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Speaker 1: Welcome to Had the Money. I'm Joel and I am Matt,

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Speaker 1: and today we're discussing the dirty truth about home ownership,

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Speaker 1: the dirty.

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Speaker 2: Truth the did you ever watch Clinting? Was it dirty? Harry?

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Speaker 2: That's the That's what I'm thinking. I never saw it.

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Speaker 1: Nobody liked some Clint Eastwood classic, The Unforgiven. I think

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Speaker 1: that was my favorite of his.

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Speaker 2: Uh yeah, we're talking about the dirty truth of home ownership,

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Speaker 2: and it makes me think that we're going to uncover

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Speaker 2: some sort of scandal or something like that. There there

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Speaker 2: is no expos that we're making public here to all

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Speaker 2: of our listeners, but we do want to make sure

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Speaker 2: that folks are entering home ownership with their eyes open,

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Speaker 2: that you're thinking through all of the different factors, all

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Speaker 2: the different ways that it's going to cost you. And

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Speaker 2: mainly because I don't think there's there's there's not a

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Speaker 2: lot of folks doing this. There aren't a lot of

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Speaker 2: folks who are calling into question this sort of forbidden fruit,

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Speaker 2: this thing that you dare not speak ill of. But

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Speaker 2: in essence, that's what we're gonna do today. We're gonna

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Speaker 2: poke the bear a little bit. Let's be honest.

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Speaker 1: The facts on the ground have changed in the housing

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Speaker 1: market significantly, Yes, in particular.

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Speaker 2: In the last year or two. Got that as well.

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Speaker 1: And so yeah, we're gonna talk about current trends and

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Speaker 1: how that impacts how you think about buying a home

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Speaker 1: or kind of staying put. But Matt, before we get

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Speaker 1: to that, I just wanted to give a shout out

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Speaker 1: listener Lindy. She emailed us and she she had to

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Speaker 1: give herself a pat on the back, and I will

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Speaker 1: give her a pat on the back here too, for

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Speaker 1: scoring a discount. No, not just before she bought something

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Speaker 1: after the fact. Yeah, And I love this because.

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Speaker 2: She pulled the she pulled that Costcouno reverse card. It's like, hey,

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Speaker 2: how about this, that's right.

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Speaker 1: And so she had bought something, and I think there

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Speaker 1: was like a Mother's Day sale or something that happened

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Speaker 1: right after the fact.

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Speaker 2: It was something that she had not yet received the

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Speaker 2: benefit of. It's like she had made the purchase and

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Speaker 2: then she saw that the price had dropped, and that's

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Speaker 2: when she thought, Oh, no, I should have waited to

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Speaker 2: have made that purchase. I got robbed.

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Speaker 1: Yeah, but no, if you just kindly asked, and she

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Speaker 1: like literally detailed her email correspondence for us. In the

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Speaker 1: email she sent us, it was super sweet, just asking saying, hey,

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Speaker 1: see there's a discount now. I bought before the discount,

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Speaker 1: didn't realize this was coming down the pike. Can you

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Speaker 1: apply this discount to my order? And the answer was yeah,

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Speaker 1: of course, we're retroactive.

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Speaker 2: Yeah.

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Speaker 1: Basically one hundred and seventy five bucks back in her

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Speaker 1: pocket just for asking the question. And we always we

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Speaker 1: talk a lot about asking for discounts and how important

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Speaker 1: that can be. It's a good, good muscle to exercise

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Speaker 1: to save money, but we haven't really talked about I

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Speaker 1: guess doing it after the fact, and I think that

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Speaker 1: is not usually as strong of an argument. But in

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Speaker 1: Linda's case, it worked. And it's still like, what's the

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Speaker 1: worst that can happen? They might be like ever hurt

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Speaker 1: STI ask? Yeah, they might be like nope, sorry, But

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Speaker 1: still I think it's a good exercise. And sometimes people,

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Speaker 1: especially at a product like that, will reconsider or they'll yeah,

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Speaker 1: give you, give you some sort of discount. In this case,

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Speaker 1: you got the full full fifty percent off.

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Speaker 2: Heck yeah, Well, and this is a reason that we

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Speaker 2: love talking about money. This is one of the behind

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Speaker 2: the fact that we started this podcast is because we

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Speaker 2: want folks talking about their money, not just in the

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Speaker 2: ways that you could earn it and invest it, but

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Speaker 2: also the way that you spend it. And we want

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Speaker 2: there to be a whole lot of savvy consumers out there.

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Speaker 1: And Lindy was like, I don't think I would have

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Speaker 1: done this had and I've been listening to you guys.

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Speaker 1: You always pushed me in that kind of directions, patting

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Speaker 1: ourselves on the back, where like this, that's exactly the

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Speaker 1: kind of behavior that we want to see the folks

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Speaker 1: who then feel empowered to, you know, basically be an

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Speaker 1: advocate for themselves.

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Speaker 2: Lind do you thank you so much for sending that

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Speaker 2: win our way? And actually it really does encourage Joel

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Speaker 2: and I when we hear some of these different stories.

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Speaker 2: And so if you have something not even similar, but

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Speaker 2: something you know in this vein where you have made

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Speaker 2: a positive change in your life when it comes to

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Speaker 2: your money, we would love to hear that. We may

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Speaker 2: not we don't share them all on the show, but

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Speaker 2: there's certain ones that kind of stand out and ones

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Speaker 2: that we have to share with our listeners. Sure, but

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Speaker 2: if you've got one of those yes in them our way,

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Speaker 2: how the money pot.

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Speaker 1: We have one today in our email inbox from a

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Speaker 1: listener who's able to buy a home, largely because he

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Speaker 1: was like I was prepared, I was saving during COVID

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Speaker 1: and and if I hadn't have been listening to you

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Speaker 1: guys and taking those steps, I wouldn't I wouldn't have

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Speaker 1: owned a home today. So on that note, let's talk

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Speaker 1: about home ownership. But first ownership mentioned the beer. This

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Speaker 1: is called It Was a Time to Believe In Anything,

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Speaker 1: and it's an IPA by Burial. They have the most

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Speaker 1: over the top beer names and this one fits fits

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Speaker 1: like a glove for the Burial Mami convention. But we'll

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Speaker 1: have our thoughts on this one at the end of

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Speaker 1: the episode. And let's talk about housing, Matt the dirty

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Speaker 1: truth about home ownership. There are a lot of things

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Speaker 1: that we like houses. I mean everyone does. I like

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Speaker 1: ale houses, I like the house we live in.

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Speaker 2: It's kind of like what we're fighting against is the

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Speaker 2: fact that everybody wants a house. Everybody likes the house well,

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Speaker 2: and part of that it's a desire for everyone. Yeah,

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Speaker 2: for all these millennials who are entering home ownership, age

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Speaker 2: to be able to get their hands on one.

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Speaker 1: Yeah, and there's nothing wrong with buying a house, And

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Speaker 1: in fact, I think it's going to sound like we

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Speaker 1: think there's something wrong with it during this episode because

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Speaker 1: of kind we're actually trying to combat the predominant narrative

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Speaker 1: and help make people think again. But we will try

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Speaker 1: to offer a balanced perspective on home buying.

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Speaker 2: But it just makes me.

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Speaker 1: Think, Matt, that you know, in childhood, there are all

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Speaker 1: sorts of things we hear are adults say or parents say,

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Speaker 1: and we end up kind of believing it as a

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Speaker 1: stock belief our whole life, never really questioning the tenants

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Speaker 1: of whether it's true or not. It makes you think

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Speaker 1: about swimming after eating, plus to wait like an hour.

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Speaker 2: Right, we're entering pool season for sure, Yes it is here.

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Speaker 1: And you're gonna hear somebody say you gotta wait at

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Speaker 1: least thirty minutes. So you gotta wait at least an

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Speaker 1: hour after you eat before you go swimming. But this

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Speaker 1: is one of those things. At some point I finally

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Speaker 1: got fed up and I was like, is this for

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Speaker 1: real or not? And it turns out the Mayo Clinic

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Speaker 1: says you might experience some minor cramping, but in no

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Speaker 1: way is it dangerous to go swimming after eating. Yeah,

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Speaker 1: so this is one of those old wives tales or

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Speaker 1: whatever you call them that we've all heard growing up.

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Speaker 1: But it's not actually true. And I think the same

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Speaker 1: thing can be said of owning a home. It's the

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Speaker 1: surefire path to building wealth. That's how you get there,

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Speaker 1: home ownership. And it's this like money fact lodged somewhere

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Speaker 1: in the recesses of our brain that we can't shake,

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Speaker 1: and so we have to revisit the question is this

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Speaker 1: actually true? Is this actually act? And it's really a

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Speaker 1: nuanced topic, and so that's why we want to dive

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Speaker 1: deep today.

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Speaker 2: Yeah, my favorite pool myth was that if you pee

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Speaker 2: in the pool, it's going to turn red and everybody's

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Speaker 2: gonna see that you beat in the pool. But hey,

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Speaker 2: that's not true. I p in the pool all the time.

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Speaker 2: It never turns red. Just kidding out of it, hanging

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Speaker 2: out at the pool with you. Again, I don't actually

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Speaker 2: do that because that's not hygienic. Right, We've got to

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Speaker 2: keep that pool. But there are a lot of things

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Speaker 2: out there that we believe to be true. But that's

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Speaker 2: basically because it's just the default assumption, and the narrative

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Speaker 2: exists that if you're renting, you are throwing away money.

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Speaker 2: You need to you got to buy a home in

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Speaker 2: order to build up that equity. If you want to

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Speaker 2: build up some generational wealth, you better get on the

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Speaker 2: path to home ownership, otherwise you're gonna be left behind.

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Speaker 2: How else are you gonna get there? And actually the

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Speaker 2: stats show that homeowners actually do have more wealth than renters.

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Speaker 2: Are you upending our argument the very a lot more? No, No,

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Speaker 2: we will get to that later on. We are not

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Speaker 2: against home ownership, like we said at the top here,

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Speaker 2: but it's also not a slam dunk decision, and it

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Speaker 2: definitely doesn't ensure that you're going to build wealth faster.

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Speaker 2: It might be a good forced method of savings for

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Speaker 2: those out there who might have less discipline when it

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Speaker 2: comes to your investing, but it is not a better

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Speaker 2: route to financial independence as many folks assume.

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Speaker 1: All right, So I think part of the reason is,

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Speaker 1: like I said, the cult of home ownership. We've kind

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Speaker 1: of had this.

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Speaker 2: That would have made a good secondary title. Yeah, the

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Speaker 2: cult of home ownership.

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Speaker 1: That's been kind of a change and embedded belief for

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Speaker 1: a long time, just in the minds of everyday Americans.

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Speaker 1: And I think part of that comes from government, part

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Speaker 1: of that comes from news media, part of that comes

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Speaker 1: from financial pundits, but something else. I think another reason

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Speaker 1: that people really think that owning a home is like

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Speaker 1: the best decision they can make from a financial perspective,

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Speaker 1: it comes from just what's happened in recent memory.

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Speaker 2: Right.

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Speaker 1: Sure, there's a lot of recency bias, is what I'm

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Speaker 1: trying to say. And so if you bought a house

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Speaker 1: in Florida back in twenty nineteen, my guess is, no

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Speaker 1: one could convince you that buying a home is a

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Speaker 1: dumb move because home prices in Florida are up something

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Speaker 1: like eighty percent in that time period, and so it

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Speaker 1: would take a lot of persuasion to get you to

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Speaker 1: even consider that buying a home might not be a

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Speaker 1: slam duck move all the time in every situation. And

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Speaker 1: even if you sold your home just a year after

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Speaker 1: buying it, you still did well, like you still did okay,

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Speaker 1: making enough to more than cover the transaction costs of

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Speaker 1: that purchase in our likelihood. And so this torrential housing

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Speaker 1: market and ultra low rates that we had for a

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Speaker 1: bunch of years that fueled affordability, and that's really only

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Speaker 1: reinforced the notion that owning a home is the quickest

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Speaker 1: path to wealth. But someone who bought a home in

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Speaker 1: six they likely have a different feeling because they had

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Speaker 1: a much different experience. They either a lot of folks

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Speaker 1: had their homework closed on back then, or even if

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Speaker 1: they didn't, they might have been underwater for a bunch

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Speaker 1: of years, and they might have a completely different perspective

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Speaker 1: because they bought a home at a different period in time.

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Speaker 1: And so I just think that recency bias is a

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Speaker 1: part of this. It's tainted our view and has created

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Speaker 1: an even stronger bias towards home ownership. But the environment

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Speaker 1: we're in right now is different, and so different considerations

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Speaker 1: are necessary.

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Speaker 2: Yeah, a part of the assumption that it's a really

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Speaker 2: good idea to buy a home is what we've experienced

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Speaker 2: over the recent decade plus. But there is just no

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Speaker 2: guarantee that home values are going to continue to skyrocket

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Speaker 2: because again, yea, if you bought a home back in

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Speaker 2: twenty eleven, you're sitting on a ton of equity and

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Speaker 2: you probably feel like a real estate investing genius, but

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Speaker 2: that gravy train is slowing down. And in fact, a

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Speaker 2: couple weeks ago, April's median home value data it came

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Speaker 2: out and we saw the biggest decline in home values

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Speaker 2: actually in twenty years. But the default assumption it still holds.

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Speaker 2: According to a recent Gallup poll, Americans still believe that

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Speaker 2: real estate is the best long term investment by far,

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Speaker 2: though actually I mean, I think it will be interesting

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Speaker 2: to see if sentiments shift, if we continue to see

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Speaker 2: declines in home values, or even if we see we

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Speaker 2: experience a housing price plateau for a period of time,

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Speaker 2: because I feel like that would only reinforce the fact

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Speaker 2: that folks are only looking at the short term. They're

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Speaker 2: not looking at historical data, and that's what we like.

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Speaker 1: To look at, right which I think that's how most

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Speaker 1: people approach a lot of things. Makes me think of

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Speaker 1: bitcoin and how oh fly and high right around the

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Speaker 1: Super Bowl, all those really expensive ads. It's funny, I

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Speaker 1: was listing something the other day and I didn't realize

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Speaker 1: the La Lakers still play at a place called Crypto Arena,

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Speaker 1: and they still.

