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Speaker 1: Welcome to Had of 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?

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Speaker 1: Was it dirty? Harry? That's the That's what I'm thinking.

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Speaker 1: I never saw it, nobody. I liked some Clint Eastwood classic,

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Speaker 1: The Unfregiven. I think that was my favorite of his. Uh.

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Speaker 2: 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 xpos 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 just 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 in to question this sort of

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Speaker 2: forbidden fruit, this thing that you dare not speak ill of.

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

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Speaker 2: gonna 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 in the last year or two.

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Speaker 1: Got that as well. And so yeah, we're gonna talk

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Speaker 1: about current trends and how that impacts how you think

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Speaker 1: about buying a home or kind of staying put. But Matt,

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Speaker 1: before we get to that, I just wanted to give

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Speaker 1: a shout out listener Lindy. She emailed us and she

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Speaker 1: she had to give herself a pat on the back,

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

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Speaker 1: here too, for scoring a discount. No, not just before

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Speaker 1: she bought something after the fact. Yeah, And I love

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Speaker 1: this because.

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Speaker 2: She pulled the she pulled that costcoo reverse car.

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Speaker 1: It's like, hey, how about this, that's right. And so

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Speaker 1: she had bought something, and I think there was like

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Speaker 1: a Mother's Day sale or something that happened right after

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Speaker 1: 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.

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Speaker 1: I got robbed. Yeah, but no, if you just kindly asked,

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Speaker 1: and she like literally detailed her email correspondence for us.

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Speaker 1: In the email she sent us, it was super sweet,

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Speaker 1: just asking saying, hey, see there's a discount now. I

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Speaker 1: bought before the discount, didn't realize this was coming down

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Speaker 1: the pike. Can you apply this discount to my order?

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Speaker 1: And the answer was yeah, of course, we're retroactively. 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 I ever

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Speaker 1: hurt STI ask yeah, they might be like nope, sorry,

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Speaker 1: But 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 direct us

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

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

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

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Speaker 1: an advocate for themselves.

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Speaker 2: Linda, you thank you so much for sending that win

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Speaker 2: our way. And actually it really does encourage Joel and

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

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

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

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

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Speaker 2: we would love to hear that. We may not we

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Speaker 2: don't share them all on the show, but there's certain

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Speaker 2: ones that kind of stand out and ones that we

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Speaker 2: have to share with our listeners. Sure, but if you've

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Speaker 2: got one of those yes in them our way how

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Speaker 2: the money pot.

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

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

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

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

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

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

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Speaker 1: talk about home ownership. But first ownership, we mentioned the beer.

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Speaker 1: This 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 a 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.

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Speaker 1: Their hands on one. Yeah, and there's nothing wrong with

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Speaker 1: buying a house. And in fact, I think it's going

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Speaker 1: to sound like we think there's something wrong with it

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Speaker 1: during this episode because of we're actually trying to combat

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Speaker 1: the predominant narrative and help make people think again. But

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

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Speaker 1: But it just makes me think, Matt, that you know,

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Speaker 1: in childhood, there are all sorts of things we hear

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Speaker 1: are adults say or parents say, and we end up

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Speaker 1: kind of believing it as a stock belief our whole life,

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Speaker 1: never really questioning the tenants of whether it's true or not.

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Speaker 1: It makes you think about swimming after eating just to.

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Speaker 2: Wait like an hour, right, we were entering pool season,

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Speaker 2: 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. You got to 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 a fact? And it's really

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

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Speaker 1: dive 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 gonna turn red and everybody's gonna

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

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Speaker 2: 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 up in that pool. But there are a lot

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Speaker 2: of things out there that we believe to be true.

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

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Speaker 2: the narrative exists that if you're renting, you are throwing

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Speaker 2: away money you need to you got to buy a

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

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Speaker 2: want to build up some generational wealth, you better get

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Speaker 2: on the path to home ownership, otherwise you're gonna be

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Speaker 2: left behind.

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Speaker 1: How else are you gonna get there?

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Speaker 2: And actually the stats show that homeowners actually do have

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Speaker 2: more wealth than renters. Are you upending our argument that

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Speaker 2: very a lot more? No, No, we will get to

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Speaker 2: that later on. We are not against home ownership, like

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Speaker 2: we said at the top here, but it's also not

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Speaker 2: a slam dunk decision, and it definitely doesn't ensure that

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Speaker 2: you're going to build wealth faster. It might be a

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Speaker 2: good forced method of savings for those out there who

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Speaker 2: might have less discipline when it comes to your investing,

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Speaker 2: but it is not a better route to financial independence

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Speaker 2: 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.

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Speaker 1: Yeah, the cult of home ownership. That's been kind of

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Speaker 1: a change and embedded belief for a long time, just

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Speaker 1: in the minds of everyday Americans. And I think part

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Speaker 1: of that comes from government, part of that comes from

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Speaker 1: news media, part of that comes from financial pundits. But

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Speaker 1: something else. I think another reason that people really think

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Speaker 1: that owning a home is like the best decision they

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Speaker 1: can make from a financial perspective, it comes from just

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Speaker 1: what's happened in recent memory. Right. Sure, there's a lot

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Speaker 1: of recency bias, is what I'm trying to say. And

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Speaker 1: so if you bought a house in Florida back in

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Speaker 1: twenty nineteen, my guess is, no one could convince you

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Speaker 1: that buying a home is a dumb move because home

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Speaker 1: prices in Florida are up something with like eighty percent

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Speaker 1: in that time period, and so it would take a

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Speaker 1: lot of persuasion to get you to even consider that

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Speaker 1: buying a home might not be a slam duck move

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Speaker 1: all the time in every situation. And even if you

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Speaker 1: sold your home just a year after buying it, you

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Speaker 1: still did well, like you still did okay, making enough

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Speaker 1: to more than cover the transaction costs of that purchase

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Speaker 1: in our likelihood. And so this torrential housing market and

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Speaker 1: ultra low rates that we had for a bunch of

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Speaker 1: years that fueled affordability, and that's really only reinforced the

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Speaker 1: notion that owning a home is the quickest path to wealth.

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Speaker 1: But someone who bought a home in six they likely

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Speaker 1: have a different feeling because they had a much different experience.

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Speaker 1: They either a lot of folks had their homework closed

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Speaker 1: on back then, or even if they didn't, they might

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Speaker 1: have been underwater for a bunch of years, and they

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Speaker 1: might have a completely different perspective because they bought a

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Speaker 1: home at a different period in time. And so I

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Speaker 1: just think that recency bias is a part of this.

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Speaker 1: It's tainted our view and has created an even stronger

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Speaker 1: bias towards home ownership. But the environment we're in right

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Speaker 1: now is different, and so different considerations 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, yeah, 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.

