: There's nothing wrong with that. It's a personal choice, and

639
00:28:49,920 --> 00:28:51,480
Speaker 1: we want you to take that to heart, Like we

640
00:28:51,520 --> 00:28:55,280
Speaker 1: don't want you to do something just because of the financials.

641
00:28:55,400 --> 00:28:58,080
Speaker 1: We want you to take strong consideration into what you

642
00:28:58,120 --> 00:29:01,080
Speaker 1: want your life to look like, because that's massively important

643
00:29:01,120 --> 00:29:02,800
Speaker 1: and and that's why we try to take a balance

644
00:29:02,920 --> 00:29:05,200
Speaker 1: few towards this topic. We want you to build wealth

645
00:29:05,200 --> 00:29:08,120
Speaker 1: and reach financial independence, whether you decide to buy a

646
00:29:08,160 --> 00:29:11,720
Speaker 1: home or not. And we think it's extremely possible whether

647
00:29:11,760 --> 00:29:13,840
Speaker 1: you decide to buy a home or not. That's true. Yeah,

648
00:29:14,120 --> 00:29:15,719
Speaker 1: So it kind of makes me think about like if

649
00:29:15,720 --> 00:29:17,600
Speaker 1: you're dating, right, if you're dating and you're trying to

650
00:29:17,600 --> 00:29:18,920
Speaker 1: find somebody that you want to spend the rest of

651
00:29:18,920 --> 00:29:22,000
Speaker 1: your life with, well, it's important to know if she

652
00:29:22,200 --> 00:29:24,240
Speaker 1: is a doctor and she's going to make bank over

653
00:29:24,640 --> 00:29:27,000
Speaker 1: over the next you know, the rest of her lifetime whatever,

654
00:29:27,400 --> 00:29:29,520
Speaker 1: or if you're dating a guy and he has like

655
00:29:29,560 --> 00:29:32,240
Speaker 1: two dollars in student loans, like, these are things that

656
00:29:32,280 --> 00:29:34,760
Speaker 1: are worth knowing, But you don't make the decision because

657
00:29:34,800 --> 00:29:37,440
Speaker 1: of those things you should be making. I guess you could,

658
00:29:37,760 --> 00:29:39,520
Speaker 1: but that feels a little I don't know, it feels

659
00:29:39,480 --> 00:29:41,479
Speaker 1: a little skazy, feels a little dirty if that is

660
00:29:41,600 --> 00:29:44,120
Speaker 1: what is directing your you know, you choosing to date

661
00:29:44,120 --> 00:29:49,640
Speaker 1: somebody called a gold digger right exactly? Um, it's I

662
00:29:49,640 --> 00:29:52,800
Speaker 1: don't know, maybe maybe the dating relationship isn't as accurate

663
00:29:52,840 --> 00:29:55,720
Speaker 1: as like, if you're considering changing your career, it feels

664
00:29:55,720 --> 00:29:58,600
Speaker 1: a little less permanent. Folks change their jobs, They change

665
00:29:58,640 --> 00:30:01,880
Speaker 1: their careers fairly often. In as you're considering a career change,

666
00:30:01,880 --> 00:30:04,000
Speaker 1: it is worth thinking through your salary what you're going

667
00:30:04,080 --> 00:30:06,400
Speaker 1: to be making. But if that is all that you're

668
00:30:06,440 --> 00:30:09,320
Speaker 1: basing your decision on, there's a good chance you might

669
00:30:09,400 --> 00:30:12,080
Speaker 1: be making good money, but you're miserable going to work

670
00:30:12,160 --> 00:30:14,480
Speaker 1: day after day because it's not something that truly resonates

671
00:30:14,480 --> 00:30:16,880
Speaker 1: with your soul. You don't see how you're actually making

672
00:30:17,360 --> 00:30:19,160
Speaker 1: a positive impact on the world. You don't see how

673
00:30:19,200 --> 00:30:21,240
Speaker 1: you're able to serve other people or make their lives better.

674
00:30:21,480 --> 00:30:23,160
Speaker 1: You've just found an industry where you are able to

675
00:30:23,240 --> 00:30:25,120
Speaker 1: make a ton of money. That is not the only

676
00:30:25,160 --> 00:30:28,000
Speaker 1: consideration that you have to keep in mind. And so

677
00:30:28,040 --> 00:30:30,120
Speaker 1: I think it's similar with housing. We have to consider

678
00:30:30,160 --> 00:30:32,120
Speaker 1: some of the other implications. We can't just look at

679
00:30:32,160 --> 00:30:35,000
Speaker 1: the bottom line. Yeah, I completely agree that there are

680
00:30:35,040 --> 00:30:37,760
Speaker 1: a lot of factors that go beyond just money, and

681
00:30:37,880 --> 00:30:41,440
Speaker 1: even those lifestyle factors influence our finances. And so, uh,

682
00:30:41,560 --> 00:30:44,000
Speaker 1: let's talk about renting for a second map, because renting

683
00:30:44,080 --> 00:30:47,360
Speaker 1: has some real perks, and it's important to note the

684
00:30:47,360 --> 00:30:50,920
Speaker 1: benefits of renting because I think sometimes there's another common

685
00:30:50,960 --> 00:30:54,480
Speaker 1: misnomer that renting is throwing away money gets the shaft. Yeah,

686
00:30:54,560 --> 00:30:56,840
Speaker 1: and so people just automatically dismiss it and they say,

687
00:30:56,840 --> 00:30:58,760
Speaker 1: if you want to be live a sound financial life,

688
00:30:59,040 --> 00:31:02,360
Speaker 1: then you shouldn't be renting. That's that's a move for dummies.