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Speaker 2: Go the naming rights.

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Speaker 1: I think they still have the naming rights for how long?

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Speaker 1: Who knows, But this is one of those things that

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Speaker 1: it's again that's recency biased too. It's in a lot

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Speaker 1: of people saying to the moon, well, how are those people?

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Speaker 1: I don't hear nearly the same vigor. I think there

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Speaker 1: was a recent bitcoin conference in Miami, Matt, and it

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Speaker 1: was sparsely attended, unlike the couple of years previously where

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Speaker 1: it was tens of thousands of.

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Speaker 2: People popping bottles left and right.

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Speaker 1: Right, And so it's just interesting to note that that

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Speaker 1: taints a lot about how we view things, and I

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Speaker 1: would I don't think it's necessarily makes a lot of

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Speaker 1: sense to equate investing your money in bitcoin or buying

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Speaker 1: a house as the same, because home we have a

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Speaker 1: lot more history when it comes to buying a home,

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Speaker 1: and home values do go up over time, right, But

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Speaker 1: it's also important to mention that the market you buy

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Speaker 1: in matters, and buying bitcoin in January around the Super

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Speaker 1: Bowl last year that didn't pan out so well, and

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Speaker 1: buying a home right now isn't going to be that bad,

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Speaker 1: but it is important to consider, yeah, the timing of

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Speaker 1: the purchase, and yeah, Matt, let's talk about historical data

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Speaker 1: for a second, because if you look at the last

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Speaker 1: thirty years, real estate had an average growth rate of

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Speaker 1: five point three percent, but the S and P five

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Speaker 1: hundred had an annualized return of nine point seven percent,

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Speaker 1: quite a bit more.

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Speaker 2: And which of these is greater? Right, which one would

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Speaker 2: you prefer to? See?

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Speaker 1: This is a question, and that reality holds if you

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Speaker 1: zoom out even further and you look at an even

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Speaker 1: longer period of time, right. And so, if you've listened

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Speaker 1: to this show for any length of time, you know

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Speaker 1: that we like real estate as an investment. But there's

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Speaker 1: a difference between buying a home purely as an investment

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Speaker 1: versus buying a home that you like, right, that's gonna

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Speaker 1: serve as your primary residence. And we make completely different

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Speaker 1: decisions when we're buying a home as an investment versus

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Speaker 1: buying it as a place for us to live and

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Speaker 1: to raise kids, have a family, stuff like that. The

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Speaker 1: entire reason that we're having this discussion is just to

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Speaker 1: combat the knee jerk belief that buying a home is

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Speaker 1: the quickest possible route to wealth, because when you look

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Speaker 1: at those numbers, when you extend the timeframe, it certainly

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Speaker 1: points in favor of stocks being a far better long

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Speaker 1: term investment, even though, like you said, that gallup pole, Matt,

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Speaker 1: it shows that people believe the opposite.

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Speaker 2: That's right. Yeah, Well, actually, what's really unfortunate about that

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Speaker 2: gallup pole too is the fact that the biggest increase

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Speaker 2: as to what people thought was the best long term

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Speaker 2: investment was gold. Yeah. Look at the numbers historically on

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Speaker 2: that too, yes, exactly, which by a long shot underperforms

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Speaker 2: the stock market. Honestly, I think it's pretty equivalent to

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Speaker 2: real estate over like the past thirty, past fifty years.

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Speaker 1: We detailed that in a recent ho Money newsletter.

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Speaker 2: Actually, mm hmm, okay, So when we're talking about home ownership,

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Speaker 2: when we talk about its impact on wealth building, it's

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Speaker 2: impossible to not talk about leverage. It is a key

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Speaker 2: component in the perception and the reality of home price.

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Speaker 2: Appreciate not having to save up the full purchase price

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Speaker 2: of a home using financing, taking on a mortgage. It

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Speaker 2: allows you to buy something that you otherwise wouldn't be

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Speaker 2: able to afford. And this is a great new that

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Speaker 2: is right. I'm certainly happy that mortgages exist and that

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Speaker 2: I didn't have to save up the amount of cash

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Speaker 2: required to buy a home in cash, and I couldn't

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Speaker 2: imagine renting until being able to finally buy when you're

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Speaker 2: like fifty or sixty years old. It would make it

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Speaker 2: untenable for the vast majority of folks out there. But

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Speaker 2: leverage is a double edged sword. Again, Ask any any

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Speaker 2: home flippers, Ask any real estate developers who were out

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Speaker 2: over their skis back in oh seven eight as we

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Speaker 2: experience the popping.

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Speaker 1: Of the real estate bubble. Yeah, the truth is on

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Speaker 1: the leverage front. Maat, it gives and it taketh away. Right,

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Speaker 1: It's it's smart. Reasonable use of leverage can give you

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Speaker 1: a boost. It can help you to afford something like

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Speaker 1: we said, like ten percent down. You can put fifty

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Speaker 1: thousand down to buy a five hundred thousand dollars house.

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Speaker 1: That's kind of incredible, right that the bank trust that

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Speaker 1: you're going to pay that off over the next fifteen

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Speaker 1: or thirty years. But it can also be a rude

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Speaker 1: awakening because if you're assuming that the value of your

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Speaker 1: property is going to see a big bump in value

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Speaker 1: in the short term, leverage just might come back to

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Speaker 1: bite you. You're in real estate in particular, a big

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Speaker 1: chunk of folks tend to assume that not having to

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Speaker 1: save up much money is going to save their bacon.

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Speaker 1: But if the wind isn't at your back in the

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Speaker 1: real estate market, and again the wind has mostly been

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Speaker 1: in our backs over the past twelve years, using leverage

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Speaker 1: too heavily can cause real harm. So if the wind,

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Speaker 1: if the winds are all of a sudden shifts and

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Speaker 1: it's blowing kind of at your face, it's creating you

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Speaker 1: have some headwinds going on, it could especially for real

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Speaker 1: estate investors, that use of leverage could really mess them

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Speaker 1: up in a big way.

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Speaker 2: That's right. Yeah, So hopefully we are not completely shattering

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Speaker 2: all of your hopes for home ownership, but we do

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Speaker 2: have some additional dirty truths to get to when it

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Speaker 2: comes to home ownership, and also some of the things

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Speaker 2: that you need to consider if you are going to

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Speaker 2: go ahead with that home purchase.

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Speaker 1: Well, get all of that right after this. All right, Matt,

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Speaker 1: we're back. Let's keep talking smack about home ownership, and

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Speaker 1: not on purpose. It kind of makes me think we

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Speaker 1: are doing it on purpose. Well yeah, but okay, not

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Speaker 1: for the sake of talking smack, but just for the

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Speaker 1: sake of wanting, wanting folks to make sure that they are,

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Speaker 1: their eyes are open that they are approaching this big

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Speaker 1: purchase while at the same time considering all the different

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Speaker 1: facts and factors that they should keep in mind. Yeah,

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Speaker 1: we're not trying to be contrarian for the sake of

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Speaker 1: being contrarian exactly. It makes me think of hazing, if

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Speaker 1: you wanted to be in some sort of fraternity or

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Speaker 1: something like that. I was never in a fraternity, never

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Speaker 1: had the desire, never was cool enough, let's be honest

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Speaker 1: to do that.

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Speaker 2: But if I had, there's like fraternities for art yeah,

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Speaker 2: I mean, like, uh, fraternity for chemists, you know, a

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Speaker 2: different brethren that you can join. I'm not smart enough

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Speaker 2: professional fraternities, I guess as Okay, it's not just about.

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Speaker 1: Partying it, but there's all like initiation ceremonies to get

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Speaker 1: into that, and I don't know if they're if like

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Speaker 1: what they're doing really to make that happen, But if

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Speaker 1: you still want to be a part of that fraternity

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Speaker 1: after the hazing or that initiation stuff, then it shows

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Speaker 1: that Okay, cool, you've passed the test.

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Speaker 2: You really want to be there.

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Speaker 1: And that's how I think of this episode. If you

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Speaker 1: really want to buy a home, you're going to listen

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Speaker 1: to all these things and you're gonna be like, yeah, Okay,

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Speaker 1: I get it. I get all the potential pitfalls, but

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Speaker 1: it's still the right move for me because I'm ready.

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Speaker 1: And so we'll talk about what it looks like to

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Speaker 1: be financially ready to buy a home as well in

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Speaker 1: just a bit. But it let's talk about renting for

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Speaker 1: just a second, because the biggest misconception about renting is

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Speaker 1: that it's for financial idiots. And you mentioned this line

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Speaker 1: I think earlier, Matt renting is throwing money away, and

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Speaker 1: everybody has heard that line, right, and it just has

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Speaker 1: sunk deep into our psyche now at this point that

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Speaker 1: renting is ridiculous and why would you do it for

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Speaker 1: any longer than you have to?

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Speaker 2: In my mind, when I see people saying that, who

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Speaker 2: I picture are parents, I feel like I see a

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Speaker 2: lot of parents saying that to kids. Yeah, And I

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Speaker 2: think I wonder if it has less to do with

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Speaker 2: like the financial side of things and more about them

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Speaker 2: wanting to encourage their kids to like grow up and

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Speaker 2: get married, have some some kids so that I can

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Speaker 2: enjoy my grand and get like that whole thing. Just

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Speaker 2: trying to move them along in the life as opposed

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Speaker 2: to them actually providing them with any sound financial advice. Yeah.

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Speaker 1: No, that's a good point, and part of it probably

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Speaker 1: has to do with their bias. Are like, I bought

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Speaker 1: a home for seventy thousand dollars thirty two years ago,

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Speaker 1: and now look what it's worded.

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Speaker 2: Sorry, mom, the market's a little different than Yeah.

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Speaker 1: Well, and then again you look at the numbers and

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Speaker 1: they probably would have been better putting money in the

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Speaker 1: market too, But it's just how they've rationalized it, how

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Speaker 1: they've thought about it. But if you're young and you're

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Speaker 1: just getting started in your career and there's a chance

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Speaker 1: you might relocate for that career, renting is probably a

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Speaker 1: slam dunk. Or you might just want to live somewhere

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Speaker 1: else in the near future. Or it doesn't have to

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Speaker 1: be another city, It could be another.

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Speaker 2: Part of town.

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Speaker 1: Yeah, where you live, and so why would you buy, Like,

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Speaker 1: don't rent? Figure out where exactly you want to live first,

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Speaker 1: and even once you have, you might want to keep renting.

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Speaker 1: I mean, one of the biggest perks of renting is

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Speaker 1: that it gives you a ton of flexibility, and that

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Speaker 1: is highly underrated. Also, renting puts a roof up of

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Speaker 1: your head, and so it's not throwing money away because

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Speaker 1: it's giving you a place to call home, even if

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Speaker 1: it's not a place that you own. And like, plus,

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Speaker 1: for all the home improvement haters out there, Matt, they

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Speaker 1: don't have to fix stuff that goes wrong, right, You

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Speaker 1: got a landlord for that. And it certainly makes budgeting

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Speaker 1: easier if you don't have all these other potentially intangible

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Speaker 1: costs we're going to cover in this episode. If you

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Speaker 1: don't have those to deal with.

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Speaker 2: Us unforeseeing expenses, all you've got is a number that

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Speaker 2: you text, right and you say, enter appliance is broken,

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Speaker 2: and that's how you get things fixed. But the biggest

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Speaker 2: win that renting has over buying is affordability. So we

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Speaker 2: are going to make an argument here on the financial

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Speaker 2: side of things. There's a report from realtare dot com

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Speaker 2: and they find that you're going to save money by

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Speaker 2: renting in forty five of the fifty biggest cities out there.

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Speaker 2: So basically that's like everywhere, Like there's the chance that

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Speaker 2: if you are listening to this podcast, you live in

436
00:18:40,880 --> 00:18:43,760
Speaker 2: one of these cities were the best to buy.

437
00:18:43,760 --> 00:18:47,360
Speaker 1: But it was like Detroit and I don't even remember which,

438
00:18:47,400 --> 00:18:49,400
Speaker 1: but there were very, very very few. Let's be honest,

439
00:18:49,440 --> 00:18:52,080
Speaker 1: that most It's better to rent almost everywhere from a

440
00:18:52,080 --> 00:18:53,280
Speaker 1: financial perspective, exactly.

441
00:18:53,400 --> 00:18:55,760
Speaker 2: Yeah. And the fact is that's where the most populous

442
00:18:55,880 --> 00:18:58,000
Speaker 2: areas are as well, like the forty five of the

443
00:18:58,040 --> 00:19:01,359
Speaker 2: fifty major cities, is where a large, large percentage of

444
00:19:01,359 --> 00:19:04,600
Speaker 2: the US population lives. And on average, you're going to

445
00:19:04,640 --> 00:19:09,040
Speaker 2: save eight hundred dollars a month, which is insane. That's

446
00:19:09,040 --> 00:19:11,800
Speaker 2: almost ten thousand dollars a year back in your pocket

447
00:19:11,840 --> 00:19:14,320
Speaker 2: that you can do whatever you want with. But hopefully

448
00:19:14,480 --> 00:19:17,199
Speaker 2: you would take that money and you would invest it.

449
00:19:17,520 --> 00:19:19,639
Speaker 2: But it could actually be much more than that in

450
00:19:19,680 --> 00:19:22,040
Speaker 2: many of the West Coast cities. According to redfind, the

451
00:19:22,080 --> 00:19:26,040
Speaker 2: median estimated monthly mortgage payment for home buyers out in California,

452
00:19:26,080 --> 00:19:30,159
Speaker 2: specifically in San Jose is eleven thousand dollars, and you

453
00:19:30,200 --> 00:19:34,480
Speaker 2: compare that with immedian estimated monthly rents of four thousand.