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Speaker 1: We like to look at, right which I think that's

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Speaker 1: what how most people approach a lot of things. Makes

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Speaker 1: me think of bitcoin and how oh fly and high

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Speaker 1: right around the Super Bowl, all those really expensive ads.

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Speaker 1: It's funny, I was listing something the other day and

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Speaker 1: I didn't realize the LA Lakers still play at a

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Speaker 1: place called Crypto Arena, and they still 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 bias 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.

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Speaker 2: Of 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 wouldn't.

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

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

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

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

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Speaker 1: values do go up over time, right, But it's also

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Speaker 1: important to mention that the market you buy in matters,

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Speaker 1: and buying bitcoin in January around the Super Bowl last

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Speaker 1: year that didn't pan out so well, and buying a

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

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

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Speaker 1: and yeah, Matt, let's talk about historical data for a second,

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Speaker 1: because if you look at the last thirty years, real

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Speaker 1: estate had an average growth rate of five point three percent,

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Speaker 1: but the S and P five hundred had an annualized

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Speaker 1: return of nine point seven percent, quite a bit more.

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Speaker 1: And which of these is greater? Which one would you

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Speaker 1: prefer to see? This is an easy question, and that

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Speaker 1: reality holds if you zoom out even further and you

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Speaker 1: look at an even longer period of time, right. And

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Speaker 1: so if you've listened to this show for any length

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Speaker 1: of time, you know that we like real estate as

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Speaker 1: an investment. But there's a difference between buying a home

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Speaker 1: purely as an investment versus buying a home that you like,

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Speaker 1: right that's gonna serve as your primary residence. And we

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Speaker 1: make completely different decisions when we're buying a home as

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Speaker 1: an investment versus buying it as a place for us

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Speaker 1: to live and to raise kids, have a family, stuff

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Speaker 1: like that. The entire reason that we're having this discussion

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Speaker 1: is just to combat the knee jerk belief that buying

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Speaker 1: a home is the quickest possible route to wealth, because

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

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Speaker 1: it certainly points in favor of stocks being a far

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Speaker 1: better long term investment, even though, like you said, that

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Speaker 1: gallup pole, Matt, it shows that people believe the opposite.

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Speaker 1: That's right.

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Speaker 2: Yeah, Well, actually, what's really unfortunate about that gallup pole

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Speaker 2: too is the fact that the biggest increase as to

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Speaker 2: what people thought was the best long term investment was gold.

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Speaker 1: Yeah. So look at the numbers historically on that too, yes.

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Speaker 2: Exactly, which by a long shot underperforms the stock market. Honestly,

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Speaker 2: I think it's pretty equivalent to real estate over like

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Speaker 2: the past thirty, past fifty years.

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Speaker 1: We detail that in a recent Hot 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 great new is right.

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Speaker 2: I'm certainly happy that mortgages exist and that I didn't

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Speaker 2: have to save up the amount of cash required to

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Speaker 2: buy a home in cash, and I couldn't imagine renting

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Speaker 2: until being able to finally buy when you're like fifty

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Speaker 2: or sixty years old. It would make it untenable for

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Speaker 2: the vast majority of folks out there. But leverage is

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Speaker 2: a double edged sword. Again, Ask any any home flippers,

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Speaker 2: Ask any real estate developers who were out over their

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Speaker 2: skis back in oh seven eight as we experience the

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Speaker 2: popping of.

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

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Speaker 1: leverage front, mat 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. That's right.

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Speaker 2: Yeah, So hopefully we are not completely shattering all of

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Speaker 2: your hopes for home ownership, but we do have some

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Speaker 2: additional dirty truths to get to when it comes to

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Speaker 2: home ownership, and also some of the things that you

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Speaker 2: need to consider if you are going to go ahead

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Speaker 2: with that home purchase.

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Speaker 1: What gets 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.

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Speaker 2: Yeah, but okay, not for the sake of talking smack,

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Speaker 2: but just for the sake of wanting, wanting folks to

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Speaker 2: make sure that they are their eyes are open, that

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Speaker 2: they are approaching this big purchase while at the same

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Speaker 2: time considering all the different facts and factors that.

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Speaker 1: They should keep in mind. Yeah, we're not trying to

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Speaker 1: be contrarian for the sake of being contrarie exactly. It

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Speaker 1: makes me think of hazing if you wanted to be

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Speaker 1: in some sort of fraternity or something like that. I

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Speaker 1: was never in a fraternity, never had the desire, never

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Speaker 1: was cool enough, let's be honest to do that.

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

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Speaker 2: fraternity for chemists, you know, a different brethren that you

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Speaker 2: can join. I'm not smart enough professional fraternities, I guess

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Speaker 2: as well. Okay, it's not just about partying it.

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Speaker 1: But there's all like initiation ceremonies to get into that,

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Speaker 1: and I don't know if they're if like what they're

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Speaker 1: doing really to make that happen. But if you still

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Speaker 1: want to be a part of that fraternity after the

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Speaker 1: hazing or that and if ciation stuff, then it shows

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

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Speaker 1: to be there. And that's how I think of this episode.

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Speaker 1: If you really want to buy a home. You're going

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Speaker 1: to listen 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 financial really ready to buy a home as well

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

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

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

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

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

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

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

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Speaker 1: for 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 yeah,

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

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

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

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

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

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Speaker 1: probably has to do with their bias or like I

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

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Speaker 1: and now look what, it's weird. Sorry, mom, The market's

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Speaker 1: a little different than Yeah. Well, and then again you

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Speaker 1: look at the numbers and they probably would have been

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Speaker 1: better putting money in the market too, But it's just

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Speaker 1: how they've rationalized it, how they've thought about it. But

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Speaker 1: if you're young and you're just getting started in your

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Speaker 1: career and there's a chance you might relocate for that career,

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Speaker 1: renting is probably a slam dunk. Or you might just

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Speaker 1: want to live somewhere else in the near future. Or

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Speaker 1: it doesn't have to be another city, it could be

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Speaker 1: another part of town. Yeah, where you live, and so

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Speaker 1: why would you buy, Like, don't rent? Figure out where

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Speaker 1: exactly you want to live first, and even once you have,

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Speaker 1: you might want to keep renting. I mean, one of

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Speaker 1: the biggest perks of renting is that it gives you

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Speaker 1: a ton of flexibility and that is highly underrated. Also,

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Speaker 1: renting puts a roof up of your head, and so

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Speaker 1: it's not throwing money away because it's giving you a

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Speaker 1: place to call home, even if it's not a place

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Speaker 1: that you own. And like plus, for all the home

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Speaker 1: improvement haters out there, Matt, they don't have to fix

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Speaker 1: stuff that goes wrong. You got a landlord for that.