689
00:31:02,480 --> 00:31:05,080
Speaker 1: But that is not true. And so let's mention some

690
00:31:05,080 --> 00:31:07,000
Speaker 1: of those parks. One, you don't have to fix anything

691
00:31:07,520 --> 00:31:11,040
Speaker 1: that is a huge park, especially if you are like

692
00:31:11,120 --> 00:31:13,360
Speaker 1: super into your career and you are moving up the

693
00:31:13,440 --> 00:31:17,239
Speaker 1: ladder and you are making good money, and you prioritize that.

694
00:31:17,440 --> 00:31:21,880
Speaker 1: I think homeownership has not uh side hustle type hours,

695
00:31:21,920 --> 00:31:25,400
Speaker 1: but it does involve a maintenance and and it demands

696
00:31:25,440 --> 00:31:27,240
Speaker 1: a certain amount of your attention. It's got like this

697
00:31:27,320 --> 00:31:31,120
Speaker 1: baseline responsibility associated with it. Yep. But if you're renting,

698
00:31:31,440 --> 00:31:34,160
Speaker 1: not so much. Just piece out, Yeah, just call the

699
00:31:34,240 --> 00:31:36,120
Speaker 1: landlord when the water water heater goes out or if

700
00:31:36,120 --> 00:31:38,200
Speaker 1: there's a leak in the roof. Those are the headaches

701
00:31:38,200 --> 00:31:40,440
Speaker 1: that you don't have to worry about. And so, yeah,

702
00:31:40,440 --> 00:31:43,160
Speaker 1: you might not have the capacity to deal with the

703
00:31:43,240 --> 00:31:46,040
Speaker 1: issues that arise with with home ownership, and that is

704
00:31:46,200 --> 00:31:49,200
Speaker 1: a great reason to to rent. And and generally speaking,

705
00:31:49,400 --> 00:31:52,360
Speaker 1: renting gives you more options to like, it's more flexible

706
00:31:52,560 --> 00:31:54,600
Speaker 1: and so yeah, it's it's short term. You can always

707
00:31:54,600 --> 00:31:56,640
Speaker 1: pick up and move closer to family or friends if

708
00:31:56,640 --> 00:31:59,959
Speaker 1: you want to, or yeah, if into something larger or smaller,

709
00:32:00,000 --> 00:32:01,200
Speaker 1: if you get a big dog, or if your kids

710
00:32:01,200 --> 00:32:04,360
Speaker 1: go off to college. One specific house doesn't necessarily meet

711
00:32:04,400 --> 00:32:06,760
Speaker 1: your needs for on a thirty year timeline, which is

712
00:32:06,840 --> 00:32:08,800
Speaker 1: usually how long you're taking out a mortgage, and so

713
00:32:09,040 --> 00:32:11,440
Speaker 1: it might make sense to rent instead and then shift

714
00:32:11,560 --> 00:32:14,440
Speaker 1: as your life shifts and shift there's your job shifts,

715
00:32:14,480 --> 00:32:18,160
Speaker 1: Like there's there's no reason that people should necessarily buy

716
00:32:18,160 --> 00:32:20,400
Speaker 1: a home, and in fact, renting can be a better

717
00:32:20,480 --> 00:32:22,880
Speaker 1: move lifestyle wives for for a lot of folks. Yeah,

718
00:32:22,920 --> 00:32:25,600
Speaker 1: and you know, we already talked about financial considerations and

719
00:32:25,640 --> 00:32:27,240
Speaker 1: how like you need to have a chunk of money

720
00:32:27,280 --> 00:32:29,480
Speaker 1: for a down payment, but in many parts of the country,

721
00:32:29,560 --> 00:32:31,360
Speaker 1: renting is going to be cheaper than owning on a

722
00:32:31,400 --> 00:32:34,320
Speaker 1: monthly basis, not just upfront. Uh. In fact, there is

723
00:32:34,320 --> 00:32:36,760
Speaker 1: a lending Tree study and they found that on average,

724
00:32:36,760 --> 00:32:40,280
Speaker 1: renters paid six d and six dollars less than homeowners

725
00:32:40,320 --> 00:32:44,160
Speaker 1: with a mortgage each month on housing costs, which also

726
00:32:44,200 --> 00:32:48,160
Speaker 1: included utilities, taxes, fees. Although that being said, I'm going

727
00:32:48,200 --> 00:32:50,360
Speaker 1: to point to another another report to you because this

728
00:32:50,360 --> 00:32:53,440
Speaker 1: one is slightly more recent, and it found that it's

729
00:32:53,440 --> 00:32:56,720
Speaker 1: actually cheaper to own than rent in fifty eight percent

730
00:32:56,760 --> 00:32:59,920
Speaker 1: of the country. And so what you're hearing is conflict.

731
00:33:00,480 --> 00:33:02,440
Speaker 1: Uh if it makes you come out of my mouth.