454
00:19:35,640 --> 00:19:38,520
Speaker 2: That's crazy. What a wild swing. And one final start

455
00:19:38,560 --> 00:19:41,440
Speaker 2: here nationwhy the typical home costs twenty five percent more

456
00:19:41,480 --> 00:19:44,200
Speaker 2: to buy than to rent, and this is without even

457
00:19:44,280 --> 00:19:47,199
Speaker 2: considering maintenance costs That we're going to get to and

458
00:19:47,960 --> 00:19:50,440
Speaker 2: as we talk about some of the additional expenses associated

459
00:19:50,480 --> 00:19:52,680
Speaker 2: with home ownership. But going back to the forty five

460
00:19:52,680 --> 00:19:55,320
Speaker 2: biggest cities where you're saving eight hundred bucks a month,

461
00:19:55,720 --> 00:19:58,240
Speaker 2: were you to not actually spend that money, and were

462
00:19:58,240 --> 00:20:00,000
Speaker 2: you to take it and stick it in the market,

463
00:20:00,200 --> 00:20:02,480
Speaker 2: if you were to invest the difference there, you would

464
00:20:02,560 --> 00:20:06,040
Speaker 2: end up with over nine hundred thousand dollars. That's assuming

465
00:20:06,200 --> 00:20:08,919
Speaker 2: a seven percent rate of return, which is fairly conservative,

466
00:20:09,640 --> 00:20:12,320
Speaker 2: and you would have that much money after thirty years.

467
00:20:12,320 --> 00:20:16,639
Speaker 2: That's nearly a million dollars, which it's just crazy to

468
00:20:16,680 --> 00:20:18,240
Speaker 2: think that you could have that much just on this

469
00:20:18,280 --> 00:20:22,399
Speaker 2: one expense. This isn't like your combined total portfolio, no,

470
00:20:22,680 --> 00:20:24,920
Speaker 2: just on the cost of housing. It kind of makes

471
00:20:24,960 --> 00:20:27,560
Speaker 2: me so. On Monday, we talked about a listener was

472
00:20:27,560 --> 00:20:30,359
Speaker 2: asking about indexed Universal Life and we're talking about how,

473
00:20:30,359 --> 00:20:33,520
Speaker 2: I don't know, it's this fancy product, and yes, technically

474
00:20:33,560 --> 00:20:36,000
Speaker 2: you might be able to grow your wealth by taking

475
00:20:36,000 --> 00:20:38,119
Speaker 2: that money and sticking it in that product, but instead

476
00:20:38,200 --> 00:20:40,720
Speaker 2: go for the cheaper alternative and just invest the difference.

477
00:20:40,800 --> 00:20:43,840
Speaker 2: It almost makes you feel like you can't compare homes.

478
00:20:43,720 --> 00:20:45,520
Speaker 2: It's sort of like you were saying earlier, you can't compare.

479
00:20:45,560 --> 00:20:48,040
Speaker 2: It's not apples to apples. Yeah, this is like apples

480
00:20:48,040 --> 00:20:51,000
Speaker 2: to bananas or something. But it kind of makes when

481
00:20:51,040 --> 00:20:53,000
Speaker 2: you look at it from that in that perspective, it

482
00:20:53,080 --> 00:20:55,000
Speaker 2: kind of makes you think, oh, man, what am I

483
00:20:55,040 --> 00:20:58,280
Speaker 2: actually giving up by purchasing a home as opposed to renting,

484
00:20:58,480 --> 00:21:00,840
Speaker 2: especially if you're talking about some of these more affordable

485
00:21:00,880 --> 00:21:03,560
Speaker 2: cities where renting is drastically more affordable.

486
00:21:03,560 --> 00:21:05,040
Speaker 1: Well, it makes me think about something else. If the

487
00:21:05,080 --> 00:21:09,280
Speaker 1: numbers were to change on car leasing versus buying a car,

488
00:21:09,600 --> 00:21:11,720
Speaker 1: that would change how we think about it. The reason

489
00:21:11,760 --> 00:21:13,439
Speaker 1: we don't like leasing a car is because it's so

490
00:21:13,600 --> 00:21:15,440
Speaker 1: darn expensive and because you have to give it back

491
00:21:15,440 --> 00:21:18,760
Speaker 1: after two or three years. Right, You've you have kind

492
00:21:18,760 --> 00:21:20,679
Speaker 1: of flushed a little a lot of money down the

493
00:21:20,680 --> 00:21:22,919
Speaker 1: toilet in order to do that, and so the wiser

494
00:21:22,960 --> 00:21:24,120
Speaker 1: thing to do is to.

495
00:21:24,040 --> 00:21:24,520
Speaker 2: Buy a car.

496
00:21:24,600 --> 00:21:28,120
Speaker 1: But but let's say the price of leases was magically

497
00:21:28,160 --> 00:21:30,840
Speaker 1: cut in half, we wouldn't hate leasing anymore, and in fact,

498
00:21:30,960 --> 00:21:32,679
Speaker 1: I would probably be the first one to line up

499
00:21:32,680 --> 00:21:35,880
Speaker 1: and lease a car. So it's about.

500
00:21:35,720 --> 00:21:37,400
Speaker 2: The term, or it's less about the language, and it's

501
00:21:37,400 --> 00:21:39,680
Speaker 2: more about the numbers exactly like we would gladly issue

502
00:21:39,680 --> 00:21:41,800
Speaker 2: amakolpa and say oh yeah, yeah, yeah, like we used

503
00:21:41,840 --> 00:21:44,040
Speaker 2: to say that we hate leasing, or oh yeah, yeah yeah,

504
00:21:44,080 --> 00:21:47,440
Speaker 2: we used to say that we hated Index Universal Life. Yeah.

505
00:21:47,440 --> 00:21:49,960
Speaker 2: But if the numbers changed, if if something is different

506
00:21:49,960 --> 00:21:52,520
Speaker 2: on the ground, then we're gonna follow where the data leads.

507
00:21:52,400 --> 00:21:54,000
Speaker 1: Is right, and so so much of it is a

508
00:21:54,080 --> 00:21:57,159
Speaker 1: question of value and price, and so this is what

509
00:21:57,240 --> 00:22:01,400
Speaker 1: makes renting potentially so much better for money savvy folks. Though,

510
00:22:01,560 --> 00:22:04,120
Speaker 1: because you just mentioned Matt almost a million dollars, I mean,

511
00:22:04,240 --> 00:22:06,880
Speaker 1: given some of those numbers, renters actually have a wealth

512
00:22:06,920 --> 00:22:09,520
Speaker 1: building advantage, which is not how any of us ever

513
00:22:09,520 --> 00:22:11,359
Speaker 1: talk about it, not how you ever hear about it.

514
00:22:11,359 --> 00:22:13,520
Speaker 1: It's just that they rarely use it. And so you know,

515
00:22:13,560 --> 00:22:15,080
Speaker 1: it depends on where you live, of course, but you

516
00:22:15,119 --> 00:22:17,840
Speaker 1: could easily be saving one thousand dollars a month or

517
00:22:17,840 --> 00:22:21,800
Speaker 1: more by renting instead of buying. But the key here

518
00:22:22,080 --> 00:22:25,520
Speaker 1: is that if renters would funnel extra cash into investments

519
00:22:25,640 --> 00:22:28,560
Speaker 1: that they'd otherwise put towards a more expensive mortgage, they'd

520
00:22:28,560 --> 00:22:32,600
Speaker 1: actually build wealth more quickly than their friends, their peers

521
00:22:32,800 --> 00:22:35,840
Speaker 1: who buy a house instead it's the problem here, though.

522
00:22:35,880 --> 00:22:38,080
Speaker 1: The crux of the issue is a lack of discipline.

523
00:22:38,320 --> 00:22:40,360
Speaker 1: That's the problem in this scenario. It's not that renting

524
00:22:40,720 --> 00:22:43,480
Speaker 1: is dumb or that renters are at a disadvantage. It

525
00:22:43,520 --> 00:22:46,160
Speaker 1: is that renters are saving a lot of money by

526
00:22:46,160 --> 00:22:49,120
Speaker 1: renting in most of the country, but they're not funneling

527
00:22:49,119 --> 00:22:50,880
Speaker 1: the money that they otherwise would have used to buy

528
00:22:50,880 --> 00:22:52,320
Speaker 1: a house into the market.

529
00:22:52,560 --> 00:22:54,560
Speaker 2: And so the fact is we are going pretty hard

530
00:22:54,600 --> 00:22:58,359
Speaker 2: in the direction of, hey, you should consider renting. It

531
00:22:58,359 --> 00:23:00,800
Speaker 2: shouldn't be a default decision for you to purchase a home.

532
00:23:01,040 --> 00:23:03,480
Speaker 2: And a part of that is because home ownership just

533
00:23:03,560 --> 00:23:05,879
Speaker 2: costs you more than you think. We've already talked about

534
00:23:06,040 --> 00:23:10,400
Speaker 2: basically the upfront costs, like your monthly payments, but specifically

535
00:23:10,600 --> 00:23:13,479
Speaker 2: homes are really expensive to maintain. I've heard that, so

536
00:23:13,760 --> 00:23:17,760
Speaker 2: I've experienced that. Yes, it's just there are just ongoing costs.

537
00:23:17,800 --> 00:23:20,440
Speaker 2: I mean, like patching a roof, the cost of maybe

538
00:23:20,440 --> 00:23:23,640
Speaker 2: some fresh paint it's getting warmed these days. We've talked

539
00:23:23,680 --> 00:23:26,520
Speaker 2: about getting your h VAC service. That's important as well.

540
00:23:26,920 --> 00:23:29,520
Speaker 2: Pest control that's something that costs some money as well,

541
00:23:29,520 --> 00:23:32,440
Speaker 2: Although that's one of those that you could totally diy

542
00:23:32,480 --> 00:23:34,240
Speaker 2: that you can get yourself. We actually have a great

543
00:23:34,359 --> 00:23:39,160
Speaker 2: article up on the website that tells you exactly how

544
00:23:39,200 --> 00:23:41,880
Speaker 2: you should spend your twenty dollars on these two items

545
00:23:41,880 --> 00:23:44,240
Speaker 2: and how that will save you a ridiculous amount of

546
00:23:44,280 --> 00:23:46,240
Speaker 2: money over the years. So that's one way that you

547
00:23:46,240 --> 00:23:49,399
Speaker 2: could reduce that cost. But you're likely going to spend

548
00:23:49,800 --> 00:23:53,440
Speaker 2: roughly about one percent of the purchase price every year

549
00:23:53,520 --> 00:23:57,280
Speaker 2: on home maintenance. That's the general rule of thumb. But

550
00:23:57,320 --> 00:23:59,880
Speaker 2: then just not to mention the fact that you are

551
00:24:00,320 --> 00:24:04,720
Speaker 2: your time, there's this additional hassle factor with getting these

552
00:24:04,720 --> 00:24:07,600
Speaker 2: things done, with scheduling the work being done there on

553
00:24:07,640 --> 00:24:09,760
Speaker 2: your house, or if you are looking to be a

554
00:24:09,800 --> 00:24:12,840
Speaker 2: little more frugal, setting the time aside to actually doing

555
00:24:12,880 --> 00:24:13,639
Speaker 2: that work your strength.

556
00:24:13,720 --> 00:24:15,399
Speaker 1: Yeah, there's a big time costs, just a pain in

557
00:24:15,400 --> 00:24:17,560
Speaker 1: the butt though to being a homeowner, less so than

558
00:24:17,600 --> 00:24:19,840
Speaker 1: being a renter. And sometimes there's an active god. There's

559
00:24:19,840 --> 00:24:21,679
Speaker 1: a tree that falls through your roof and it just

560
00:24:21,760 --> 00:24:23,920
Speaker 1: ruins your day and potentially months of your life while

561
00:24:23,920 --> 00:24:25,680
Speaker 1: you're trying to, like work with the insurance company get

562
00:24:25,680 --> 00:24:26,199
Speaker 1: that figured out.

563
00:24:26,240 --> 00:24:27,760
Speaker 2: Do you want to give folks a little update as

564
00:24:27,800 --> 00:24:30,680
Speaker 2: to where things are at the given moment with.

565
00:24:30,640 --> 00:24:33,480
Speaker 1: Your Construction is just about to begin, okay, which feels

566
00:24:33,480 --> 00:24:37,200
Speaker 1: like it's taking a long time to do that, but.

567
00:24:36,440 --> 00:24:38,200
Speaker 2: It has been a long time. But I mean that's

568
00:24:38,240 --> 00:24:41,119
Speaker 2: the they've ripped out. Fortunately, that's the insurance. They've ripped out.

569
00:24:40,960 --> 00:24:42,359
Speaker 1: Some of the things that were damaged, and we've been

570
00:24:42,400 --> 00:24:43,880
Speaker 1: living in it, but we're just about to move out.

571
00:24:43,880 --> 00:24:46,520
Speaker 1: Construction is going to begin and hopefully it won't take

572
00:24:46,640 --> 00:24:48,920
Speaker 1: more than a couple of months. Fingers crossed, Fingers crossed,

573
00:24:48,960 --> 00:24:50,240
Speaker 1: But yeah, these are one This is one of the

574
00:24:50,280 --> 00:24:52,720
Speaker 1: things that comes along with home ownership. And granted it'd

575
00:24:52,720 --> 00:24:55,240
Speaker 1: be a pain if you're a renter, but not nearly

576
00:24:55,240 --> 00:24:55,960
Speaker 1: to the same extent.

577
00:24:56,200 --> 00:24:57,800
Speaker 2: And I think you still have to move if you're

578
00:24:57,800 --> 00:25:00,399
Speaker 2: a renter, but you wouldn't. It's just like, Okay, I'm

579
00:25:00,400 --> 00:25:02,879
Speaker 2: gonna find another place, as opposed to having to do

580
00:25:02,960 --> 00:25:06,560
Speaker 2: the work associated with right getting this not just maintaining

581
00:25:06,640 --> 00:25:08,719
Speaker 2: this property, but getting it back to where it was.