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Speaker 1: And it certainly makes budgeting easier if you don't have

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Speaker 1: all these other potentially intangible costs that we're going to

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Speaker 1: cover in this episode. If you don't have those to

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Speaker 1: deal with.

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Speaker 2: This 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.

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Speaker 1: Like there's the.

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Speaker 2: Chance that if you are listening to this podcast, you

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Speaker 2: live in one of these cities.

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Speaker 1: Most were the best to buy, but it was like

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Speaker 1: Detroit and I don't even remember, but they were very,

435
00:18:48,200 --> 00:18:50,800
Speaker 1: very very few. Let's be honest, that most it's better

436
00:18:50,840 --> 00:18:53,680
Speaker 1: to rent almost everywhere from a financial perspective, exactly. Yeah.

437
00:18:53,720 --> 00:18:56,280
Speaker 2: And the fact is that's where the most populous areas

438
00:18:56,320 --> 00:18:58,320
Speaker 2: are as well, like the forty five of the fifty

439
00:18:58,359 --> 00:19:01,440
Speaker 2: major cities, is where a large, large percentage of the

440
00:19:01,520 --> 00:19:04,880
Speaker 2: US population lives. And on average, you're going to save

441
00:19:05,040 --> 00:19:09,399
Speaker 2: eight hundred dollars a month, which is insane. That's almost

442
00:19:09,400 --> 00:19:11,919
Speaker 2: ten thousand dollars a year back in your pocket that

443
00:19:12,000 --> 00:19:14,560
Speaker 2: you can do whatever you want with. But hopefully you

444
00:19:14,560 --> 00:19:17,600
Speaker 2: would take that money and you would invest it. But

445
00:19:17,640 --> 00:19:19,920
Speaker 2: it could actually be much more than that in many

446
00:19:19,920 --> 00:19:22,399
Speaker 2: of the West Coast cities. According to Redfinn, the median

447
00:19:22,560 --> 00:19:26,080
Speaker 2: estimated monthly mortgage payment for home buyers out in California,

448
00:19:26,119 --> 00:19:30,159
Speaker 2: specifically in San Jose is eleven thousand dollars. And you

449
00:19:30,200 --> 00:19:34,440
Speaker 2: compare that with a median estimated monthly rents of four thousand.

450
00:19:35,640 --> 00:19:37,160
Speaker 1: It's crazy. What a wild swing.

451
00:19:37,480 --> 00:19:40,119
Speaker 2: And one final start here nationwiy the typical home costs

452
00:19:40,240 --> 00:19:43,280
Speaker 2: twenty five percent more to buy than to rent, and

453
00:19:43,320 --> 00:19:46,359
Speaker 2: this is without even considering maintenance costs that we're going

454
00:19:46,440 --> 00:19:48,720
Speaker 2: to get to and as we talk about some of

455
00:19:48,760 --> 00:19:51,959
Speaker 2: the additional expenses associated with home ownership. But going back

456
00:19:52,000 --> 00:19:54,479
Speaker 2: to the forty five biggest cities where you're saving eight

457
00:19:54,560 --> 00:19:57,680
Speaker 2: hundred bucks a month, were you to not actually spend

458
00:19:57,680 --> 00:19:59,440
Speaker 2: that money, and were you to take it and stick

459
00:19:59,440 --> 00:20:01,240
Speaker 2: it in the market, if you were to invest the

460
00:20:01,240 --> 00:20:04,119
Speaker 2: difference there, you would end up with over nine hundred

461
00:20:04,200 --> 00:20:07,520
Speaker 2: thousand dollars. That's assuming a seven percent rate of return,

462
00:20:07,560 --> 00:20:10,480
Speaker 2: which is fairly conservative, and you would have that much

463
00:20:10,480 --> 00:20:14,960
Speaker 2: money after thirty years. That's nearly a million dollars, which

464
00:20:15,600 --> 00:20:17,560
Speaker 2: it's just crazy to think that you could have that

465
00:20:17,640 --> 00:20:20,040
Speaker 2: much just on this one expense. This isn't like your

466
00:20:20,080 --> 00:20:24,359
Speaker 2: combined total portfolio. No, just on the cost of housing.

467
00:20:24,400 --> 00:20:25,920
Speaker 2: It kind of makes me so. On Monday, we talked

468
00:20:25,960 --> 00:20:29,439
Speaker 2: about a listener was asking about indexed Universal Life and

469
00:20:29,520 --> 00:20:32,080
Speaker 2: we're talking about how, I don't know, it's this fancy product,

470
00:20:32,240 --> 00:20:35,040
Speaker 2: and yes, technically you might be able to grow your

471
00:20:35,040 --> 00:20:37,560
Speaker 2: wealth by taking that money and sticking it in that product,

472
00:20:37,680 --> 00:20:40,240
Speaker 2: but instead go for the cheaper alternative and just invest

473
00:20:40,240 --> 00:20:42,440
Speaker 2: the difference. It almost makes you feel like you can't

474
00:20:42,440 --> 00:20:44,879
Speaker 2: compare homes. It's sort of like you were saying earlier,

475
00:20:44,920 --> 00:20:47,320
Speaker 2: you can't compare. It's not apples to apples. Yeah, this

476
00:20:47,400 --> 00:20:50,400
Speaker 2: is like apples to bananas or something. But it kind

477
00:20:50,400 --> 00:20:52,239
Speaker 2: of makes when you look at it from that in

478
00:20:52,280 --> 00:20:54,240
Speaker 2: that perspective, it kind of makes you think, oh, man,

479
00:20:54,520 --> 00:20:57,320
Speaker 2: what am I actually giving up by purchasing a home

480
00:20:57,359 --> 00:20:59,639
Speaker 2: as opposed to renting, Especially if you're talking about some

481
00:20:59,640 --> 00:21:03,560
Speaker 2: of these more affordable cities we're renting is drastically more affordable.