732
00:33:02,960 --> 00:33:06,680
Speaker 1: But the bottom line is that these numbers vary significantly

733
00:33:06,720 --> 00:33:09,480
Speaker 1: from city to city. So much depends on where it

734
00:33:09,600 --> 00:33:12,200
Speaker 1: is that you live, and so you've got to take

735
00:33:12,240 --> 00:33:14,760
Speaker 1: all that into account, and luckily there are calculators that

736
00:33:14,800 --> 00:33:18,480
Speaker 1: can help you with your specific location. We will make

737
00:33:18,520 --> 00:33:20,320
Speaker 1: sure to link to those different calculators in our show

738
00:33:20,360 --> 00:33:23,320
Speaker 1: notes for this episode. Yeah, real estate is local, and

739
00:33:23,320 --> 00:33:25,480
Speaker 1: so you can't just extrapolate because, for instance, we talked

740
00:33:25,480 --> 00:33:28,800
Speaker 1: about average home price increase over the past twelve months

741
00:33:28,800 --> 00:33:32,720
Speaker 1: has been something like but if you're living in Idaho,

742
00:33:33,000 --> 00:33:34,320
Speaker 1: it's been a heck of a lot more than that.

743
00:33:34,520 --> 00:33:36,040
Speaker 1: And then there are other parts of the country where

744
00:33:36,040 --> 00:33:39,040
Speaker 1: you have seen less significant growth, and so so much

745
00:33:39,120 --> 00:33:42,560
Speaker 1: of that depends on the trends that are happening in

746
00:33:42,560 --> 00:33:45,360
Speaker 1: the country where people are moving to and real estate

747
00:33:45,520 --> 00:33:47,680
Speaker 1: is local, maybe you've got to make sure to take

748
00:33:47,680 --> 00:33:50,920
Speaker 1: that into account. And renting is almost always the best

749
00:33:50,920 --> 00:33:53,160
Speaker 1: course of action, Matt, we would say, when somebody moves

750
00:33:53,200 --> 00:33:55,280
Speaker 1: to a new city, right, and so yeah, if you're

751
00:33:55,400 --> 00:33:57,600
Speaker 1: you're someone who likes to move around a lot, renting

752
00:33:57,720 --> 00:33:59,920
Speaker 1: is is clearly the way to go in our opinion.

753
00:34:00,240 --> 00:34:02,400
Speaker 1: But even if you're certain you're going to stick around

754
00:34:02,400 --> 00:34:03,680
Speaker 1: in a new city, you've got a new job and

755
00:34:03,720 --> 00:34:05,600
Speaker 1: you're like, this is the job, is my dream job,

756
00:34:05,600 --> 00:34:08,319
Speaker 1: I'm gonna be there for ten plus years, Well, it's

757
00:34:08,320 --> 00:34:10,600
Speaker 1: still best to rent for that first year. So you

758
00:34:10,640 --> 00:34:12,480
Speaker 1: get the lay of the land and you kind of

759
00:34:12,480 --> 00:34:16,400
Speaker 1: find what neighborhoods you gravitate towards, which um, which places

760
00:34:16,680 --> 00:34:19,040
Speaker 1: you end up hanging out the most, where where your

761
00:34:19,040 --> 00:34:22,320
Speaker 1: friend group and is largely based. And so yeah, we

762
00:34:22,360 --> 00:34:25,400
Speaker 1: would say find that out before you make this knee

763
00:34:25,440 --> 00:34:27,920
Speaker 1: jerk decision to buy a house, because it's a permanent

764
00:34:27,920 --> 00:34:30,880
Speaker 1: decision and and largely because of those transaction costs we

765
00:34:30,920 --> 00:34:33,439
Speaker 1: discussed earlier, it's important to get it right the first time.

766
00:34:33,520 --> 00:34:34,640
Speaker 1: And if you end up buying in a part of

767
00:34:34,640 --> 00:34:37,240
Speaker 1: town and you're like, this is this is just not ideal,

768
00:34:37,320 --> 00:34:39,799
Speaker 1: and the traffic actually really stinks on the way home,

769
00:34:40,120 --> 00:34:42,080
Speaker 1: and I wish I lived a little bit closer, or

770
00:34:42,200 --> 00:34:44,640
Speaker 1: I wish I lived in this more rural spot that

771
00:34:44,680 --> 00:34:47,319
Speaker 1: actually fits better for like what I like to do

772
00:34:47,400 --> 00:34:50,120
Speaker 1: on the weekends. That's why renting, I think, can be

773
00:34:50,160 --> 00:34:52,759
Speaker 1: so powerful when you're first moving to a place, so

774
00:34:52,840 --> 00:34:55,520
Speaker 1: you're not just based basing it on blog posts and

775
00:34:55,719 --> 00:34:57,880
Speaker 1: internet uh and stuff you're reading on the internet. Like that,

776
00:34:57,920 --> 00:35:00,359
Speaker 1: there's that real life experience you want to gather. That's true.

777
00:35:00,400 --> 00:35:01,799
Speaker 1: But on the other side of the coin, right, like

778
00:35:01,840 --> 00:35:04,160
Speaker 1: we've got the buying side here. Uh. And if you

779
00:35:04,320 --> 00:35:05,839
Speaker 1: find the place that you want to be for years

780
00:35:05,840 --> 00:35:09,719
Speaker 1: on end, like you're getting something intangible but also very important.

781
00:35:09,800 --> 00:35:12,920
Speaker 1: If you end up purchasing, there's that level of security

782
00:35:12,960 --> 00:35:15,560
Speaker 1: that comes with a home purchase because you can't be

783
00:35:15,600 --> 00:35:18,280
Speaker 1: forced to move just because your landlord says it's time

784
00:35:18,320 --> 00:35:21,799
Speaker 1: to sell. You have the ability to use whatever color

785
00:35:21,840 --> 00:35:24,200
Speaker 1: paint you want on the walls. Uh, this is your place.