582
00:25:09,119 --> 00:25:10,720
Speaker 2: I feel like if I were in your shoes, that

583
00:25:10,720 --> 00:25:13,480
Speaker 2: would be the hardest part is knowing that like you're

584
00:25:13,520 --> 00:25:15,639
Speaker 2: not improving any you're improving it exactly, getting back to

585
00:25:15,880 --> 00:25:17,320
Speaker 2: like we added on the you know, like little screen

586
00:25:17,320 --> 00:25:19,359
Speaker 2: porch on our house whatever, And it's kind of a

587
00:25:19,359 --> 00:25:21,320
Speaker 2: pain of the butt to coordinate with a contractor. But

588
00:25:21,359 --> 00:25:23,320
Speaker 2: there's sort of this prize at the end of the

589
00:25:23,359 --> 00:25:24,800
Speaker 2: tunne where you're like, oh, but it's going to be

590
00:25:24,800 --> 00:25:27,960
Speaker 2: worth it. Yep. I cannot imagine the frustration that you're

591
00:25:27,960 --> 00:25:30,840
Speaker 2: feeling when it comes to just getting back to baseline.

592
00:25:31,040 --> 00:25:32,879
Speaker 1: Yeah, and it's just a part time job of it all. Like,

593
00:25:32,920 --> 00:25:36,240
Speaker 1: that's what That's what smokes me really as I'm just contacting,

594
00:25:36,320 --> 00:25:38,560
Speaker 1: talking to so many people, talking to contractors, the adjuster,

595
00:25:38,840 --> 00:25:40,600
Speaker 1: all that kind of stuff, and I'm just tired of it.

596
00:25:40,840 --> 00:25:42,639
Speaker 1: I'm just like ready for it to be done, so

597
00:25:42,680 --> 00:25:45,359
Speaker 1: hopefully sooner rather than later. I think one other thing though,

598
00:25:45,400 --> 00:25:47,880
Speaker 1: that that gets people, Matt. You're talking about upgrades, You're

599
00:25:47,880 --> 00:25:50,080
Speaker 1: you added on the screen porch. That is something else

600
00:25:50,400 --> 00:25:51,640
Speaker 1: that people when they buy a home.

601
00:25:51,680 --> 00:25:54,239
Speaker 2: Don't you make an example out of me? They all

602
00:25:54,240 --> 00:25:55,760
Speaker 2: of a sudden are like, well, what about this? What

603
00:25:55,840 --> 00:25:57,679
Speaker 2: have I upgrade that? Nah? You know, I can make it.

604
00:25:57,720 --> 00:25:59,480
Speaker 1: I can improve this or that, And that is kind

605
00:25:59,480 --> 00:26:01,480
Speaker 1: of part of the fun of homeownership. But it also

606
00:26:01,520 --> 00:26:03,720
Speaker 1: adds to the cost. It makes me think of the

607
00:26:03,800 --> 00:26:05,359
Speaker 1: Diddero effect, Matt and.

608
00:26:05,640 --> 00:26:08,840
Speaker 2: It just saw the classic French philosopher.

609
00:26:08,359 --> 00:26:11,680
Speaker 1: Right, the eighteenth century French philosopher, and he someone gave

610
00:26:11,760 --> 00:26:14,560
Speaker 1: him or I guess he sold his library for like

611
00:26:14,600 --> 00:26:17,040
Speaker 1: the modern equivalent of fifty thousand dollars, and he lived

612
00:26:17,040 --> 00:26:19,000
Speaker 1: in poverty before that he bought this fancy new row.

613
00:26:19,040 --> 00:26:21,200
Speaker 2: It's more details than I've read in the past.

614
00:26:21,280 --> 00:26:23,600
Speaker 1: Yeah, so I did some more research into it. And

615
00:26:24,040 --> 00:26:26,320
Speaker 1: but in light of this gorgeous new robe, like all

616
00:26:26,400 --> 00:26:28,399
Speaker 1: of his other possessions.

617
00:26:27,920 --> 00:26:28,440
Speaker 2: Just looked into you.

618
00:26:28,480 --> 00:26:30,520
Speaker 1: They look like crap. And so I think that that

619
00:26:30,560 --> 00:26:32,360
Speaker 1: can be the case for a lot of us when

620
00:26:32,400 --> 00:26:35,720
Speaker 1: we when we buy a home, it's like, okay, cool, yes,

621
00:26:35,760 --> 00:26:37,919
Speaker 1: starts with a code of paints, but how far can it? Well,

622
00:26:37,920 --> 00:26:39,920
Speaker 1: I'm replacing the floor is now, or you know what,

623
00:26:39,960 --> 00:26:42,880
Speaker 1: I need a new sofa in here because that's what's

624
00:26:42,880 --> 00:26:44,760
Speaker 1: gonna tie the whole room together, or maybe a rug.

625
00:26:44,760 --> 00:26:45,119
Speaker 2: I don't know.

626
00:26:45,280 --> 00:26:47,040
Speaker 1: But these are the kind of These are the kind

627
00:26:47,080 --> 00:26:48,960
Speaker 1: of things that happened to all of us as homeowners,

628
00:26:49,000 --> 00:26:53,000
Speaker 1: or these subtle psychological polls that cause us to consume

629
00:26:53,520 --> 00:26:56,240
Speaker 1: and maybe our finances start as spiraling out of control

630
00:26:56,400 --> 00:27:00,600
Speaker 1: because we are just coaxed into spending more than we

631
00:27:00,640 --> 00:27:02,560
Speaker 1: would if we were if we'd remained renting.

632
00:27:02,640 --> 00:27:05,679
Speaker 2: Sure. Yeah, well and it's not necessarily too that, like

633
00:27:05,760 --> 00:27:07,760
Speaker 2: maybe you love all your stuff, Like maybe you move

634
00:27:07,760 --> 00:27:10,080
Speaker 2: in and you're just like, my stuff looks great in here.

635
00:27:10,440 --> 00:27:12,840
Speaker 2: I love my house. But then that's the problem, like

636
00:27:12,920 --> 00:27:14,639
Speaker 2: you kind of like what you spend a lot of

637
00:27:14,640 --> 00:27:17,919
Speaker 2: money on a house that's where your dollars flow to.

638
00:27:18,520 --> 00:27:21,320
Speaker 2: It makes sense that someone would take maybe a little

639
00:27:21,400 --> 00:27:23,360
Speaker 2: little bit more pride in their house compared to maybe

640
00:27:23,359 --> 00:27:25,919
Speaker 2: where they're renting before, right, And so like once you

641
00:27:25,960 --> 00:27:28,240
Speaker 2: start having a sense of pride, like you start thinking,

642
00:27:28,240 --> 00:27:30,560
Speaker 2: oh I wanted to look even nicer, it's not necessarily

643
00:27:30,640 --> 00:27:33,920
Speaker 2: that what you have currently, like your previous possessions are

644
00:27:34,880 --> 00:27:37,200
Speaker 2: relatively shabby. It's just that, oh, I want this house

645
00:27:37,280 --> 00:27:39,840
Speaker 2: to be nicer. Sure, right, And so like you know, well,

646
00:27:39,840 --> 00:27:42,000
Speaker 2: I'll use myself as an example again. But for us,

647
00:27:42,040 --> 00:27:44,520
Speaker 2: like the landscaping at our house that we purchased last year,

648
00:27:44,560 --> 00:27:48,040
Speaker 2: it was fine, but we really like to have an

649
00:27:48,080 --> 00:27:51,240
Speaker 2: interesting outdoor area, so we started going down that direction.

650
00:27:51,320 --> 00:27:54,480
Speaker 2: So maybe we felt prey to that. But maybe it's

651
00:27:54,920 --> 00:27:57,960
Speaker 2: you moving into the you know, a house and you're like, oh, well,

652
00:27:58,000 --> 00:28:01,400
Speaker 2: you can't have lambin at countertops. That's just no, that's

653
00:28:01,440 --> 00:28:04,160
Speaker 2: just so nineteen seventies. You know, you got to take

654
00:28:04,160 --> 00:28:06,280
Speaker 2: care of that. Or oh, the carpet over here is

655
00:28:06,760 --> 00:28:08,920
Speaker 2: you can't just a, we can't have carpet, but b

656
00:28:09,080 --> 00:28:11,040
Speaker 2: even if you did have carpet, that's dirty carpet. Right,

657
00:28:11,440 --> 00:28:13,679
Speaker 2: there's no way we're not going to runt a steamer

658
00:28:13,720 --> 00:28:15,480
Speaker 2: and actually clean it. No, no, no, let's just rip it

659
00:28:15,480 --> 00:28:17,360
Speaker 2: out and do hard woods, like you said, double edged

660
00:28:17,359 --> 00:28:18,840
Speaker 2: sort of home ownership. Yes, I think some of it.

661
00:28:18,840 --> 00:28:21,200
Speaker 1: Those improvements can be a blast, and it's really exciting

662
00:28:21,320 --> 00:28:22,720
Speaker 1: to get to kind of create your own space.

663
00:28:22,920 --> 00:28:24,880
Speaker 2: But the flip side of it is it cost you money.

664
00:28:24,920 --> 00:28:26,600
Speaker 1: It can be a money so I can absolutely and

665
00:28:26,680 --> 00:28:28,360
Speaker 1: on top of the fact that you're spending a lot

666
00:28:28,400 --> 00:28:29,760
Speaker 1: more than you would have been if you had been

667
00:28:29,840 --> 00:28:33,120
Speaker 1: running something similar. Also, it's also important to mention math

668
00:28:33,160 --> 00:28:37,000
Speaker 1: that timing is crucial. Timing matters, and every market across

669
00:28:37,000 --> 00:28:39,720
Speaker 1: the country is different. Of course, it's easier to buy

670
00:28:39,760 --> 00:28:42,920
Speaker 1: a home in Mississippi than it is in southern California clearly.

671
00:28:43,280 --> 00:28:47,240
Speaker 1: But market gyrations can change the value proposition meaningfully over

672
00:28:47,320 --> 00:28:50,280
Speaker 1: time too, And so the housing market now is just

673
00:28:50,320 --> 00:28:52,480
Speaker 1: quite a bit different. It looks a lot different than

674
00:28:52,520 --> 00:28:55,600
Speaker 1: it did a few years ago. It's always morphing and changing,

675
00:28:55,640 --> 00:28:58,640
Speaker 1: And so that value proposition that I mentioned, like we

676
00:28:58,640 --> 00:29:02,600
Speaker 1: would change our tune on leasing a car if leasing

677
00:29:02,920 --> 00:29:05,480
Speaker 1: prices were cut in half. Well, the value proposition of

678
00:29:05,480 --> 00:29:08,320
Speaker 1: buying versus renting is different from state to state and

679
00:29:08,840 --> 00:29:11,040
Speaker 1: from market to market as the market evolved. So if

680
00:29:11,040 --> 00:29:13,680
Speaker 1: home ownership is a massive goal for you, it's worth

681
00:29:13,840 --> 00:29:15,880
Speaker 1: it's truly worth asking whether or not you'd be willing

682
00:29:15,920 --> 00:29:18,440
Speaker 1: to move somewhere where the cost of housing isn't as expensive.

683
00:29:18,840 --> 00:29:21,000
Speaker 1: We're all about putting down routes. Stay in one place

684
00:29:21,000 --> 00:29:22,840
Speaker 1: for a long time if you love the place where

685
00:29:22,840 --> 00:29:26,520
Speaker 1: you are, but maybe moving elsewhere to a cheaper market

686
00:29:26,560 --> 00:29:28,479
Speaker 1: makes sense for you if you're priced out where you're

687
00:29:28,520 --> 00:29:32,040
Speaker 1: currently living, or does perpetually renting make the most sense

688
00:29:32,080 --> 00:29:34,080
Speaker 1: if you love where you live and just kind of

689
00:29:34,480 --> 00:29:36,840
Speaker 1: not putting off a dream of home ownership, but maybe

690
00:29:36,880 --> 00:29:38,440
Speaker 1: just being like, hey, maybe that was the wrong dream

691
00:29:38,440 --> 00:29:42,040
Speaker 1: to begin with. Then maybe the real dream is something else,

692
00:29:42,040 --> 00:29:44,600
Speaker 1: and it really is financial independence, which you're going to

693
00:29:44,600 --> 00:29:47,800
Speaker 1: be able to get more easily by renting and investing

694
00:29:47,800 --> 00:29:48,560
Speaker 1: a heck of a lot more.

695
00:29:48,640 --> 00:29:51,320
Speaker 2: That's right. Yeah, So the housing market has changed in

696
00:29:51,360 --> 00:29:54,280
Speaker 2: recent years, and we touched on mortgages earlier more kind

697
00:29:54,280 --> 00:29:57,400
Speaker 2: of from a principal standpoint as to the power that

698
00:29:57,560 --> 00:30:00,760
Speaker 2: it can have if the wins you're back, but the

699
00:30:01,120 --> 00:30:02,720
Speaker 2: problems that you can face if that wind is blown

700
00:30:02,720 --> 00:30:05,760
Speaker 2: in your face. But the specific rates that folks are

701
00:30:05,800 --> 00:30:08,000
Speaker 2: paying right now, like the mortgage rate environment like that

702
00:30:08,120 --> 00:30:10,960
Speaker 2: is also changing the dynamics of home ownership. There was

703
00:30:10,960 --> 00:30:14,080
Speaker 2: an article in the journal just last week about the

704
00:30:14,120 --> 00:30:16,520
Speaker 2: diverging paths of folks who bought a home just a

705
00:30:16,520 --> 00:30:19,280
Speaker 2: few years ago and then the folks who purchased a

706
00:30:19,320 --> 00:30:22,640
Speaker 2: home within the past six to nine months. We've previously

707
00:30:22,680 --> 00:30:26,880
Speaker 2: said to avoid being a quote unquote payment buyer where

708
00:30:26,960 --> 00:30:30,880
Speaker 2: you're only considering the monthly payments, Well that that doesn't

709
00:30:30,880 --> 00:30:34,000
Speaker 2: mean that you should ignore the interest rate altogether, because

710
00:30:34,040 --> 00:30:37,920
Speaker 2: they influence the payment on a home purchase massively. Any

711
00:30:38,080 --> 00:30:39,760
Speaker 2: want to be home buyers out there, they know that

712
00:30:39,800 --> 00:30:42,880
Speaker 2: interest rates aren't their friend right now, about those fluctuations

713
00:30:42,880 --> 00:30:46,280
Speaker 2: they can, and they should. Honestly, they should impact your

714
00:30:46,320 --> 00:30:50,120
Speaker 2: overall price range of homes that you can realistically afford.