482
00:21:03,600 --> 00:21:05,040
Speaker 1: Well, it makes me think about something else. If the

483
00:21:05,119 --> 00:21:09,320
Speaker 1: numbers were to change on car leasing versus buying a car,

484
00:21:09,640 --> 00:21:11,720
Speaker 1: that would change how we think about it. The reason

485
00:21:11,760 --> 00:21:13,480
Speaker 1: we don't like leasing a car is because it's so

486
00:21:13,640 --> 00:21:15,440
Speaker 1: darn expensive and because you have to give it back

487
00:21:15,480 --> 00:21:18,439
Speaker 1: after two or three years. Right, You've you've you have

488
00:21:18,600 --> 00:21:20,560
Speaker 1: kind of flushed a little a lot of money down

489
00:21:20,600 --> 00:21:22,520
Speaker 1: the toilet in order to do that, and so the

490
00:21:22,560 --> 00:21:25,200
Speaker 1: wiser thing to do is to buy a car. But

491
00:21:25,200 --> 00:21:28,360
Speaker 1: but let's say the price of leases was magically cut

492
00:21:28,400 --> 00:21:30,879
Speaker 1: in half, we wouldn't hate leasing anymore, and in fact,

493
00:21:31,000 --> 00:21:32,679
Speaker 1: I would probably be the first one to line up

494
00:21:32,680 --> 00:21:36,200
Speaker 1: and lease a car. So it's about the term or

495
00:21:36,200 --> 00:21:37,760
Speaker 1: it's less about the language and it's more about the

496
00:21:37,800 --> 00:21:40,440
Speaker 1: numbers exactly like we would gladly issue ama kolpa and

497
00:21:40,480 --> 00:21:42,080
Speaker 1: say oh yeah, yeah, yeah, like we used to say

498
00:21:42,080 --> 00:21:44,119
Speaker 1: that we hate leasing, or oh yeah, yeah yeah, we

499
00:21:44,200 --> 00:21:47,440
Speaker 1: used to say that we hated Index Universal Life. Yeah.

500
00:21:47,480 --> 00:21:49,960
Speaker 2: But if the numbers changed, if if something is different

501
00:21:50,000 --> 00:21:52,320
Speaker 2: on the ground, then we're gonna follow where the data.

502
00:21:52,200 --> 00:21:53,879
Speaker 1: Leads, is right, and so so much of it is

503
00:21:53,920 --> 00:21:56,920
Speaker 1: a question of a value and price, and so this

504
00:21:56,960 --> 00:22:00,520
Speaker 1: is what makes renting potentially so much better fortntional money

505
00:22:00,560 --> 00:22:03,200
Speaker 1: savvy folks, though, because you just mentioned Matt almost a

506
00:22:03,240 --> 00:22:06,080
Speaker 1: million dollars, I mean, given some of those numbers, renters

507
00:22:06,119 --> 00:22:08,920
Speaker 1: actually have a wealth building advantage, which is not how

508
00:22:08,960 --> 00:22:10,399
Speaker 1: any of us ever talk about it, not how you

509
00:22:10,440 --> 00:22:12,960
Speaker 1: ever hear about it. It's just that they rarely use it.

510
00:22:13,000 --> 00:22:14,479
Speaker 1: And so you know, it depends on where you live,

511
00:22:14,560 --> 00:22:16,399
Speaker 1: of course, but you could easily be saving one thousand

512
00:22:16,440 --> 00:22:20,320
Speaker 1: dollars a month or more by renting instead of buying.

513
00:22:20,920 --> 00:22:23,840
Speaker 1: But the key here is that if renters would funnel

514
00:22:23,880 --> 00:22:27,000
Speaker 1: extra cash into investments that they'd otherwise put towards a

515
00:22:27,000 --> 00:22:30,920
Speaker 1: more expensive mortgage, they'd actually build wealth more quickly than

516
00:22:31,320 --> 00:22:34,720
Speaker 1: their friends, their peers who buy a house instead. It's

517
00:22:34,920 --> 00:22:36,920
Speaker 1: the problem here, though, the crux of the issue is

518
00:22:36,960 --> 00:22:39,480
Speaker 1: a lack of discipline. That's the problem in this scenario.

519
00:22:39,480 --> 00:22:41,840
Speaker 1: It's not that renting is dumb or that renters are

520
00:22:41,880 --> 00:22:45,480
Speaker 1: at a disadvantage. It is that renters are saving a

521
00:22:45,520 --> 00:22:48,000
Speaker 1: lot of money by renting in most of the country,

522
00:22:48,160 --> 00:22:50,359
Speaker 1: but they're not funneling the money that they otherwise would

523
00:22:50,359 --> 00:22:52,320
Speaker 1: have used to buy a house into the market.

524
00:22:52,560 --> 00:22:54,600
Speaker 2: And so the fact is we are going pretty hard

525
00:22:54,600 --> 00:22:58,359
Speaker 2: in the direction of, hey, you should consider renting. It

526
00:22:58,400 --> 00:23:00,439
Speaker 2: should not be a default decision for you to purchase

527
00:23:00,440 --> 00:23:02,879
Speaker 2: a home. And a part of that is because home

528
00:23:02,920 --> 00:23:05,359
Speaker 2: ownership just costs you more than you think. We've already

529
00:23:05,359 --> 00:23:08,560
Speaker 2: talked about basically the upfront costs, like your monthly payments,

530
00:23:09,000 --> 00:23:12,560
Speaker 2: but specifically homes are really expensive to maintain.

531
00:23:12,680 --> 00:23:15,600
Speaker 1: I've heard that, so I've experienced that. Yes, it's just

532
00:23:16,440 --> 00:23:16,879
Speaker 1: there are.

533
00:23:16,760 --> 00:23:19,800
Speaker 2: Just ongoing costs. I mean, like patching a roof, the

534
00:23:19,840 --> 00:23:23,240
Speaker 2: cost of maybe some fresh paint it's getting warmed these days.

535
00:23:23,240 --> 00:23:26,520
Speaker 2: We've talked about getting your HVAC service. That's important as well.

536
00:23:26,920 --> 00:23:29,520
Speaker 2: Pest control, that's something that costs some money as well,

537
00:23:29,560 --> 00:23:32,440
Speaker 2: although that's one of those that you could totally diy

538
00:23:32,480 --> 00:23:34,280
Speaker 2: that you can hear yourself. We actually have a great

539
00:23:34,359 --> 00:23:39,160
Speaker 2: article up on the website that tells you exactly how

540
00:23:39,200 --> 00:23:41,880
Speaker 2: you should spend your twenty dollars on these two items

541
00:23:41,920 --> 00:23:44,280
Speaker 2: and how that will save you a ridiculous amount of

542
00:23:44,280 --> 00:23:46,280
Speaker 2: money over the years. So that's one way that you

543
00:23:46,280 --> 00:23:49,439
Speaker 2: could reduce that cost. But you're likely going to spend

544
00:23:49,800 --> 00:23:53,480
Speaker 2: roughly about one percent of the purchase price every year

545
00:23:53,520 --> 00:23:57,280
Speaker 2: on home maintenance. That's the general rule of thumb. But

546
00:23:57,320 --> 00:23:59,879
Speaker 2: then just not to mention the fact that you are

547
00:24:00,359 --> 00:24:04,720
Speaker 2: your time, there's this additional hassle factor with getting these

548
00:24:04,760 --> 00:24:07,600
Speaker 2: things done, with scheduling the work being done there on