786
00:35:24,239 --> 00:35:25,759
Speaker 1: You get to customize it. You get to make the

787
00:35:25,800 --> 00:35:29,520
Speaker 1: little modifications that your landlord, never let you, never let

788
00:35:29,560 --> 00:35:31,560
Speaker 1: you add on back. When you're renting, you can do

789
00:35:31,600 --> 00:35:33,799
Speaker 1: as much like floral print wallpaper as you want, like

790
00:35:33,800 --> 00:35:36,279
Speaker 1: to your heart's content. Wall Papers expensive, man, Like we

791
00:35:36,320 --> 00:35:38,879
Speaker 1: found that out recently. I only really wanted to put

792
00:35:38,960 --> 00:35:41,440
Speaker 1: wallpaper literally just papers back, you know, just in the

793
00:35:41,480 --> 00:35:44,200
Speaker 1: half bath. And we looked up the prices. We're like,

794
00:35:44,320 --> 00:35:46,680
Speaker 1: we're just gonna paint. You're like, yeah, bucket of paint

795
00:35:46,760 --> 00:35:49,279
Speaker 1: is way more affordable. It's crazy. Yeah, And like it

796
00:35:49,320 --> 00:35:52,520
Speaker 1: takes a special application process, Like somebody needs somebody that

797
00:35:52,560 --> 00:35:54,960
Speaker 1: knows how to put wall paper up properly. Uh, and

798
00:35:54,960 --> 00:35:57,200
Speaker 1: those folks are fewer and far between. So we're talking

799
00:35:57,239 --> 00:35:59,239
Speaker 1: about buying, but when you buy your you are also

800
00:35:59,239 --> 00:36:02,239
Speaker 1: putting down roots in a community, which adds to this

801
00:36:02,320 --> 00:36:05,040
Speaker 1: level of richness to a living situation. This is I

802
00:36:05,040 --> 00:36:07,000
Speaker 1: guess what I was saying, Like those different intangibles. You

803
00:36:07,000 --> 00:36:11,000
Speaker 1: can't really put a numerical value on the depth of

804
00:36:11,040 --> 00:36:14,799
Speaker 1: relationship that comes when you are living somewhere because you've

805
00:36:14,880 --> 00:36:18,560
Speaker 1: purchased there. You approach everything differently when there's a busted

806
00:36:18,560 --> 00:36:20,839
Speaker 1: water main or you know, like you see, we live

807
00:36:20,840 --> 00:36:22,600
Speaker 1: in an old part of town. This is, and I'm

808
00:36:22,600 --> 00:36:25,160
Speaker 1: gonna get you see like a little trickle of water

809
00:36:25,239 --> 00:36:27,759
Speaker 1: coming up through the asphalt. And you know, I think

810
00:36:27,920 --> 00:36:30,200
Speaker 1: for the most part, most renters would see that and

811
00:36:30,200 --> 00:36:33,840
Speaker 1: be like, not my problem, well I do, whereas owners

812
00:36:33,880 --> 00:36:35,839
Speaker 1: see it and they think, oh, man, like we gotta

813
00:36:35,880 --> 00:36:37,360
Speaker 1: get that taken care of. This is gonna this is

814
00:36:37,360 --> 00:36:38,880
Speaker 1: gonna wreck the street. I do want to speak to that,

815
00:36:38,920 --> 00:36:40,799
Speaker 1: because I think you're right in many respects. But I

816
00:36:40,840 --> 00:36:43,080
Speaker 1: also think that there are some wrinters who feel that

817
00:36:43,080 --> 00:36:45,239
Speaker 1: sense of community, and some of them feel like I

818
00:36:45,239 --> 00:36:47,279
Speaker 1: remember one neighbor just a few years ago, as his

819
00:36:47,320 --> 00:36:50,560
Speaker 1: rent was going up, he felt like he basically had

820
00:36:50,600 --> 00:36:53,319
Speaker 1: to move budget wise somewhere else, and he was a

821
00:36:53,320 --> 00:36:55,319
Speaker 1: stakeholder in our community and I hated to see him

822
00:36:55,360 --> 00:36:58,000
Speaker 1: go for that reason. And so there are some people

823
00:36:58,000 --> 00:37:00,919
Speaker 1: who rent who feel that passionately about their Definitely yeah,

824
00:37:01,040 --> 00:37:03,800
Speaker 1: and so yeah, I definitely can. But I think oftentimes

825
00:37:03,800 --> 00:37:05,640
Speaker 1: it can be harder, and they're sort of like this,

826
00:37:05,840 --> 00:37:08,040
Speaker 1: un like you can't put your finger on it. But

827
00:37:08,080 --> 00:37:09,799
Speaker 1: like if you know in the back of your mind

828
00:37:09,880 --> 00:37:13,000
Speaker 1: that you're not here forever, if it feels even less permanent,

829
00:37:13,040 --> 00:37:15,680
Speaker 1: there's always that call of potentially going somewhere else. That's right. Yeah,

830
00:37:15,960 --> 00:37:19,840
Speaker 1: um so, so Matt, let's talk about maybe somebody who says, Okay, listen,

831
00:37:19,840 --> 00:37:22,400
Speaker 1: I hear what you guys are saying, and I but

832
00:37:22,480 --> 00:37:24,120
Speaker 1: I still I want to be a buyer. That's still

833
00:37:24,120 --> 00:37:25,359
Speaker 1: a goal of mine. And I get that. I think