715
00:30:50,200 --> 00:30:53,920
Speaker 2: It should change the filters or the parameters as you

716
00:30:53,960 --> 00:30:56,960
Speaker 2: continue your home search if you are seeing rates go up.

717
00:30:57,000 --> 00:30:59,680
Speaker 1: I think interest rates should determine the purchase of a

718
00:30:59,680 --> 00:31:02,400
Speaker 1: whole lot of other things, a whole lot less because oh,

719
00:31:02,400 --> 00:31:03,800
Speaker 1: what's the APR and your credit card?

720
00:31:03,880 --> 00:31:04,320
Speaker 2: Guess what?

721
00:31:04,840 --> 00:31:06,880
Speaker 1: For how to money listeners, it shouldn't have I don't

722
00:31:06,880 --> 00:31:08,760
Speaker 1: care because you should be paying it off on time

723
00:31:08,760 --> 00:31:10,320
Speaker 1: and in full of your month. It doesn't matter if the

724
00:31:10,360 --> 00:31:13,680
Speaker 1: APR my credit card is eighty two percent because I've

725
00:31:13,680 --> 00:31:15,800
Speaker 1: got that set up for auto pay and I'm paying

726
00:31:15,800 --> 00:31:18,320
Speaker 1: the full statement balance. Same thing with a car, like

727
00:31:18,360 --> 00:31:20,120
Speaker 1: I'd rather you not take out a car loan, and

728
00:31:20,160 --> 00:31:22,760
Speaker 1: so it doesn't matter if cash Yeah, we talked about

729
00:31:22,760 --> 00:31:25,080
Speaker 1: really care about car loan? Sure, interest rates on cars

730
00:31:25,240 --> 00:31:27,840
Speaker 1: used the new using new car loans have gone up.

731
00:31:28,040 --> 00:31:30,160
Speaker 1: But the goal is to not have a car payment

732
00:31:30,200 --> 00:31:34,880
Speaker 1: at all. Right, that's but for almost everybody listening, not

733
00:31:35,280 --> 00:31:38,040
Speaker 1: being able to avoid a mortgage is an impossibility. It's

734
00:31:38,040 --> 00:31:39,719
Speaker 1: the same with Matt and I. We've had a mortgage

735
00:31:39,720 --> 00:31:43,360
Speaker 1: on every property. And that's okay, it's just what are

736
00:31:43,400 --> 00:31:46,200
Speaker 1: the terms of that mortgage? They massively influence more than

737
00:31:46,240 --> 00:31:48,360
Speaker 1: any other product, like what you can afford what you

738
00:31:48,360 --> 00:31:51,160
Speaker 1: should be looking at totally. It's also important Matt to

739
00:31:51,160 --> 00:31:54,320
Speaker 1: mention equity and which is it's a different beast than

740
00:31:54,320 --> 00:31:56,719
Speaker 1: money that you've accumulated in the market. And so a

741
00:31:56,760 --> 00:31:59,560
Speaker 1: home is an ill liquid asset, which means it's more

742
00:31:59,600 --> 00:32:02,720
Speaker 1: difficult and often expensive to tap your home equity or

743
00:32:02,760 --> 00:32:04,720
Speaker 1: to ye to come by it in some way form

744
00:32:04,760 --> 00:32:06,680
Speaker 1: or fashion. And so if you do opt to grab

745
00:32:06,720 --> 00:32:09,160
Speaker 1: some of those wealth gains via a home equity line

746
00:32:09,160 --> 00:32:11,320
Speaker 1: of credit or something like that, you start putting the

747
00:32:11,440 --> 00:32:15,080
Speaker 1: asset that keeps a roof over your head at risk. Right,

748
00:32:15,120 --> 00:32:16,959
Speaker 1: And so what do you do with the wealth you

749
00:32:17,000 --> 00:32:20,880
Speaker 1: accumulate in a house? Our advice has always been mostly

750
00:32:20,920 --> 00:32:23,080
Speaker 1: to leave it alone. You might, yes, take some to

751
00:32:23,080 --> 00:32:25,960
Speaker 1: make some small improvements to your house or something like that.

752
00:32:25,960 --> 00:32:28,880
Speaker 1: That is typically the best use of home equity is

753
00:32:28,920 --> 00:32:31,080
Speaker 1: to make improvements when you want to over time. But

754
00:32:31,120 --> 00:32:33,600
Speaker 1: the fact that your net worth has grown because you're

755
00:32:33,680 --> 00:32:36,080
Speaker 1: the equity in your home has grown really shouldn't change

756
00:32:36,080 --> 00:32:38,120
Speaker 1: the way you live your day. To day life, although

757
00:32:38,200 --> 00:32:41,040
Speaker 1: I feel like it can more if you are investing

758
00:32:41,040 --> 00:32:44,120
Speaker 1: in the market and those funds are just easier to access,

759
00:32:44,200 --> 00:32:46,800
Speaker 1: especially if you're investing some of those some of that

760
00:32:46,880 --> 00:32:49,560
Speaker 1: money in like a brokerage account. But Matt, it's not

761
00:32:49,600 --> 00:32:51,719
Speaker 1: all doom and gloom, and we do you and I

762
00:32:51,880 --> 00:32:54,920
Speaker 1: own houses. We own multiple houses because we're landlords as well,

763
00:32:55,200 --> 00:32:58,000
Speaker 1: and so we're not completely against home ownership. We just

764
00:32:58,040 --> 00:32:59,680
Speaker 1: want people, like you said, to go in with eyes

765
00:33:00,080 --> 00:33:02,800
Speaker 1: wide open. Let's talk about the benefits of home ownership,

766
00:33:02,840 --> 00:33:05,640
Speaker 1: and then maybe some of the prerequisites for before you

767
00:33:05,640 --> 00:33:08,040
Speaker 1: start looking to buy a home, where we think you

768
00:33:08,040 --> 00:33:10,560
Speaker 1: should be financially before you start that search. We'll get

769
00:33:10,560 --> 00:33:12,080
Speaker 1: to that and more right after this.

770
00:33:21,720 --> 00:33:23,880
Speaker 2: All right, we are back in jil You know, we

771
00:33:23,920 --> 00:33:26,520
Speaker 2: have dunked on home buying quite a bit. But the

772
00:33:26,560 --> 00:33:30,040
Speaker 2: truth is we mostly like owning our own homes, even

773
00:33:30,040 --> 00:33:31,960
Speaker 2: with all the trade offs, with all the downsides that

774
00:33:32,000 --> 00:33:34,960
Speaker 2: we've mentioned. We don't rent, we own our homes.

775
00:33:35,200 --> 00:33:37,040
Speaker 1: So people are like, why aren't they taking their own medicine?

776
00:33:37,480 --> 00:33:38,280
Speaker 1: What's the discount?

777
00:33:38,880 --> 00:33:42,000
Speaker 2: It mostly has to do with the intangibles that you

778
00:33:42,120 --> 00:33:44,680
Speaker 2: experience when you are a homeowner.

779
00:33:44,200 --> 00:33:45,880
Speaker 1: And by the way, not to rub it in or

780
00:33:45,880 --> 00:33:47,680
Speaker 1: anything like that, but we also bought most of our

781
00:33:47,680 --> 00:33:49,920
Speaker 1: homes in a different environment where yeah, the buy to

782
00:33:49,960 --> 00:33:53,360
Speaker 1: rent ratio was significantly different, absolutely, and so that changed.

783
00:33:54,000 --> 00:33:57,640
Speaker 1: But I think now I would I would certainly be

784
00:33:57,680 --> 00:33:58,720
Speaker 1: thinking twice much more.

785
00:33:59,120 --> 00:34:01,320
Speaker 2: I'll be looking at the rent market. But that being said,

786
00:34:01,440 --> 00:34:03,760
Speaker 2: one of the reasons that we were like it wasn't

787
00:34:03,840 --> 00:34:07,720
Speaker 2: just financial reasons though right like it made sense from

788
00:34:07,760 --> 00:34:10,879
Speaker 2: like a lifestyle standpoint, there are these intangibles, and when

789
00:34:10,920 --> 00:34:12,960
Speaker 2: you own your own place, you've got a little more

790
00:34:12,960 --> 00:34:16,240
Speaker 2: stability at home. Right Like, you know that there isn't

791
00:34:16,480 --> 00:34:19,799
Speaker 2: a landlord out there who might either drastically raise rent

792
00:34:19,840 --> 00:34:22,120
Speaker 2: on you or even just kick you out because they've

793
00:34:22,120 --> 00:34:25,040
Speaker 2: decided to sell the place because how values have shot

794
00:34:25,040 --> 00:34:27,120
Speaker 2: through the roof and it's time for them to cash out.

795
00:34:27,400 --> 00:34:29,800
Speaker 2: So if you decide to stay in that home long term,

796
00:34:30,000 --> 00:34:32,640
Speaker 2: you just know where you're going to be a decade

797
00:34:32,719 --> 00:34:35,000
Speaker 2: or two from now. With when it comes to renting,

798
00:34:35,040 --> 00:34:37,279
Speaker 2: not so much. You might know where you're going to

799
00:34:37,320 --> 00:34:40,080
Speaker 2: be for the next ten months, but beyond that, who knows.

800
00:34:40,280 --> 00:34:42,239
Speaker 1: Yeah, I do think that that is one of the

801
00:34:42,239 --> 00:34:44,960
Speaker 1: biggest benefits the putting down roots, the knowing where you're

802
00:34:45,000 --> 00:34:47,000
Speaker 1: going to be, especially if that's where you want to

803
00:34:47,040 --> 00:34:49,040
Speaker 1: be and you don't want to leave. I know people

804
00:34:49,040 --> 00:34:51,040
Speaker 1: who have been long term tenants in certain places. I

805
00:34:51,080 --> 00:34:53,200
Speaker 1: had a neighbor two doors down back when we lived

806
00:34:53,239 --> 00:34:55,920
Speaker 1: in town, Matt and his landlord sold the house and

807
00:34:55,960 --> 00:34:58,000
Speaker 1: he had been there for like fourteen or fifteen years,

808
00:34:58,120 --> 00:34:59,920
Speaker 1: and he was devastated because he couldn't afford to buy

809
00:34:59,920 --> 00:35:01,960
Speaker 1: it and he had to find somewhere else to live.

810
00:35:02,040 --> 00:35:04,319
Speaker 1: But he had like buy in, he had stake in

811
00:35:04,320 --> 00:35:06,360
Speaker 1: that neighborhood, and I was so sad to see him go.

812
00:35:06,400 --> 00:35:08,040
Speaker 1: I was like, I wish I had like an adu

813
00:35:08,040 --> 00:35:09,799
Speaker 1: in the backyard, man that you could live in. But

814
00:35:10,320 --> 00:35:13,680
Speaker 1: that is that there are a lot of renters who

815
00:35:13,760 --> 00:35:15,919
Speaker 1: do want that sort of buy in, but they aren't

816
00:35:15,960 --> 00:35:18,600
Speaker 1: guaranteed it right if they're renting and not owning. And

817
00:35:18,640 --> 00:35:22,320
Speaker 1: so I think another perk of home ownership is customization abilities.

818
00:35:22,320 --> 00:35:23,960
Speaker 1: We kind of talked about the downsides of that with

819
00:35:24,000 --> 00:35:27,320
Speaker 1: like the Dittero effect and how it could be expensive, sure,

820
00:35:27,480 --> 00:35:29,240
Speaker 1: but it's also one of the most joyous things about

821
00:35:29,239 --> 00:35:31,560
Speaker 1: owning a home. Right you're being able to transform that

822
00:35:31,600 --> 00:35:34,640
Speaker 1: space and turning it into the place you want to live.

823
00:35:34,760 --> 00:35:38,120
Speaker 1: And really, like, if you're renting, yeah, you can ask

824
00:35:38,160 --> 00:35:40,400
Speaker 1: your landlord about painting or putting up some wallpaper or

825
00:35:40,440 --> 00:35:42,560
Speaker 1: something like that, but they might say no. And even

826
00:35:42,560 --> 00:35:44,719
Speaker 1: that is just kind of a basic adjustment.

827
00:35:44,760 --> 00:35:45,600
Speaker 2: But yeah, you're.

828
00:35:45,440 --> 00:35:47,240
Speaker 1: Surely not going to be able to knock down walls

829
00:35:47,320 --> 00:35:50,239
Speaker 1: or alter the layout or modify the space well, and

830
00:35:50,320 --> 00:35:52,480
Speaker 1: you wouldn't want to, right because you, like, you wouldn't

831
00:35:52,480 --> 00:35:54,600
Speaker 1: want to spend that much money because you know that there's.

832
00:35:54,440 --> 00:35:56,239
Speaker 2: A chance I might only be here for a year

833
00:35:56,360 --> 00:35:59,520
Speaker 2: or two. Like this, Like, you are entering into that

834
00:35:59,680 --> 00:36:02,759
Speaker 2: how arrangement with a temporary mindset, and when you do that,

835
00:36:03,080 --> 00:36:05,959
Speaker 2: you're not really willing to put forth the resources, whether

836
00:36:05,960 --> 00:36:08,720
Speaker 2: it's time or money, in order to make it feel

837
00:36:09,080 --> 00:36:11,000
Speaker 2: a little bit more like home. I honestly, I think

838
00:36:11,040 --> 00:36:15,839
Speaker 2: that's one of the downsides of renting, And I don't

839
00:36:15,880 --> 00:36:17,239
Speaker 2: want to put it in a negative light, so I'll

840
00:36:17,239 --> 00:36:19,720
Speaker 2: say it's one of the upsides of owning your home

841
00:36:20,200 --> 00:36:22,160
Speaker 2: is that it can I think it can have a

842
00:36:22,400 --> 00:36:26,320
Speaker 2: more positive impact on maybe the depth of relationships or

843
00:36:26,360 --> 00:36:28,880
Speaker 2: the amount of community that you're able to build up

844
00:36:28,880 --> 00:36:30,800
Speaker 2: around you. Because if you are, say you're just renting

845
00:36:30,800 --> 00:36:32,400
Speaker 2: a house, and you're thinking, all right, I'm you know,

846
00:36:32,440 --> 00:36:34,680
Speaker 2: I'll live here for maybe twelve months, maybe I'll push

847
00:36:34,760 --> 00:36:37,200
Speaker 2: that out to eighteen, maybe even twenty four months. We'll see.