549
00:24:07,640 --> 00:24:09,800
Speaker 2: your house, or if you are looking to be a

550
00:24:09,800 --> 00:24:12,840
Speaker 2: little more frugal, setting the time aside to actually doing

551
00:24:12,880 --> 00:24:14,920
Speaker 2: that work your stuff. Yeah, there's a big time costs,

552
00:24:15,040 --> 00:24:16,760
Speaker 2: just a pain in the butt though to being a homeowner,

553
00:24:17,040 --> 00:24:19,199
Speaker 2: less so than being a renter. And sometimes there's an

554
00:24:19,240 --> 00:24:20,760
Speaker 2: act of God, there's a tree that falls through your

555
00:24:20,800 --> 00:24:23,360
Speaker 2: roof and it just ruins your day and potentially months

556
00:24:23,359 --> 00:24:24,760
Speaker 2: of your life while you're trying to, like work with

557
00:24:24,800 --> 00:24:26,520
Speaker 2: the insurance company, get that figured out. Do you want

558
00:24:26,560 --> 00:24:28,480
Speaker 2: to give folks a little update as to where things

559
00:24:28,480 --> 00:24:30,480
Speaker 2: are at the given moments.

560
00:24:30,520 --> 00:24:33,240
Speaker 1: With your Construction is just about to begin, okay, which

561
00:24:33,240 --> 00:24:35,359
Speaker 1: feels like it's taken a long time to do that,

562
00:24:35,680 --> 00:24:37,480
Speaker 1: but it has been a long time.

563
00:24:37,680 --> 00:24:39,800
Speaker 2: But I mean that's the they've ripped out, unfortunately, that's

564
00:24:39,800 --> 00:24:40,280
Speaker 2: the insurance.

565
00:24:40,359 --> 00:24:42,040
Speaker 1: They've ripped out some of the things that were damaged

566
00:24:42,080 --> 00:24:43,480
Speaker 1: and we've been living in it, but we're just about

567
00:24:43,480 --> 00:24:45,880
Speaker 1: to move out. Construction is going to begin and hopefully

568
00:24:45,920 --> 00:24:48,280
Speaker 1: it won't take more than a couple months. Fingers crossed,

569
00:24:48,320 --> 00:24:50,159
Speaker 1: Fingers crossed, But yeah, these are one This is one

570
00:24:50,160 --> 00:24:52,000
Speaker 1: of the things that comes along with home ownership. And

571
00:24:52,160 --> 00:24:54,719
Speaker 1: granted it'd be a pain if you're a renter, but

572
00:24:54,760 --> 00:24:55,960
Speaker 1: not nearly to the same extent.

573
00:24:56,200 --> 00:24:57,800
Speaker 2: And I think you'd still have to move if you're

574
00:24:57,800 --> 00:24:59,919
Speaker 2: a renter, but you wouldn't. It's just like, Okay, why

575
00:25:00,160 --> 00:25:02,719
Speaker 2: I'm gonna find another place as opposed to having to

576
00:25:02,760 --> 00:25:05,960
Speaker 2: do the work associated with right getting this not just

577
00:25:06,000 --> 00:25:08,000
Speaker 2: maintaining this property, but getting.

578
00:25:07,720 --> 00:25:08,760
Speaker 1: It back to where it was.

579
00:25:09,160 --> 00:25:10,720
Speaker 2: I feel like if I were in your shoes, that

580
00:25:10,720 --> 00:25:13,520
Speaker 2: would be the hardest part is knowing that, like you're

581
00:25:13,520 --> 00:25:15,720
Speaker 2: not improving any you're improving it exactly, getting back to it.

582
00:25:15,880 --> 00:25:17,080
Speaker 2: Like we added on the you know, like a little

583
00:25:17,080 --> 00:25:19,160
Speaker 2: screen porch on on our house whatever, And it's kind

584
00:25:19,160 --> 00:25:21,200
Speaker 2: of a pain of the butt to coordinate with a contractor.

585
00:25:21,240 --> 00:25:23,280
Speaker 2: But there's sort of this prize at the end of

586
00:25:23,320 --> 00:25:24,680
Speaker 2: the tunnel where you're like, oh, but it's going to

587
00:25:24,720 --> 00:25:25,159
Speaker 2: be worth it.

588
00:25:25,240 --> 00:25:25,480
Speaker 1: Yep.

589
00:25:26,040 --> 00:25:28,560
Speaker 2: I cannot imagine the frustration that you're feeling when it

590
00:25:28,600 --> 00:25:30,840
Speaker 2: comes to just getting back to baseline.

591
00:25:31,040 --> 00:25:32,720
Speaker 1: Yeah, and it's just a part time job of it all.

592
00:25:32,800 --> 00:25:35,160
Speaker 1: Like that's what That's what smokes me really as I'm

593
00:25:35,200 --> 00:25:38,080
Speaker 1: just contacting talking to so many people, talking to contractors,

594
00:25:38,080 --> 00:25:40,040
Speaker 1: the adjuster, all that kind of stuff, and I'm just

595
00:25:40,119 --> 00:25:41,840
Speaker 1: tired of it. I'm just like ready for it to

596
00:25:41,920 --> 00:25:44,400
Speaker 1: be done, so hopefully sooner rather than later. I think

597
00:25:44,440 --> 00:25:46,879
Speaker 1: one other thing though, that that gets people Matt. You're

598
00:25:46,920 --> 00:25:48,960
Speaker 1: talking about upgrades, You're you added on the screen porch.

599
00:25:49,080 --> 00:25:51,640
Speaker 1: That is something else that people when they buy a home.

600
00:25:51,720 --> 00:25:52,919
Speaker 2: Don't you make an example out of me?

601
00:25:54,000 --> 00:25:55,679
Speaker 1: They all of a sudden are like, well what about this?

602
00:25:55,720 --> 00:25:57,280
Speaker 1: What have I upgrade that? And Nah, you know I

603
00:25:57,320 --> 00:25:58,960
Speaker 1: can make it, I can improve this or that, and

604
00:25:59,000 --> 00:26:01,040
Speaker 1: that is kind of part of the fun of homeownership,

605
00:26:01,080 --> 00:26:02,919
Speaker 1: but it also adds to the cost. It makes me

606
00:26:02,960 --> 00:26:06,160
Speaker 1: think of the Diddero effect, Matt and it just.

607
00:26:06,320 --> 00:26:08,880
Speaker 2: Saw the classic French philosopher.

608
00:26:08,359 --> 00:26:11,680
Speaker 1: Right, the eighteenth century French philosopher, and he someone gave

609
00:26:11,760 --> 00:26:14,560
Speaker 1: him or I guess he sold his library for like

610
00:26:14,640 --> 00:26:17,040
Speaker 1: the modern equivalent of fifty thousand dollars, and he lived

611
00:26:17,040 --> 00:26:19,040
Speaker 1: in poverty before that he bought this fancy new robe.