834
00:37:25,400 --> 00:37:27,560
Speaker 1: that's a reasonable goal to have. And a lot of

835
00:37:27,560 --> 00:37:30,799
Speaker 1: people do want to own a home, and that is

836
00:37:30,920 --> 00:37:32,600
Speaker 1: something that you and I we we both own our

837
00:37:32,640 --> 00:37:35,120
Speaker 1: own home and it has been, for the most part

838
00:37:35,160 --> 00:37:37,120
Speaker 1: a good thing for for us and for our families,

839
00:37:37,280 --> 00:37:39,880
Speaker 1: and we have felt those intangible benefits that you just

840
00:37:39,880 --> 00:37:43,160
Speaker 1: talked about, a sense of community, a sense of belonging,

841
00:37:43,239 --> 00:37:46,319
Speaker 1: and um we love the community where we live. And

842
00:37:46,400 --> 00:37:48,440
Speaker 1: so yeah, what do you do if you want to

843
00:37:48,440 --> 00:37:50,360
Speaker 1: own a home but you're just not ready financially. I

844
00:37:50,360 --> 00:37:52,600
Speaker 1: think that's an important question for us to answer. And

845
00:37:52,920 --> 00:37:55,560
Speaker 1: I think our initial answer would be to say, more money,

846
00:37:55,840 --> 00:37:59,399
Speaker 1: like really start saving now, save, savee save, yes, make

847
00:37:59,480 --> 00:38:03,560
Speaker 1: that an actual priority, and start funneling your dollars into

848
00:38:03,640 --> 00:38:06,160
Speaker 1: a savings account so that you can be ready to

849
00:38:06,160 --> 00:38:09,080
Speaker 1: purchase in the near future. And and you know, set

850
00:38:09,080 --> 00:38:11,760
Speaker 1: a goal, make a timeline so that you can actually

851
00:38:11,800 --> 00:38:14,640
Speaker 1: reach that goal in a specific amount of time, whether

852
00:38:14,680 --> 00:38:17,200
Speaker 1: it's twenty four months, thirty six months, forty eight months.

853
00:38:17,480 --> 00:38:19,200
Speaker 1: And you know, one of the things I would say

854
00:38:19,520 --> 00:38:21,880
Speaker 1: is is saving is really important. But if you have

855
00:38:21,920 --> 00:38:24,799
Speaker 1: a longer timeline before you're planning to buy, or before

856
00:38:24,800 --> 00:38:27,360
Speaker 1: you think you'll be able to buy, investing some or

857
00:38:27,760 --> 00:38:29,520
Speaker 1: even all of those down payment dollars can make a

858
00:38:29,560 --> 00:38:31,399
Speaker 1: lot of sense for people to And so yeah, you'll

859
00:38:31,400 --> 00:38:34,360
Speaker 1: you'll likely want to be more conservative than you normally

860
00:38:34,400 --> 00:38:37,320
Speaker 1: would be with dollars that you're investing for retirement inside

861
00:38:37,320 --> 00:38:39,680
Speaker 1: of your four O one K because that's decades down

862
00:38:39,680 --> 00:38:41,200
Speaker 1: the road. And this is just years down the road.

863
00:38:41,239 --> 00:38:42,799
Speaker 1: But you gonna buy a house in a few years,

864
00:38:42,960 --> 00:38:46,279
Speaker 1: not a few decades exactly. I mean, maybe you know

865
00:38:46,360 --> 00:38:48,680
Speaker 1: that's how far off you want to home ownership, but

866
00:38:48,719 --> 00:38:50,480
Speaker 1: that's not the case for most people. And so a

867
00:38:50,480 --> 00:38:53,160
Speaker 1: target date fund is that's in the near future, is

868
00:38:53,200 --> 00:38:56,879
Speaker 1: often a good choice. Like a target date fund, there's

869
00:38:56,880 --> 00:38:59,440
Speaker 1: also an et F called h o M that was

870
00:38:59,520 --> 00:39:02,520
Speaker 1: specific we created to help people save for a down payment,

871
00:39:02,719 --> 00:39:05,239
Speaker 1: and it's more weighted towards bonds, but it also has

872
00:39:05,280 --> 00:39:09,880
Speaker 1: some stock exposure, including more stocks in the real estate sector,

873
00:39:10,239 --> 00:39:12,319
Speaker 1: and so it is supposed to kind of mirror what's

874
00:39:12,320 --> 00:39:14,880
Speaker 1: happening in the housing market to a certain extent. And

875
00:39:14,920 --> 00:39:17,000
Speaker 1: so I think either of those places would be a

876
00:39:17,040 --> 00:39:19,560
Speaker 1: good place for you to put those down payment dollars.