848
00:36:37,600 --> 00:36:40,440
Speaker 2: I think when you enter into that that mindset, with

849
00:36:40,800 --> 00:36:43,320
Speaker 2: a transient mindset, I don't think you're going to be

850
00:36:43,360 --> 00:36:46,879
Speaker 2: as willing to build relationships. Right, Like the people who

851
00:36:46,880 --> 00:36:49,359
Speaker 2: live on your street, they're your neighbors, and you might

852
00:36:49,360 --> 00:36:50,920
Speaker 2: not be doing it on purpose. It's just like a

853
00:36:51,000 --> 00:36:54,680
Speaker 2: subtle sex exactly exactly, yeah, one pc. But if you

854
00:36:54,680 --> 00:36:56,200
Speaker 2: were to buy that home, the people who live on

855
00:36:56,239 --> 00:36:59,360
Speaker 2: your street, they are potential friends, you know, it's like,

856
00:36:59,680 --> 00:37:03,400
Speaker 2: oh not only friends, yeah, and like friends and resources

857
00:37:03,440 --> 00:37:06,400
Speaker 2: and teachers, and it just it feels there's I don't know,

858
00:37:06,440 --> 00:37:08,360
Speaker 2: it's like I'm trying to be approach it from like

859
00:37:08,360 --> 00:37:11,280
Speaker 2: a wholesome kind of There is a change that happens,

860
00:37:11,320 --> 00:37:12,600
Speaker 2: and like you said, it may not even be all

861
00:37:12,640 --> 00:37:14,719
Speaker 2: that intentional. But when you know in the back of

862
00:37:14,719 --> 00:37:16,640
Speaker 2: your mind that you may not be there for that long,

863
00:37:16,760 --> 00:37:19,280
Speaker 2: well why not spend your time and energy on something

864
00:37:19,320 --> 00:37:23,279
Speaker 2: else that isn't tied geographically to a location, right, like

865
00:37:23,280 --> 00:37:25,000
Speaker 2: you would spend maybe some of your extra time and

866
00:37:25,120 --> 00:37:28,279
Speaker 2: energy on your career because guess what, if you were

867
00:37:28,320 --> 00:37:31,040
Speaker 2: to up and move on, you take your career with you.

868
00:37:31,040 --> 00:37:33,840
Speaker 2: It doesn't necessarily have to do with that particular house.

869
00:37:34,160 --> 00:37:37,720
Speaker 1: Yes, I think that is a big plus in favor

870
00:37:37,760 --> 00:37:39,440
Speaker 1: of buying a house. You know where you're going to be,

871
00:37:39,760 --> 00:37:41,399
Speaker 1: you know who your neighbors is going to be. I mean, yeah,

872
00:37:41,440 --> 00:37:42,680
Speaker 1: some of them are going to move on too, but

873
00:37:42,719 --> 00:37:45,840
Speaker 1: it's it looks a lot different for sure, and you

874
00:37:45,960 --> 00:37:48,200
Speaker 1: enter into it with a different mindset, and I don't know,

875
00:37:48,200 --> 00:37:50,480
Speaker 1: I think that's powerful. But let's talk about some of

876
00:37:50,480 --> 00:37:52,800
Speaker 1: the prerequisites, some of the things that we want people

877
00:37:52,840 --> 00:37:56,120
Speaker 1: to consider and to think through before they kind of

878
00:37:56,280 --> 00:37:59,640
Speaker 1: start perusing Zillo, find an agent and start trying to

879
00:37:59,640 --> 00:38:02,239
Speaker 1: get pre qualified. And so yeah, even though we've spent

880
00:38:02,280 --> 00:38:05,440
Speaker 1: the majority of this episode really kind of discussing the

881
00:38:05,440 --> 00:38:08,400
Speaker 1: dirty truths of home ownership and much less time discussing

882
00:38:08,400 --> 00:38:11,480
Speaker 1: the pros of it, those benefits can be so incredibly

883
00:38:11,520 --> 00:38:14,040
Speaker 1: powerful that they can be enough to push you in

884
00:38:14,040 --> 00:38:17,120
Speaker 1: the buying direction. So let's discuss what an aspiring homeowner

885
00:38:17,239 --> 00:38:20,040
Speaker 1: needs to consider really before they start making offers, right,

886
00:38:20,680 --> 00:38:23,759
Speaker 1: and the first, the number one piece of this mat

887
00:38:23,920 --> 00:38:26,520
Speaker 1: is understanding how long you plan to own the home.

888
00:38:26,800 --> 00:38:29,560
Speaker 1: That's got to be the top factor, right, And like

889
00:38:29,840 --> 00:38:32,000
Speaker 1: five to seven years is a good rule of thumb,

890
00:38:32,040 --> 00:38:34,000
Speaker 1: but given where home prices are right now, I want

891
00:38:34,040 --> 00:38:37,440
Speaker 1: to extend, maybe go to the longer side of that timeline,

892
00:38:37,440 --> 00:38:40,120
Speaker 1: maybe more like seven or eight years. Because if you're

893
00:38:40,120 --> 00:38:42,600
Speaker 1: buying a home and hopes it's going to appreciate in

894
00:38:42,640 --> 00:38:45,600
Speaker 1: the next two or three years like homes have over

895
00:38:45,640 --> 00:38:47,640
Speaker 1: the past few years, you might think, oh cool, I'm

896
00:38:47,640 --> 00:38:48,759
Speaker 1: going to make out like a bandit. I'm going to

897
00:38:48,800 --> 00:38:50,400
Speaker 1: buy this home. I can barely afford it. But if

898
00:38:50,440 --> 00:38:52,160
Speaker 1: I can afford it for twenty four months and then

899
00:38:52,239 --> 00:38:54,759
Speaker 1: flip it, I'm going to be just fine. Well, the

900
00:38:54,880 --> 00:38:57,879
Speaker 1: likelihood that you get burned goes up so much more

901
00:38:58,040 --> 00:38:59,120
Speaker 1: if you're approaching a home.

902
00:38:59,000 --> 00:38:59,560
Speaker 2: Purchase like that.

903
00:39:00,040 --> 00:39:02,880
Speaker 1: So time is your friend on even if you overpay

904
00:39:02,920 --> 00:39:04,879
Speaker 1: a little bit, that's okay, as long as you plan

905
00:39:05,000 --> 00:39:07,200
Speaker 1: to stay in that home for a long enough period

906
00:39:07,200 --> 00:39:10,000
Speaker 1: of time to make up for that slide amount where

907
00:39:10,040 --> 00:39:11,880
Speaker 1: you overpaid. Right, Like, the longer you can commit to

908
00:39:11,920 --> 00:39:14,239
Speaker 1: owning that home, the better decision it's likely to be.

909
00:39:14,360 --> 00:39:16,000
Speaker 2: Yeah, well, and you said owning that home. I think

910
00:39:16,040 --> 00:39:19,080
Speaker 2: there's a difference too, between owning that home and living

911
00:39:19,080 --> 00:39:20,839
Speaker 2: in that home, because as long as you own it,

912
00:39:21,200 --> 00:39:24,160
Speaker 2: then it's like it's okay for you to not necessarily

913
00:39:24,200 --> 00:39:27,719
Speaker 2: continue living in there. And so what I'm hinting at

914
00:39:27,800 --> 00:39:32,719
Speaker 2: here is converting that primary residence into an investment property. Joel,

915
00:39:32,760 --> 00:39:35,960
Speaker 2: that was like your first investment property happened to be

916
00:39:35,960 --> 00:39:38,480
Speaker 2: the first house that you purchased as your primary residence,

917
00:39:38,480 --> 00:39:41,960
Speaker 2: and my second rental property was a second round exactly. Yeah, yeah, mine,

918
00:39:42,160 --> 00:39:44,040
Speaker 2: we really liked our first home and then we ended

919
00:39:44,120 --> 00:39:47,719
Speaker 2: up actually buying separate investment properties. But that can be

920
00:39:47,760 --> 00:39:50,439
Speaker 2: a next one. It's not about you necessarily living there.

921
00:39:50,560 --> 00:39:54,439
Speaker 2: It's about you maintaining that ownership because the transaction costs

922
00:39:54,440 --> 00:39:56,840
Speaker 2: are so stinking high, and if you have an ability

923
00:39:56,880 --> 00:39:59,440
Speaker 2: to amortize that, if you have an ability to stretch

924
00:39:59,480 --> 00:40:03,279
Speaker 2: those expenses outs over a longer period of time, all

925
00:40:03,320 --> 00:40:06,600
Speaker 2: the while, hopefully the while the value of a home

926
00:40:06,719 --> 00:40:09,799
Speaker 2: is continuing to rise, you're gonna end up in a

927
00:40:09,840 --> 00:40:13,920
Speaker 2: stronger position from a financial standpoint. But also, let's talk

928
00:40:13,960 --> 00:40:17,760
Speaker 2: about the down payment required because three quarters of folks

929
00:40:17,920 --> 00:40:20,400
Speaker 2: who want to buy a home, they haven't even saved

930
00:40:20,560 --> 00:40:24,360
Speaker 2: a dime. That doesn't bode well. If you can't save

931
00:40:24,480 --> 00:40:26,719
Speaker 2: up a meaningful and down payment, then how are you

932
00:40:26,760 --> 00:40:29,080
Speaker 2: gonna be able to afford some of those other increased

933
00:40:29,080 --> 00:40:31,680
Speaker 2: costs that we just talked about, some of those unexpected costs.

934
00:40:31,360 --> 00:40:33,720
Speaker 1: For folks who can't save a down payment. I realize

935
00:40:33,760 --> 00:40:35,799
Speaker 1: it's difficult and it's a large sum of money, but

936
00:40:36,360 --> 00:40:38,000
Speaker 1: that's what I always come back to, is like, cool,

937
00:40:38,239 --> 00:40:40,680
Speaker 1: if you can't do this, if you can't find the

938
00:40:40,719 --> 00:40:42,680
Speaker 1: skin to give in the game, how are you gonna

939
00:40:42,680 --> 00:40:45,640
Speaker 1: be able to afford the increased costs every single month,

940
00:40:45,680 --> 00:40:47,040
Speaker 1: every single year for years to come.

941
00:40:47,120 --> 00:40:48,920
Speaker 2: Yeah. Well, and we didn't even talk about some of

942
00:40:48,960 --> 00:40:51,759
Speaker 2: like the more like phantom hidden costs of like a

943
00:40:51,920 --> 00:40:55,240
Speaker 2: potential hoa or the fact that most homes are probably

944
00:40:55,480 --> 00:40:57,279
Speaker 2: they tend to be a little bit larger than the

945
00:40:57,320 --> 00:40:59,280
Speaker 2: little apartment that you're running. So you're talking about increased

946
00:40:59,320 --> 00:41:03,360
Speaker 2: utility calls, you're talking about taxes, the property taxes because

947
00:41:03,360 --> 00:41:06,080
Speaker 2: you're buying an up and coming part of town, and

948
00:41:06,160 --> 00:41:08,080
Speaker 2: guess what, the fact that you even bought that house

949
00:41:08,280 --> 00:41:12,880
Speaker 2: guarantees almost guarantees. I should say that the estimated value

950
00:41:12,880 --> 00:41:16,000
Speaker 2: of that home is more than what it was, you know,

951
00:41:16,040 --> 00:41:17,719
Speaker 2: with the tax records show previously.

952
00:41:17,760 --> 00:41:20,799
Speaker 1: I've talked to a lot of neighbors in nearby who

953
00:41:20,840 --> 00:41:22,640
Speaker 1: own a home and they're like, you just get that

954
00:41:22,640 --> 00:41:24,400
Speaker 1: tax bill because this is like the season to get them.

955
00:41:24,400 --> 00:41:27,600
Speaker 1: Oh yeah, And they're.

956
00:41:26,440 --> 00:41:28,200
Speaker 2: Looking at you and they're like, dang you, Joel for

957
00:41:28,320 --> 00:41:30,319
Speaker 2: spending that much on their house because it raises the

958
00:41:30,400 --> 00:41:32,160
Speaker 2: value of all well the house, and their faces were

959
00:41:32,200 --> 00:41:32,640
Speaker 2: pale white.

960
00:41:32,640 --> 00:41:36,000
Speaker 1: But all my rental friends living in complete happiness, and

961
00:41:36,000 --> 00:41:38,120
Speaker 1: they're not even thinking about that stuff. And not that

962
00:41:38,160 --> 00:41:41,239
Speaker 1: taxes don't influence the price of rentals. They do, but

963
00:41:41,280 --> 00:41:43,440
Speaker 1: not to the same extent. There's still just this massive

964
00:41:43,440 --> 00:41:45,840
Speaker 1: discrepancy right now in so much of the country between

965
00:41:45,920 --> 00:41:48,680
Speaker 1: rental prices and what you would be shelling out every

966
00:41:48,680 --> 00:41:50,880
Speaker 1: month to buy a home. And I think a lot

967
00:41:50,920 --> 00:41:53,399
Speaker 1: of people think, well, the landlord's going to be able

968
00:41:53,440 --> 00:41:55,920
Speaker 1: to just boost rent by the amount that the taxes

969
00:41:55,960 --> 00:41:58,360
Speaker 1: go up, and they might try, but if it's not

970
00:41:58,400 --> 00:42:00,080
Speaker 1: competitive in the market, they won't be able to.

971
00:42:00,640 --> 00:42:05,640
Speaker 2: It's a slow boost. It's a gradual, slow moving freight train.