612
00:26:19,040 --> 00:26:21,240
Speaker 2: It's more details than I've read in the past.

613
00:26:21,320 --> 00:26:23,480
Speaker 1: Yeah, so I did some just more research into it.

614
00:26:23,520 --> 00:26:26,040
Speaker 1: And but in light of this gorgeous new robe, like

615
00:26:26,119 --> 00:26:28,600
Speaker 1: all of his other possessions just looked into you. They

616
00:26:28,600 --> 00:26:30,720
Speaker 1: look like crap. And so I think that that can

617
00:26:30,760 --> 00:26:32,440
Speaker 1: be the case for a lot of us when we

618
00:26:32,960 --> 00:26:35,720
Speaker 1: when we buy a home, it's like, okay, cool, Yeah,

619
00:26:35,760 --> 00:26:37,919
Speaker 1: starts with a code of paints, but how far can it? Well,

620
00:26:37,920 --> 00:26:39,920
Speaker 1: I'm replacing the floor is now, or you know what,

621
00:26:40,000 --> 00:26:42,880
Speaker 1: I need a new sofa in here because that's what's

622
00:26:42,920 --> 00:26:44,840
Speaker 1: gonna tie the whole room together, or maybe rug I

623
00:26:44,840 --> 00:26:46,800
Speaker 1: don't know, but these are the kind of these are

624
00:26:46,840 --> 00:26:48,359
Speaker 1: the kind of things that happened to all of us

625
00:26:48,400 --> 00:26:52,439
Speaker 1: as homeowners or these subtle psychological polls that cause us

626
00:26:52,440 --> 00:26:55,879
Speaker 1: to consume, and maybe our finances start aspiraling out of

627
00:26:55,880 --> 00:27:00,479
Speaker 1: control because we are just coaxed into spending more than

628
00:27:00,520 --> 00:27:02,880
Speaker 1: we would if we were if we'd remained renting. Sure.

629
00:27:02,960 --> 00:27:06,040
Speaker 2: Yeah, well, and it's not necessarily too that, like maybe

630
00:27:06,040 --> 00:27:07,879
Speaker 2: you love all your stuff, Like maybe you move in

631
00:27:07,920 --> 00:27:10,120
Speaker 2: and you're just like, my stuff looks great in here.

632
00:27:10,440 --> 00:27:11,359
Speaker 1: I love my house.

633
00:27:11,600 --> 00:27:13,679
Speaker 2: But then that's the problem, Like you kind of like

634
00:27:13,720 --> 00:27:15,359
Speaker 2: what you spend a lot of money on a house

635
00:27:16,320 --> 00:27:19,439
Speaker 2: that's where your dollars flow to. It makes sense that

636
00:27:19,480 --> 00:27:22,240
Speaker 2: someone would take maybe a little little bit more pride

637
00:27:22,280 --> 00:27:24,800
Speaker 2: in their house compared to maybe where they're renting before, right,

638
00:27:24,840 --> 00:27:27,560
Speaker 2: And so like once you start having a sense of pride,

639
00:27:27,560 --> 00:27:29,040
Speaker 2: like you start thinking, oh, I want it to look

640
00:27:29,080 --> 00:27:31,720
Speaker 2: even nicer, it's not necessarily that what you have currently,

641
00:27:32,560 --> 00:27:36,480
Speaker 2: like your previous possessions are relatively shabby. It's just that, oh,

642
00:27:36,520 --> 00:27:38,439
Speaker 2: I want this house to be nicer, sure, right, and

643
00:27:38,480 --> 00:27:40,800
Speaker 2: so like you know, well, I'll use myself as an

644
00:27:40,840 --> 00:27:43,359
Speaker 2: example again. But for us, like the landscaping at our

645
00:27:43,359 --> 00:27:46,000
Speaker 2: house that we purchased last year, it was fine, but

646
00:27:46,320 --> 00:27:49,919
Speaker 2: we really like to have an interesting outdoor area, so

647
00:27:49,920 --> 00:27:52,480
Speaker 2: we started going down that direction. So maybe we felt

648
00:27:52,720 --> 00:27:55,800
Speaker 2: prey to that. But maybe it's you moving into the

649
00:27:56,200 --> 00:27:58,119
Speaker 2: you know, a house and you're like, oh, well, you

650
00:27:58,160 --> 00:28:01,360
Speaker 2: can't have lambin at countertops. That's just no, Like, that's

651
00:28:01,480 --> 00:28:02,880
Speaker 2: just so nineteen seventies.

652
00:28:03,359 --> 00:28:04,439
Speaker 1: You know, you got to take care of that.

653
00:28:04,560 --> 00:28:07,240
Speaker 2: Or oh, the carpet over here is you can't just

654
00:28:07,640 --> 00:28:09,440
Speaker 2: a we can't have carpet, but b even if you

655
00:28:09,480 --> 00:28:12,160
Speaker 2: did have carpet, that's dirty carpet. Right, there's no way

656
00:28:12,600 --> 00:28:14,840
Speaker 2: we're not going to run a steamer and actually clean it. No, no, no,

657
00:28:14,920 --> 00:28:16,480
Speaker 2: let's just rip it out and do hard woods.

658
00:28:16,480 --> 00:28:18,320
Speaker 1: Like you said, double edged sort of home ownership. Yeah,

659
00:28:18,320 --> 00:28:19,960
Speaker 1: I think some of it. Those improvements can be a

660
00:28:20,040 --> 00:28:21,919
Speaker 1: blast and it's really exciting to get to kind of

661
00:28:21,920 --> 00:28:23,920
Speaker 1: create your own space. But the flip side of it

662
00:28:23,960 --> 00:28:25,560
Speaker 1: is it cost you money. It can be a money

663
00:28:25,560 --> 00:28:27,440
Speaker 1: so I can absolutely and on top of the fact

664
00:28:27,440 --> 00:28:29,199
Speaker 1: that you're spending a lot more than you would have

665
00:28:29,200 --> 00:28:32,040
Speaker 1: been if you had been running something similar. Also, it's

666
00:28:32,080 --> 00:28:35,520
Speaker 1: also important to mention math that timing is crucial. Timing matters,

667
00:28:35,720 --> 00:28:38,360
Speaker 1: and every market across the country is different. Of course,

668
00:28:38,960 --> 00:28:41,240
Speaker 1: it's easier to buy a home in Mississippi than it

669
00:28:41,240 --> 00:28:44,960
Speaker 1: is in southern California, clearly, But market gyrations can change

670
00:28:44,960 --> 00:28:48,840
Speaker 1: the value proposition meaningfully over time too, And so the

671
00:28:48,880 --> 00:28:51,360
Speaker 1: housing market now is just quite a bit different. It

672
00:28:51,400 --> 00:28:53,920
Speaker 1: looks a lot different than it did a few years ago.