877
00:39:19,960 --> 00:39:22,200
Speaker 1: If you're in this camp where it's gonna be in

878
00:39:22,200 --> 00:39:24,600
Speaker 1: that four to six year timeline maybe before you buy

879
00:39:24,600 --> 00:39:27,360
Speaker 1: a house. If it's in that next like you're eighteen months,

880
00:39:27,840 --> 00:39:30,280
Speaker 1: you probably don't want to be investing on putting almost

881
00:39:30,320 --> 00:39:31,920
Speaker 1: any of it at risk in in the in the

882
00:39:31,960 --> 00:39:34,480
Speaker 1: stock market. That's right. And while we're talking about investing,

883
00:39:34,520 --> 00:39:35,799
Speaker 1: there might be a lot of folks out there who

884
00:39:35,800 --> 00:39:38,680
Speaker 1: are saying to themselves, like Joel and Matte, like, don't

885
00:39:38,680 --> 00:39:40,799
Speaker 1: your own rental properties? It's you know, it seems like

886
00:39:40,800 --> 00:39:43,200
Speaker 1: that you are both all in on real estate. You

887
00:39:43,200 --> 00:39:46,319
Speaker 1: guys own like what four or six homes each, And

888
00:39:46,400 --> 00:39:49,280
Speaker 1: that is true, But there is a massive difference between

889
00:39:49,600 --> 00:39:52,600
Speaker 1: how most people think of their primary home and how

890
00:39:52,680 --> 00:39:55,360
Speaker 1: real estate investors think of the homes that they purchased,

891
00:39:55,440 --> 00:39:57,799
Speaker 1: because when you buy a primary home, you're not necessarily

892
00:39:57,840 --> 00:40:00,960
Speaker 1: thinking about the return on investment of the different improvements

893
00:40:00,960 --> 00:40:03,200
Speaker 1: that you're planning to make you're not assessing your personal

894
00:40:03,239 --> 00:40:06,640
Speaker 1: residence based on investment metrics, and that is okay, like

895
00:40:06,680 --> 00:40:08,920
Speaker 1: we've talked about here on the show, you don't necessarily

896
00:40:09,040 --> 00:40:11,840
Speaker 1: need to do that, but that is one the different

897
00:40:11,840 --> 00:40:14,520
Speaker 1: considerations that you take into account when you're buying an

898
00:40:14,560 --> 00:40:17,880
Speaker 1: investment property. That's what allows rental properties to be really

899
00:40:17,880 --> 00:40:20,600
Speaker 1: successful ventures if you do it right. There's this massive

900
00:40:20,600 --> 00:40:23,400
Speaker 1: difference in mentality when you're buying a home for yourself

901
00:40:23,680 --> 00:40:26,080
Speaker 1: and when you buy one as an investment, which you

902
00:40:26,120 --> 00:40:28,440
Speaker 1: know can lead to very different outcomes. Yeah, for instance,

903
00:40:28,480 --> 00:40:30,200
Speaker 1: the price point that you're buying a home att Let's

904
00:40:30,200 --> 00:40:34,000
Speaker 1: say you're buying a home in the six fifty dollar

905
00:40:34,120 --> 00:40:36,719
Speaker 1: range that in all likelihood is not going to make

906
00:40:36,760 --> 00:40:39,879
Speaker 1: a great investment property. Typically the amount of rent does

907
00:40:39,880 --> 00:40:42,080
Speaker 1: not go up and tain them with the home sale price,

908
00:40:42,160 --> 00:40:44,400
Speaker 1: and so you're probably going to if you want to

909
00:40:44,400 --> 00:40:46,840
Speaker 1: find a good investment property, find something that's in the

910
00:40:47,400 --> 00:40:51,040
Speaker 1: two two fifty maybe three thousand dollar range that that

911
00:40:51,160 --> 00:40:53,319
Speaker 1: might be more appropriate. But if you buy a three

912
00:40:53,400 --> 00:40:55,120
Speaker 1: quarter a million dollar house and you're like, this is

913
00:40:55,160 --> 00:40:57,680
Speaker 1: gonna be a good round of property someday, it's it's

914
00:40:57,680 --> 00:40:59,680
Speaker 1: probably not going to make you very much money. And

915
00:40:59,760 --> 00:41:02,200
Speaker 1: so those are things that real estate investors have to consider,

916
00:41:02,280 --> 00:41:05,520
Speaker 1: but that homeowners don't necessarily have to consider that. And

917
00:41:05,600 --> 00:41:07,479
Speaker 1: and yeah, one of the things Matt we I would

918
00:41:07,520 --> 00:41:11,080
Speaker 1: say is it's really easy, especially right now, to succumb

919
00:41:11,120 --> 00:41:14,040
Speaker 1: to recency bias. You'll see you see that, like this

920
00:41:14,160 --> 00:41:17,160
Speaker 1: one particular phrase on every fund perspectives you read. If

921
00:41:17,160 --> 00:41:20,400
Speaker 1: you're an investor, past performance is not indicative of future returns.

922
00:41:20,680 --> 00:41:24,120
Speaker 1: And that is true of home prices too, like could

923
00:41:24,280 --> 00:41:26,719
Speaker 1: home prices in your area continue to soar? Could they

924
00:41:26,760 --> 00:41:30,640
Speaker 1: continue to go up at a ridiculous, ridiculous clip, And sure,

925
00:41:30,840 --> 00:41:34,000
Speaker 1: yeah they can. Will they continue to increase at double

926
00:41:34,040 --> 00:41:37,360
Speaker 1: digit pace for years to come? The answer is probably not.

927
00:41:37,800 --> 00:41:40,920
Speaker 1: That's highly unlikely. And so don't let the massive uptick

928
00:41:40,960 --> 00:41:43,640
Speaker 1: in prices cause you to make a rushed decision that

929
00:41:43,840 --> 00:41:47,080
Speaker 1: isn't right for your specific situation. Don't let what's happened

930
00:41:47,120 --> 00:41:50,399
Speaker 1: in the last eighty four months create fomo in your brain,

931
00:41:50,719 --> 00:41:52,960
Speaker 1: create fomo in your house saying we got to get

932
00:41:53,000 --> 00:41:55,680
Speaker 1: in now before the housing market completely runs away from us.