972
00:42:06,400 --> 00:42:09,439
Speaker 2: But for all the aspiring homeowners out there, we would

973
00:42:09,480 --> 00:42:12,719
Speaker 2: love to see you put down twenty percent, which we'll

974
00:42:12,719 --> 00:42:14,720
Speaker 2: often like that's going to net you the best rates

975
00:42:14,760 --> 00:42:18,840
Speaker 2: in terms while also whittling down those payments. But again

976
00:42:19,200 --> 00:42:22,680
Speaker 2: we understand that that can be an incredible sum of money.

977
00:42:22,719 --> 00:42:25,759
Speaker 2: And so if you're a first time home buyer, we'll

978
00:42:25,800 --> 00:42:28,040
Speaker 2: say that it is okay to put down less, but

979
00:42:28,320 --> 00:42:31,560
Speaker 2: saving up a meaningful chunk is just a necessity no

980
00:42:31,640 --> 00:42:33,160
Speaker 2: matter what. We want to make sure that you've got

981
00:42:33,239 --> 00:42:36,600
Speaker 2: skin in the game, while simultaneously unders like we understand

982
00:42:36,680 --> 00:42:39,799
Speaker 2: that it's not purely a financial decision that drives whether

983
00:42:39,920 --> 00:42:41,160
Speaker 2: or not that you can buy a home. There are

984
00:42:41,200 --> 00:42:44,439
Speaker 2: other life reasons to purchase a home, and we think

985
00:42:44,440 --> 00:42:46,799
Speaker 2: that those can be just as important. It's not just

986
00:42:46,840 --> 00:42:49,279
Speaker 2: about the numbers, it's about what it is that you

987
00:42:49,280 --> 00:42:50,000
Speaker 2: want your life to look like.

988
00:42:50,080 --> 00:42:52,440
Speaker 1: I wouldn't make an idiotic financial decision because of those

989
00:42:52,480 --> 00:42:55,600
Speaker 1: life decisions, but correct those certainly way in and you

990
00:42:55,680 --> 00:42:58,440
Speaker 1: might be willing to trade off some of those some

991
00:42:58,520 --> 00:43:01,719
Speaker 1: of those financial things. It might mean, hey, you're going

992
00:43:01,760 --> 00:43:03,120
Speaker 1: out to eat less or something like that. That's a

993
00:43:03,120 --> 00:43:05,359
Speaker 1: worthwhile trade off, right to own a home if that's

994
00:43:05,400 --> 00:43:07,120
Speaker 1: what you really want and if you found the right

995
00:43:07,120 --> 00:43:09,560
Speaker 1: place to settle down. But it's also important to know that.

996
00:43:09,680 --> 00:43:11,680
Speaker 1: And by the way, Matt, you mentioned the down payment. Yeah,

997
00:43:11,719 --> 00:43:13,319
Speaker 1: you got to save that up. But at the same time,

998
00:43:13,600 --> 00:43:16,439
Speaker 1: you have to keep that emergency fund on hand even

999
00:43:16,520 --> 00:43:17,600
Speaker 1: as you're buying that home, right.

1000
00:43:17,560 --> 00:43:21,319
Speaker 2: Yeah, yeah, don't tap into that, like, keep that margin on.

1001
00:43:21,320 --> 00:43:23,480
Speaker 1: Hand because, like we said, cost likely to go up.

1002
00:43:23,520 --> 00:43:24,920
Speaker 1: You might want to do some things to the house,

1003
00:43:24,960 --> 00:43:27,359
Speaker 1: but what if you lost your job two months after

1004
00:43:27,360 --> 00:43:29,400
Speaker 1: buying that home. You want to make sure that you

1005
00:43:29,920 --> 00:43:33,360
Speaker 1: haven't depleted your emergency fund completely in an effort just

1006
00:43:33,440 --> 00:43:36,239
Speaker 1: to get your hands on that house, right, And so yeah,

1007
00:43:36,760 --> 00:43:39,080
Speaker 1: plan for at least three months worth of living expenses

1008
00:43:39,480 --> 00:43:41,920
Speaker 1: even after all the costs you're going to incur when

1009
00:43:41,960 --> 00:43:43,879
Speaker 1: you close on that house that you're buying.

1010
00:43:43,920 --> 00:43:46,360
Speaker 2: Yeah, don't forget all like the prepaids, because a lot

1011
00:43:46,400 --> 00:43:48,040
Speaker 2: of times you'll be like, oh, yeah, the tax bill

1012
00:43:48,080 --> 00:43:50,480
Speaker 2: comes out in March and you're buying the summer, so

1013
00:43:50,640 --> 00:43:52,360
Speaker 2: we're actually going to pro rate and there's gonna be

1014
00:43:52,400 --> 00:43:54,279
Speaker 2: six months worth of taxes that you have to come

1015
00:43:54,280 --> 00:43:56,359
Speaker 2: to the table with and you're like, wait, what, that's

1016
00:43:56,360 --> 00:43:58,759
Speaker 2: so much of thousands of dollars that you weren't necessarily

1017
00:43:58,840 --> 00:44:01,480
Speaker 2: expecting to pay. Those are the kind of expenses that

1018
00:44:01,880 --> 00:44:03,600
Speaker 2: kind of it seems like that they just kind of

1019
00:44:03,600 --> 00:44:04,920
Speaker 2: pop out of nowhere that you have.

1020
00:44:05,040 --> 00:44:07,040
Speaker 1: That's why you got like that stat about I think

1021
00:44:07,040 --> 00:44:08,919
Speaker 1: it was seventy seven percent of people not having saved

1022
00:44:08,920 --> 00:44:10,919
Speaker 1: a dime when they want to buy a home. It's

1023
00:44:10,960 --> 00:44:14,239
Speaker 1: so sobering because I'm like, there's all of these ancillary

1024
00:44:14,239 --> 00:44:16,120
Speaker 1: costs that come along with it. And if you haven't

1025
00:44:16,120 --> 00:44:18,280
Speaker 1: even thought about the down payment, if you haven't started

1026
00:44:18,480 --> 00:44:22,120
Speaker 1: day one putting money aside for it, you're so far

1027
00:44:22,160 --> 00:44:24,440
Speaker 1: off from being ready to do that. Maybe it's just

1028
00:44:24,600 --> 00:44:27,680
Speaker 1: pie in the sky hope for people. Hey, yes, someday

1029
00:44:27,719 --> 00:44:29,680
Speaker 1: down the line, I'd like to own a home, But

1030
00:44:29,719 --> 00:44:31,680
Speaker 1: if you want that goal to become a reality, you

1031
00:44:31,719 --> 00:44:33,879
Speaker 1: got to start setting money aside for it right now.

1032
00:44:33,960 --> 00:44:35,560
Speaker 2: That's right. Yeah, the last thing that you want to

1033
00:44:35,600 --> 00:44:38,120
Speaker 2: do is just buy a house, move into a home

1034
00:44:38,239 --> 00:44:41,319
Speaker 2: that you were barely able to afford. Then you're hit with,

1035
00:44:41,480 --> 00:44:44,120
Speaker 2: you know, a bunch of unexpected expenses that just leave

1036
00:44:44,200 --> 00:44:47,120
Speaker 2: you incredibly financially vulnerable, like you mentioned getting laid off

1037
00:44:47,120 --> 00:44:48,839
Speaker 2: from a job, or like what if you get sick

1038
00:44:49,200 --> 00:44:51,239
Speaker 2: and you have a high deductible plan and you got

1039
00:44:51,239 --> 00:44:55,000
Speaker 2: to reach a ten thousand, eleven thousand dollars deductible before

1040
00:44:55,280 --> 00:44:57,279
Speaker 2: the insurance kicks in, like that kind of thing, and

1041
00:44:57,320 --> 00:44:59,160
Speaker 2: you can't to you need a plan for it, and

1042
00:44:59,239 --> 00:45:00,600
Speaker 2: you needn't need that margin.

1043
00:45:00,400 --> 00:45:02,920
Speaker 1: Needs to be there, and you can't plan fully for everything,

1044
00:45:03,000 --> 00:45:05,319
Speaker 1: of course, right if that's what some insurance products are

1045
00:45:05,320 --> 00:45:07,279
Speaker 1: there to help you with, but it's also true that

1046
00:45:07,360 --> 00:45:09,839
Speaker 1: you can't. There's not really an insurance product for losing

1047
00:45:09,880 --> 00:45:11,480
Speaker 1: your job and not be able to pay your mortgage.

1048
00:45:11,520 --> 00:45:13,600
Speaker 2: Yeah, and at the very least, like in my mind,

1049
00:45:13,680 --> 00:45:17,239
Speaker 2: this is a non negotiable having the emergency fund set aside,

1050
00:45:17,280 --> 00:45:19,200
Speaker 2: because like when it comes to the down payment, it's

1051
00:45:19,239 --> 00:45:21,280
Speaker 2: not ideal, but it's okay for you to not necessarily

1052
00:45:21,280 --> 00:45:23,600
Speaker 2: have that twenty percent even though that's one hundred percent ideal,

1053
00:45:23,840 --> 00:45:25,960
Speaker 2: because if you aren't able to put down that full

1054
00:45:25,960 --> 00:45:29,000
Speaker 2: twenty percent, it means, yeah, your mortgage rate, it may

1055
00:45:29,040 --> 00:45:31,440
Speaker 2: not be the absolute most competitive rate, but it's going

1056
00:45:31,480 --> 00:45:34,279
Speaker 2: to be pretty dan close to what most lenders are

1057
00:45:34,320 --> 00:45:36,319
Speaker 2: offering for a twenty percent down and you're gonna have

1058
00:45:36,320 --> 00:45:38,560
Speaker 2: to pay a little bit extra for PMI, right, But

1059
00:45:38,600 --> 00:45:40,400
Speaker 2: like at the end of the day, we're talking about

1060
00:45:40,520 --> 00:45:44,600
Speaker 2: like a few percent. Right. But let's say you get fired.

1061
00:45:44,680 --> 00:45:48,799
Speaker 2: Let's say all of these unexpected expenses hit you all

1062
00:45:48,920 --> 00:45:50,680
Speaker 2: at the same time, and you don't have the cash

1063
00:45:50,719 --> 00:45:54,360
Speaker 2: on hand to get by, and you turn their credit cards.

1064
00:45:54,400 --> 00:45:56,319
Speaker 2: What's the interest rate on those bad boys? You're talking

1065
00:45:56,400 --> 00:46:01,120
Speaker 2: like twenty percent, And so there's a drastic difference between saying, Okay,

1066
00:46:01,120 --> 00:46:03,399
Speaker 2: it's not the most ideal thing to not put down

1067
00:46:03,440 --> 00:46:07,160
Speaker 2: twenty percent, but the difference between you know, a few

1068
00:46:07,200 --> 00:46:09,400
Speaker 2: percent versus like twenty percent that you're paying when it

1069
00:46:09,400 --> 00:46:12,360
Speaker 2: comes to credit cards, that's a big old stinking spread.

1070
00:46:12,520 --> 00:46:13,880
Speaker 2: And we want to make sure that you are not

1071
00:46:14,880 --> 00:46:17,279
Speaker 2: entering into a situation that could leave you vulnerable to

1072
00:46:17,320 --> 00:46:17,960
Speaker 2: that twenty percent.

1073
00:46:18,080 --> 00:46:20,240
Speaker 1: Yeah, and the emergency fund is really there to insulate

1074
00:46:20,280 --> 00:46:22,239
Speaker 1: you from ever having to tap credit cards in a

1075
00:46:22,280 --> 00:46:26,560
Speaker 1: way that is not just not ideal but really.

1076
00:46:26,280 --> 00:46:29,279
Speaker 2: Crappy, very harmful to your financial health. Yeah. Yeah. And

1077
00:46:29,680 --> 00:46:31,439
Speaker 2: the other thing too, with like PMI, like that's something

1078
00:46:31,440 --> 00:46:33,799
Speaker 2: that you can, you know, after you can come back

1079
00:46:33,840 --> 00:46:35,440
Speaker 2: to that and get that thing pulled.

1080
00:46:35,160 --> 00:46:37,960
Speaker 1: Off so it can be a temporary expense exactly. Yeah,

1081
00:46:38,040 --> 00:46:40,600
Speaker 1: all right, So basically the whole goal of this episode

1082
00:46:40,680 --> 00:46:43,719
Speaker 1: is to challenge assumptions, right, and it makes me think, Matt, like,

1083
00:46:43,760 --> 00:46:45,440
Speaker 1: which came first, the chicken or the egg? That is

1084
00:46:46,120 --> 00:46:48,160
Speaker 1: a question that no one knows the answer to.

1085
00:46:48,280 --> 00:46:48,440
Speaker 2: Right.

1086
00:46:48,719 --> 00:46:51,880
Speaker 1: But according to Pew research, ninety six percent of folks

1087
00:46:51,880 --> 00:46:54,080
Speaker 1: in the top ten percent of net worth own their

1088
00:46:54,080 --> 00:46:56,200
Speaker 1: home instead of renting. But is it the home that

1089
00:46:56,239 --> 00:46:58,640
Speaker 1: makes you rich? Or do rich people tend to buy homes?

1090
00:46:58,680 --> 00:46:58,759
Speaker 2: Like?

1091
00:46:58,960 --> 00:47:00,680
Speaker 1: And I think the latter tends to be true to

1092
00:47:00,680 --> 00:47:04,200
Speaker 1: a certain degree. And a circle has no end Joel, Right, yeah,

1093
00:47:04,400 --> 00:47:07,400
Speaker 1: and so I don't know. We've used that reality to

1094
00:47:07,440 --> 00:47:10,000
Speaker 1: create a different narrative, right, one that centers around the

1095
00:47:10,000 --> 00:47:13,520
Speaker 1: home purchase making people rich, creating a wealth exactly. And

1096
00:47:13,560 --> 00:47:16,799
Speaker 1: depending on the specific location and purchasing climate, it has

1097
00:47:16,800 --> 00:47:20,160
Speaker 1: helped fuel the net worth of buyers, specifically who purchased

1098
00:47:20,280 --> 00:47:23,640
Speaker 1: two to twelve years ago. Those people have done incredibly well.