673
00:28:54,200 --> 00:28:57,600
Speaker 1: It's always morphing and changing, and so that value proposition

674
00:28:57,640 --> 00:29:00,640
Speaker 1: that I mentioned, like we would change our tune on

675
00:29:00,840 --> 00:29:04,320
Speaker 1: leasing a car if leasing prices were cut in half, well,

676
00:29:04,480 --> 00:29:07,040
Speaker 1: the value proposition of buying versus renting is different from

677
00:29:07,080 --> 00:29:09,920
Speaker 1: state to state and from market to market as the

678
00:29:09,920 --> 00:29:12,520
Speaker 1: market evolved. So if home ownership is a massive goal

679
00:29:12,560 --> 00:29:15,280
Speaker 1: for you, it's worth it's truly worth asking whether or

680
00:29:15,280 --> 00:29:17,160
Speaker 1: not you'd be willing to move somewhere where the cost

681
00:29:17,200 --> 00:29:20,360
Speaker 1: of housing isn't as expensive. We're all about putting down routes.

682
00:29:20,360 --> 00:29:22,120
Speaker 1: Stay in one place for a long time if you

683
00:29:22,160 --> 00:29:25,560
Speaker 1: love the place where you are, but maybe moving elsewhere

684
00:29:25,680 --> 00:29:27,440
Speaker 1: to a cheaper market makes sense for you if you're

685
00:29:27,480 --> 00:29:31,360
Speaker 1: priced out where you're currently living, or does perpetually renting

686
00:29:31,400 --> 00:29:33,000
Speaker 1: make the most sense if you love where you live

687
00:29:33,320 --> 00:29:35,920
Speaker 1: and just kind of not putting off a dream of

688
00:29:35,920 --> 00:29:37,880
Speaker 1: home ownership, but maybe just being like, hey, maybe that's

689
00:29:37,920 --> 00:29:40,320
Speaker 1: the wrong dream to begin with. Then maybe the real

690
00:29:40,400 --> 00:29:43,880
Speaker 1: dream is something else, and it really is to financial independence,

691
00:29:44,000 --> 00:29:45,720
Speaker 1: which you're going to be able to get more easily

692
00:29:46,040 --> 00:29:48,560
Speaker 1: by renting and investing a heck of a lot more.

693
00:29:48,640 --> 00:29:49,000
Speaker 1: That's right.

694
00:29:49,080 --> 00:29:52,160
Speaker 2: Yeah, So the housing market has changed in recent years,

695
00:29:52,280 --> 00:29:54,520
Speaker 2: and we touched on mortgages earlier more kind of from

696
00:29:54,560 --> 00:29:58,040
Speaker 2: a principal standpoint as to the power that it can

697
00:29:58,400 --> 00:30:01,560
Speaker 2: have if the wins you're back, but the problems that

698
00:30:01,560 --> 00:30:03,240
Speaker 2: you can face if that wind is blown in your face.

699
00:30:03,520 --> 00:30:06,240
Speaker 2: But the specific rates that folks are paying right now,

700
00:30:06,280 --> 00:30:08,880
Speaker 2: like the mortgage rate environment, like that is also changing

701
00:30:08,920 --> 00:30:10,520
Speaker 2: the dynamics of home ownership.

702
00:30:10,600 --> 00:30:10,719
Speaker 1: Now.

703
00:30:10,760 --> 00:30:12,800
Speaker 2: There was an article in the journal just last week

704
00:30:12,840 --> 00:30:16,280
Speaker 2: about the diverging paths of folks who bought a home

705
00:30:16,360 --> 00:30:18,200
Speaker 2: just a few years ago and then the folks who

706
00:30:18,280 --> 00:30:21,360
Speaker 2: purchased a home within the past six to nine months.

707
00:30:21,840 --> 00:30:25,360
Speaker 2: We've previously said to avoid being a quote unquote payment

708
00:30:25,480 --> 00:30:30,160
Speaker 2: buyer where you're only considering the monthly payments, Well, that

709
00:30:30,560 --> 00:30:33,560
Speaker 2: doesn't mean that you should ignore the interest rate altogether,

710
00:30:33,760 --> 00:30:37,120
Speaker 2: because they influence the payment on a home purchase massively.

711
00:30:37,680 --> 00:30:39,600
Speaker 2: Any want to be home buyers out there, they know

712
00:30:39,680 --> 00:30:42,880
Speaker 2: that interest rates aren't their friend right now. About those fluctuations,

713
00:30:42,880 --> 00:30:46,320
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 --> 00:30:56,560
Speaker 2: continue your home search if you are seeing.

717
00:30:56,400 --> 00:30:58,840
Speaker 1: Rates go up. I think interest rates should determine the

718
00:30:58,840 --> 00:31:00,880
Speaker 1: purchase of a whole lot of other things, a whole

719
00:31:00,920 --> 00:31:03,760
Speaker 1: lot less because oh, what's the APR and your credit card?

720
00:31:03,880 --> 00:31:06,640
Speaker 1: Guess what? For how to money listeners, it shouldn't. I

721
00:31:06,680 --> 00:31:08,600
Speaker 1: don't care because you should be paying it off on

722
00:31:08,600 --> 00:31:10,239
Speaker 1: time and in full of your month. It doesn't matter if

723
00:31:10,280 --> 00:31:12,960
Speaker 1: the APR my credit card is eighty two percent, because

724
00:31:13,480 --> 00:31:15,600
Speaker 1: I've got that set up for auto pay and I'm

725
00:31:15,600 --> 00:31:18,160
Speaker 1: paying the full statement balance. Same thing with a car,

726
00:31:18,240 --> 00:31:20,040
Speaker 1: like I'd rather you not take out a car loan,

727
00:31:20,080 --> 00:31:22,640
Speaker 1: and so it doesn't matter if Yeah, we talked about

728
00:31:22,760 --> 00:31:25,080
Speaker 1: really care about car loan? Sure, interest rates on cars

729
00:31:25,280 --> 00:31:27,840
Speaker 1: used a new use. The new car loans have gone up,

730
00:31:28,080 --> 00:31:30,200
Speaker 1: But the goal is to not have a car payment

731
00:31:30,240 --> 00:31:34,880
Speaker 1: at all. Right, That's but for almost everybody listening, not

732
00:31:35,280 --> 00:31:38,080
Speaker 1: being able to avoid a mortgage is an impossibility. The