933
00:41:56,239 --> 00:41:58,640
Speaker 1: I'll admit it's been a crazy it's been a crazy

934
00:41:58,719 --> 00:42:01,080
Speaker 1: last twenty four months, and I can see how would

935
00:42:01,080 --> 00:42:03,759
Speaker 1: be deflating, but I would not let that inform your

936
00:42:03,800 --> 00:42:07,960
Speaker 1: decision making if you're underlying financial fundamentals aren't solid and

937
00:42:08,120 --> 00:42:10,200
Speaker 1: and and you're not actually ready to buy a house.

938
00:42:10,600 --> 00:42:12,120
Speaker 1: Totally agree, man, Yeah, there there are going to be

939
00:42:12,160 --> 00:42:14,919
Speaker 1: different strokes for different folks. Uh. There is not gonna

940
00:42:15,000 --> 00:42:17,959
Speaker 1: be a one size fits all guidance rule of thumb,

941
00:42:18,280 --> 00:42:20,279
Speaker 1: you know, for these types of nuanced decisions like this,

942
00:42:21,120 --> 00:42:23,600
Speaker 1: being a homeowner, it's gonna be great if you want

943
00:42:23,640 --> 00:42:25,480
Speaker 1: to be one, and if you've taken them proper financial

944
00:42:25,520 --> 00:42:28,000
Speaker 1: steps like you mentioned. But being a wrinter is a

945
00:42:28,040 --> 00:42:31,040
Speaker 1: completely fine decision as well, and in some markets it's

946
00:42:31,040 --> 00:42:33,960
Speaker 1: a much better choice when you're looking at the financials

947
00:42:34,000 --> 00:42:35,560
Speaker 1: of it. And so, no matter which route you take,

948
00:42:35,640 --> 00:42:37,520
Speaker 1: we want to see our listeners. We want to see

949
00:42:37,520 --> 00:42:39,520
Speaker 1: all of you, how the money listeners out there, all

950
00:42:39,560 --> 00:42:43,719
Speaker 1: you besties striving for financial independence that doesn't have to

951
00:42:43,840 --> 00:42:47,040
Speaker 1: include owning your own home, despite the popular belief that

952
00:42:47,239 --> 00:42:50,360
Speaker 1: it must include home ownership. It's super tricky, Matt, because

953
00:42:50,400 --> 00:42:53,160
Speaker 1: buying a home is such an emotional decision. Where we live,

954
00:42:53,239 --> 00:42:56,160
Speaker 1: we spend so much time in that house in our community,

955
00:42:56,520 --> 00:42:59,719
Speaker 1: and I totally get it. Like where I live, it's

956
00:42:59,719 --> 00:43:03,279
Speaker 1: a big I'm deeply attached to my neighborhood, but also

957
00:43:03,360 --> 00:43:05,719
Speaker 1: to like my physical house, Like I love that thing.

958
00:43:06,080 --> 00:43:08,480
Speaker 1: And um, I told people in the audience like that

959
00:43:08,560 --> 00:43:11,279
Speaker 1: we have been renovating. We just moved back in. It's

960
00:43:11,360 --> 00:43:13,320
Speaker 1: so exciting to be back in our house that we

961
00:43:13,719 --> 00:43:15,880
Speaker 1: that we love. And it's uh, you know, it's this

962
00:43:16,320 --> 00:43:20,200
Speaker 1: nineteen twenties bundalow that has like all like unpainted molding.

963
00:43:20,239 --> 00:43:22,360
Speaker 1: It's got all these original features that we are just

964
00:43:22,480 --> 00:43:24,600
Speaker 1: kind of obsessed with, and being back inside it, it's

965
00:43:24,640 --> 00:43:27,120
Speaker 1: just it's really special for for us. I was gonna say,

966
00:43:27,200 --> 00:43:31,720
Speaker 1: is it magical? Is like incanto which everybody's doing incanto

967
00:43:31,840 --> 00:43:35,320
Speaker 1: dance parties due linmon Well, he knows the formula, he

968
00:43:35,600 --> 00:43:38,040
Speaker 1: knows how to write a catchy song that you cannot

969
00:43:38,160 --> 00:43:41,000
Speaker 1: escape say, that's true. So yeah, I just don't want

970
00:43:41,040 --> 00:43:44,120
Speaker 1: to downplay the role that emotions play in these decisions.

971
00:43:44,160 --> 00:43:45,960
Speaker 1: But at the same time, you have to kind of

972
00:43:46,520 --> 00:43:48,239
Speaker 1: find a way. You have to write them in, you

973
00:43:48,320 --> 00:43:50,040
Speaker 1: have to keep them in check. Yep. And and it's

974
00:43:50,040 --> 00:43:51,960
Speaker 1: not they shouldn't play a part in your in your

975
00:43:52,000 --> 00:43:54,560
Speaker 1: decision making, but don't let them take over and make

976
00:43:54,600 --> 00:43:57,080
Speaker 1: the decision for you. Absolutely. All right, Let's get back

977
00:43:57,080 --> 00:43:59,000
Speaker 1: to the beer that we had on this episode, Matt.