1099
00:47:23,840 --> 00:47:26,240
Speaker 1: But expecting that to continue to be the case given

1100
00:47:26,560 --> 00:47:30,120
Speaker 1: the amount of upward movement we've seen in the housing market,

1101
00:47:30,360 --> 00:47:33,480
Speaker 1: for home ownership to be what pushes you towards financial

1102
00:47:33,480 --> 00:47:37,120
Speaker 1: independence is highly unlikely, and so it's not that it

1103
00:47:37,600 --> 00:47:40,360
Speaker 1: can't be a financial decision that makes sense for your family.

1104
00:47:40,920 --> 00:47:44,480
Speaker 1: Just think twice before you buy into the home ownership

1105
00:47:44,520 --> 00:47:48,160
Speaker 1: equals wealth building. That correlation, i'd say is pretty suspect.

1106
00:47:48,480 --> 00:47:50,680
Speaker 2: Yeah, yeah, totally, And ultimately, I think it just takes

1107
00:47:50,719 --> 00:47:52,840
Speaker 2: a little bit of sacrifice, right, Like, are you willing

1108
00:47:52,880 --> 00:47:55,799
Speaker 2: to give up some other things, including some of your

1109
00:47:56,280 --> 00:47:59,120
Speaker 2: financial freedom, for that joy of home ownership? I think

1110
00:47:59,120 --> 00:48:02,280
Speaker 2: that is an important question for folks to ask, because again,

1111
00:48:02,360 --> 00:48:04,600
Speaker 2: we've owned multiple homes ourselves. You know, we've invested in

1112
00:48:04,640 --> 00:48:07,400
Speaker 2: real estate, and given the right climate, given the proper

1113
00:48:07,440 --> 00:48:10,560
Speaker 2: financial planning, owning a home can be the perfect move

1114
00:48:10,760 --> 00:48:14,080
Speaker 2: for you, and there's a chance that the returns could

1115
00:48:14,120 --> 00:48:18,080
Speaker 2: be pretty significant as well. But I also wouldn't count

1116
00:48:18,239 --> 00:48:20,680
Speaker 2: on that, you know, that home being the smartest financial

1117
00:48:20,719 --> 00:48:22,239
Speaker 2: move that you've ever made.

1118
00:48:22,640 --> 00:48:24,920
Speaker 1: Hope, I sure hope it's not, by the way, because

1119
00:48:25,719 --> 00:48:28,000
Speaker 1: if it is the best financial move you've ever made,

1120
00:48:28,040 --> 00:48:30,840
Speaker 1: it means that you haven't invested inside of the retirement

1121
00:48:30,840 --> 00:48:33,600
Speaker 1: account that we talk about as being the biggest wealth drivers,

1122
00:48:33,880 --> 00:48:35,600
Speaker 1: And so maybe it is. I think for a lot

1123
00:48:35,600 --> 00:48:38,040
Speaker 1: of people it has been. That doesn't mean it's the

1124
00:48:38,080 --> 00:48:39,160
Speaker 1: best route though, totally.

1125
00:48:39,239 --> 00:48:41,040
Speaker 2: Yeah, and to it to a certain extent, like when

1126
00:48:41,080 --> 00:48:42,600
Speaker 2: you buy a home, like you said, like you are

1127
00:48:42,640 --> 00:48:45,360
Speaker 2: putting down roots, Like there is an amount of permanence,

1128
00:48:45,400 --> 00:48:48,640
Speaker 2: Like there's a degree, like you are anchoring yourself essentially,

1129
00:48:48,760 --> 00:48:51,200
Speaker 2: and you just got to ask yourself if you're ready

1130
00:48:51,320 --> 00:48:53,719
Speaker 2: for that stage of life, if that's what you want

1131
00:48:53,719 --> 00:48:57,760
Speaker 2: the next seven plus years to look like. But ultimately,

1132
00:48:57,800 --> 00:49:00,319
Speaker 2: I think what we're pointing out here is that you

1133
00:49:00,320 --> 00:49:03,799
Speaker 2: shouldn't be buying a home or you shouldn't continue to

1134
00:49:03,840 --> 00:49:07,359
Speaker 2: rent purely based on financials. There are so many other

1135
00:49:07,480 --> 00:49:10,279
Speaker 2: more important factors in life to consider. It shouldn't just

1136
00:49:10,320 --> 00:49:13,640
Speaker 2: be for financial reasons, though that is an important lens

1137
00:49:13,719 --> 00:49:16,880
Speaker 2: to look at the decision making process through. But it

1138
00:49:16,880 --> 00:49:20,239
Speaker 2: shouldn't just be only financial reasons, but life reasons as well.

1139
00:49:20,520 --> 00:49:22,880
Speaker 2: It's to be close to a family or friends, or

1140
00:49:22,960 --> 00:49:25,319
Speaker 2: make or whether it's schools or a pace of life.

1141
00:49:25,400 --> 00:49:28,080
Speaker 2: If you can't rent there, then okay, yeah, maybe buying

1142
00:49:28,080 --> 00:49:30,200
Speaker 2: there is something to consider.

1143
00:49:30,280 --> 00:49:31,799
Speaker 1: Yeah, but it makes me think one more thing. It's

1144
00:49:31,880 --> 00:49:34,000
Speaker 1: kind of like who's worse off when it comes to

1145
00:49:34,680 --> 00:49:36,960
Speaker 1: higher education. It's the folks who went to school for

1146
00:49:36,960 --> 00:49:38,960
Speaker 1: three years and took on the student loan debt but

1147
00:49:38,960 --> 00:49:41,000
Speaker 1: didn't get the degree. The same thing is true for

1148
00:49:41,040 --> 00:49:43,640
Speaker 1: people who buy a house. The people who are absolutely

1149
00:49:43,640 --> 00:49:45,399
Speaker 1: in the worst position are the folks who are there

1150
00:49:45,440 --> 00:49:48,680
Speaker 1: for a year or two and sell. And so that

1151
00:49:48,800 --> 00:49:52,120
Speaker 1: timeline is massively important when you're making this decision. Absolutely

1152
00:49:52,120 --> 00:49:54,360
Speaker 1: as well. Son, Let's get back to the beer that

1153
00:49:54,400 --> 00:49:56,520
Speaker 1: we had on this episode. This since called do It

1154
00:49:56,520 --> 00:49:59,839
Speaker 1: it was a time to believe in anything than IPA.

1155
00:50:00,040 --> 00:50:02,799
Speaker 2: Fits along with the theme of the episode a little

1156
00:50:02,800 --> 00:50:05,160
Speaker 2: bit like we do not want you to believe anything

1157
00:50:05,200 --> 00:50:06,120
Speaker 2: when it comes to housing.

1158
00:50:06,239 --> 00:50:08,480
Speaker 1: Yeah, and we hope you folks who want to buy

1159
00:50:08,480 --> 00:50:10,280
Speaker 1: a home want to own a home at some point

1160
00:50:10,520 --> 00:50:12,640
Speaker 1: achieve that. But we hope you achieve it under the

1161
00:50:12,680 --> 00:50:15,200
Speaker 1: right circumstances. But Matt, what were your thoughts on this beer?

1162
00:50:15,680 --> 00:50:17,239
Speaker 2: My tasting notes are going to be similar to some

1163
00:50:17,280 --> 00:50:19,000
Speaker 2: of the other burials that we that we've had with

1164
00:50:19,080 --> 00:50:22,279
Speaker 2: a few additions. It's certainly sharp. Again, the amount of

1165
00:50:22,320 --> 00:50:25,279
Speaker 2: hops that they must put in their IPAs is just

1166
00:50:25,440 --> 00:50:29,239
Speaker 2: off the charts. But in particular this ipa, is this

1167
00:50:29,320 --> 00:50:32,320
Speaker 2: a double or single. I don't single, it's a single regardless.

1168
00:50:32,560 --> 00:50:35,320
Speaker 2: It had this brightness to it that I felt that

1169
00:50:35,360 --> 00:50:37,239
Speaker 2: I feel like the other two didn't. And I feel

1170
00:50:37,280 --> 00:50:38,399
Speaker 2: like you can see it in the color a little

1171
00:50:38,440 --> 00:50:39,799
Speaker 2: bit too, Like it seemed like maybe it was a

1172
00:50:39,960 --> 00:50:41,520
Speaker 2: I don't know, maybe it was a touch more vibrant,

1173
00:50:41,640 --> 00:50:44,200
Speaker 2: but on the in the mouth it had just a

1174
00:50:44,680 --> 00:50:46,759
Speaker 2: like a lightness and a brightness to it where it

1175
00:50:46,760 --> 00:50:49,239
Speaker 2: felt like it was alive. This reminds me of some

1176
00:50:49,280 --> 00:50:52,800
Speaker 2: of those early fresh Hot beers that we had. I

1177
00:50:52,800 --> 00:50:54,480
Speaker 2: don't know, I feel like fresh Hop beers were real big.

1178
00:50:54,640 --> 00:50:56,839
Speaker 1: I was totally thinking freshers six seven years ago and

1179
00:50:56,880 --> 00:50:58,880
Speaker 1: we got a few that were I thought this was

1180
00:50:58,960 --> 00:51:02,120
Speaker 1: more like back than some of the other burial beers.

1181
00:51:02,640 --> 00:51:05,920
Speaker 1: And even still it's intense from an ipa perspective, but

1182
00:51:05,960 --> 00:51:08,799
Speaker 1: it's less intense than the other burial IPAs we've had.

1183
00:51:09,120 --> 00:51:11,680
Speaker 1: And yeah, fresh hot vibes for sure, Like I'm tasting

1184
00:51:11,680 --> 00:51:13,360
Speaker 1: the grain on the vine almost yeah.

1185
00:51:13,239 --> 00:51:15,520
Speaker 2: Yeah, it's like tingly, yeah, like it almost it's like

1186
00:51:15,880 --> 00:51:19,520
Speaker 2: for any of the Chinese, like Chezuan fans out there,

1187
00:51:20,080 --> 00:51:22,160
Speaker 2: and you kind of got that tingle on the tongue,

1188
00:51:22,200 --> 00:51:24,880
Speaker 2: like This one kind of has that going on it.

1189
00:51:24,880 --> 00:51:27,239
Speaker 2: It certainly has some of those higher notes like on

1190
00:51:27,280 --> 00:51:30,240
Speaker 2: the scale as opposed to like those lower, deeper, earthy

1191
00:51:30,280 --> 00:51:33,120
Speaker 2: notes that you can get with some of burials IPAs.

1192
00:51:33,160 --> 00:51:34,960
Speaker 2: But definitely really enjoyed it though.

1193
00:51:35,000 --> 00:51:36,799
Speaker 1: Yeah, this was a good one, all right, But that'll

1194
00:51:36,800 --> 00:51:39,280
Speaker 1: be it for this episode. You can find show notes

1195
00:51:39,320 --> 00:51:41,279
Speaker 1: links to some of the stuff we mentioned, including I

1196
00:51:41,280 --> 00:51:43,200
Speaker 1: don't think we mentioned this, but there's a New York

1197
00:51:43,239 --> 00:51:46,200
Speaker 1: Times has this great rent to buy calculator that will

1198
00:51:46,239 --> 00:51:47,600
Speaker 1: look out there and to.

1199
00:51:47,440 --> 00:51:49,759
Speaker 2: Totally do that you can. There's just so much you

1200
00:51:49,760 --> 00:51:51,920
Speaker 2: can play around with. There a lot of sliders, Yeah,

1201
00:51:52,000 --> 00:51:53,120
Speaker 2: makes it a lot of fun to play with.

1202
00:51:53,200 --> 00:51:54,759
Speaker 1: And you can basically say this is the purchase price

1203
00:51:54,800 --> 00:51:56,719
Speaker 1: I'm looking at blah blah blah, and they'll say, well,

1204
00:51:56,719 --> 00:51:58,600
Speaker 1: if you can find a rental in this price range,

1205
00:51:58,719 --> 00:52:01,160
Speaker 1: then renting makes more sense. Or here's what tips the

1206
00:52:01,160 --> 00:52:02,759
Speaker 1: scales and when you might want to buy. I think

1207
00:52:02,760 --> 00:52:04,279
Speaker 1: that's a helpful total to play with if you're in

1208
00:52:04,320 --> 00:52:05,319
Speaker 1: the market. Absolutely.

1209
00:52:05,800 --> 00:52:07,080
Speaker 2: One of the things you can play with too, is

1210
00:52:07,120 --> 00:52:09,319
Speaker 2: you can change the scale as to how long it

1211
00:52:09,360 --> 00:52:10,960
Speaker 2: is that you'll stay in that property, and you can

1212
00:52:11,000 --> 00:52:14,640
Speaker 2: physically see how it's like instead of buying that home.

1213
00:52:15,120 --> 00:52:16,960
Speaker 2: And now what that means is that you can you

1214
00:52:16,960 --> 00:52:20,200
Speaker 2: could afford renting a place that cost you this much

1215
00:52:20,280 --> 00:52:22,280
Speaker 2: stinking money, and it would. It's gonna blow your Mind's

1216
00:52:22,280 --> 00:52:25,240
Speaker 2: amazing because it puts the closing costs, the transaction costs

1217
00:52:25,239 --> 00:52:28,000
Speaker 2: into perspective. Uh yeah, we'll make sure to link to

1218
00:52:28,000 --> 00:52:30,680
Speaker 2: that in the show notes. It can be incredibly enlightening,

1219
00:52:30,880 --> 00:52:32,680
Speaker 2: but otherwise, that's going to be it for this episode.

1220
00:52:32,719 --> 00:52:34,760
Speaker 2: For all the listeners out there who have not left

1221
00:52:34,920 --> 00:52:38,200
Speaker 2: us a review yet, we would greatly appreciate some kind

1222
00:52:38,239 --> 00:52:40,160
Speaker 2: words over there. It helps us to get the word out,

1223
00:52:40,480 --> 00:52:42,840
Speaker 2: helps other folks to find how to money and to

1224
00:52:42,960 --> 00:52:45,480
Speaker 2: better their financial standing. But Joel, that's going to be

1225
00:52:45,480 --> 00:52:48,600
Speaker 2: it for this episode until next time. Best Friends Out,

1226
00:52:48,800 --> 00:53:02,680
Speaker 2: Best Friends Out s