978
00:43:59,040 --> 00:44:01,759
Speaker 1: This is l say brow and it is speaking of

979
00:44:01,800 --> 00:44:04,879
Speaker 1: think my my My brother in law's a Spanish teacher,

980
00:44:05,000 --> 00:44:06,840
Speaker 1: so I don't know how to I don't know how

981
00:44:06,880 --> 00:44:10,080
Speaker 1: to talk like that the cedar. I guess that's what

982
00:44:10,080 --> 00:44:12,120
Speaker 1: would your take on this beer, Matt? If we were

983
00:44:12,160 --> 00:44:16,120
Speaker 1: still doing the one word descriptions, I would say delightful. Um,

984
00:44:16,480 --> 00:44:20,440
Speaker 1: it's definitely got that hoppy farmhouse funk gone on right

985
00:44:20,520 --> 00:44:23,600
Speaker 1: like like you can totally taste what I presume is Brett,

986
00:44:23,760 --> 00:44:27,200
Speaker 1: like Brett and mices, like that bacterial strain that they

987
00:44:27,640 --> 00:44:30,520
Speaker 1: introduced to the beer. It gives it a very distinct flavor.

988
00:44:30,800 --> 00:44:33,000
Speaker 1: It's got that going on. But I guess it's also

989
00:44:33,160 --> 00:44:35,480
Speaker 1: got some of like the floral aromatics that you might

990
00:44:35,560 --> 00:44:38,480
Speaker 1: get from cedar. Uh. We specifically pick this one up

991
00:44:38,520 --> 00:44:41,279
Speaker 1: because it said cedar on it, and that is not

992
00:44:41,680 --> 00:44:43,840
Speaker 1: something I've ever seen on a beer before. Have you

993
00:44:43,840 --> 00:44:45,800
Speaker 1: ever had a beer with this type of wood in it?

994
00:44:45,840 --> 00:44:47,480
Speaker 1: But not not that I know of? Yeah, I mean neither.

995
00:44:47,520 --> 00:44:50,080
Speaker 1: I feel like it impacted the beer minimally, right, Like

996
00:44:50,160 --> 00:44:52,800
Speaker 1: some beers we get that when they're aged and you know,

997
00:44:52,880 --> 00:44:56,800
Speaker 1: like punchions or like new white oak wine barrels or

998
00:44:56,840 --> 00:44:59,480
Speaker 1: something like that, you can really taste the effect of

999
00:44:59,600 --> 00:45:01,440
Speaker 1: the wo it on the beer. But with this, I

1000
00:45:01,480 --> 00:45:03,160
Speaker 1: feel like maybe it's just even more than nose. It's

1001
00:45:03,200 --> 00:45:06,120
Speaker 1: more like in the florals and the aromatics. It's really subtle.

1002
00:45:06,480 --> 00:45:08,759
Speaker 1: But because of that it makes it delightful. Yeah, I

1003
00:45:09,440 --> 00:45:11,840
Speaker 1: wrote down three things. I wrote happy, earthy, and mineral

1004
00:45:11,920 --> 00:45:13,800
Speaker 1: like and yeah, I have some of those like mineral

1005
00:45:13,960 --> 00:45:16,239
Speaker 1: mineral flavors going on. It's like we're like taking a

1006
00:45:16,320 --> 00:45:18,560
Speaker 1: vitamin This is like a vitamin beer over vitamin water

1007
00:45:18,960 --> 00:45:21,480
Speaker 1: anything like sugar. This tastes like a beer the way

1008
00:45:21,600 --> 00:45:23,120
Speaker 1: they used to make beer back in the day. They

1009
00:45:23,239 --> 00:45:25,239
Speaker 1: kind of like a French table beer from the like

1010
00:45:25,480 --> 00:45:27,560
Speaker 1: early or something. We're like they used to do back

1011
00:45:27,560 --> 00:45:30,080
Speaker 1: in Texas, which is where Jester King is located, right,

1012
00:45:30,160 --> 00:45:32,000
Speaker 1: which we still have not made it out too sadly.

1013
00:45:32,120 --> 00:45:33,720
Speaker 1: Last time we made it to Austin, we had plans

1014
00:45:33,800 --> 00:45:35,560
Speaker 1: to get out to Jester King and we missed it.

1015
00:45:35,800 --> 00:45:37,640
Speaker 1: They're so far out from the city. Well, because they're

1016
00:45:37,680 --> 00:45:39,880
Speaker 1: on like a farmhouse setting, and which is cool, like

1017
00:45:40,239 --> 00:45:42,040
Speaker 1: it's great that they're out in the desert, but at

1018
00:45:42,080 --> 00:45:43,600
Speaker 1: the same time, that makes it I mean, I can't

1019
00:45:43,680 --> 00:45:47,920
Speaker 1: take a bird scooter the Jester king. That's true. That's true. Well,

1020
00:45:48,040 --> 00:45:51,400
Speaker 1: next time we'll I don't rent a car, get a priority, yes,

1021
00:45:51,760 --> 00:45:53,520
Speaker 1: but um yeah, I'm glad we got to share this

1022
00:45:53,640 --> 00:45:56,040
Speaker 1: one together on this episode. And that's going to do

1023
00:45:56,120 --> 00:45:58,279
Speaker 1: it for this episode. For listeners who want show notes

1024
00:45:58,440 --> 00:46:02,000
Speaker 1: links to anything we mentioned on today's show, we'll have

1025
00:46:02,120 --> 00:46:04,160
Speaker 1: those up in the show notes on our website at

1026
00:46:04,200 --> 00:46:05,960
Speaker 1: how to money dot com. That's right, and that's gonna

1027
00:46:05,960 --> 00:46:08,479
Speaker 1: be a buddy until next time. Best Friends Out, Best

1028
00:46:08,560 --> 00:46:09,279
Speaker 1: Friends Out.