733
00:31:38,120 --> 00:31:39,800
Speaker 1: same with Matt and I. We've had a mortgage on

734
00:31:39,840 --> 00:31:43,440
Speaker 1: every property and that's okay, it's just what are the

735
00:31:43,520 --> 00:31:46,440
Speaker 1: terms of that mortgage? They massively influence more than any

736
00:31:46,440 --> 00:31:48,640
Speaker 1: other product, like what you can afford what you should

737
00:31:48,680 --> 00:31:51,440
Speaker 1: be looking at totally. It's also important, Matt, to mention

738
00:31:51,680 --> 00:31:54,560
Speaker 1: equity and which is it's a different beast than money

739
00:31:54,600 --> 00:31:57,040
Speaker 1: that you've accumulated in the market. And so a home

740
00:31:57,480 --> 00:32:00,000
Speaker 1: is an ill liquid asset, which means it's more difficult

741
00:32:00,200 --> 00:32:03,480
Speaker 1: and often expensive to tap your home equity or to

742
00:32:03,480 --> 00:32:05,240
Speaker 1: to come by it in some way form or fashion.

743
00:32:05,400 --> 00:32:06,920
Speaker 1: And so if you do opt to grab some of

744
00:32:06,920 --> 00:32:09,480
Speaker 1: those wealth gains via a home equity line of credit

745
00:32:09,600 --> 00:32:12,200
Speaker 1: or something like that, you start putting the asset that

746
00:32:12,640 --> 00:32:15,240
Speaker 1: keeps a roof over your head at risk, right. And

747
00:32:15,320 --> 00:32:17,640
Speaker 1: so what do you do with the wealth you accumulate

748
00:32:17,920 --> 00:32:20,960
Speaker 1: in a house? Our advice has always been mostly to

749
00:32:21,040 --> 00:32:23,280
Speaker 1: leave it alone. You might yes take some to make

750
00:32:23,320 --> 00:32:26,000
Speaker 1: some small improvements to your house or something like that.

751
00:32:26,000 --> 00:32:28,880
Speaker 1: That is typically the best use of home equity is

752
00:32:28,920 --> 00:32:31,080
Speaker 1: to make improvements when you want to over time. But

753
00:32:31,120 --> 00:32:33,600
Speaker 1: the fact that your net worth has grown because you're

754
00:32:33,680 --> 00:32:36,080
Speaker 1: the equity and your home has grown really shouldn't change

755
00:32:36,080 --> 00:32:38,160
Speaker 1: the way you live your day to day life, although

756
00:32:38,200 --> 00:32:41,040
Speaker 1: I feel like it can more if you are investing

757
00:32:41,080 --> 00:32:44,120
Speaker 1: in the market and those funds are just easier to access,

758
00:32:44,200 --> 00:32:46,840
Speaker 1: especially if you're investing some of those some of that

759
00:32:46,880 --> 00:32:49,600
Speaker 1: money in like a brokerage account. But Matt, it's not

760
00:32:49,640 --> 00:32:51,840
Speaker 1: all doom and gloom, and we do you and I

761
00:32:51,920 --> 00:32:54,960
Speaker 1: own houses. We own multiple houses because we're landlords as well,

762
00:32:55,200 --> 00:32:58,040
Speaker 1: and so we're not completely against home ownership. We just

763
00:32:58,080 --> 00:32:59,720
Speaker 1: want people like you said, to go in with eyes

764
00:33:00,120 --> 00:33:02,840
Speaker 1: wide open. Let's talk about the benefits of home ownership,

765
00:33:02,840 --> 00:33:05,640
Speaker 1: and then maybe some of the prerequisites for before you

766
00:33:05,680 --> 00:33:08,040
Speaker 1: start looking to buy a home where we think you

767
00:33:08,080 --> 00:33:10,560
Speaker 1: should be financially before you start that search. We'll get

768
00:33:10,560 --> 00:33:12,080
Speaker 1: to that and more right after this.

769
00:33:21,720 --> 00:33:23,880
Speaker 2: All right, we are back in jil You know, we

770
00:33:23,920 --> 00:33:25,720
Speaker 2: have dunked on home buying.

771
00:33:25,480 --> 00:33:25,960
Speaker 1: Quite a bit.

772
00:33:26,320 --> 00:33:29,320
Speaker 2: But the truth is we mostly like owning our own homes,

773
00:33:29,800 --> 00:33:31,880
Speaker 2: even with all the trade offs, with all the downsides

774
00:33:31,880 --> 00:33:35,040
Speaker 2: that 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
00:33:37,520 --> 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 --> 00:33:44,160
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 --> 00:33:59,960
Speaker 1: thinking twice much more. I'll be looking at the rent

785
00:34:00,080 --> 00:34:00,480
Speaker 1: the market.

786
00:34:00,600 --> 00:34:02,520
Speaker 2: But that being said, one of the reasons that we

787
00:34:02,520 --> 00:34:06,400
Speaker 2: were like it wasn't just financial reasons though, right like

788
00:34:06,440 --> 00:34:09,400
Speaker 2: it made sense from like a lifestyle standpoint. There are

789
00:34:09,440 --> 00:34:12,319
Speaker 2: these intangibles, and when you own your own place, you've

790
00:34:12,320 --> 00:34:14,719
Speaker 2: got a little more stability at home. Right Like, you

791
00:34:14,880 --> 00:34:18,160
Speaker 2: know that there isn't a landlord out there who might

792
00:34:18,320 --> 00:34:21,200
Speaker 2: either drastically raise rent on you or even just kick

793
00:34:21,239 --> 00:34:23,440
Speaker 2: you out because they've decided to sell the place because

794
00:34:24,200 --> 00:34:26,359
Speaker 2: hope values have shot through the roof and it's time

795
00:34:26,360 --> 00:34:27,120
Speaker 2: for them to cash out.

796
00:34:27,400 --> 00:34:28,840
Speaker 1: So if you decide to stay.

797
00:34:28,600 --> 00:34:31,520
Speaker 2: In that home long term, you just know where you're

798
00:34:31,560 --> 00:34:34,359
Speaker 2: going to be a decade or two from now. When

799
00:34:34,400 --> 00:34:36,440
Speaker 2: it comes to renting, not so much. You might know

800
00:34:36,480 --> 00:34:38,560
Speaker 2: where we're going to be for the next ten months,

801
00:34:39,040 --> 00:34:40,080
Speaker 2: but beyond that, who knows.

802
00:34:40,320 --> 00:34:42,239
Speaker 1: Yeah, I do think that that is one of the

803
00:34:42,280 --> 00:34:44,960
Speaker 1: biggest benefits, the putting down roots, the knowing where you're

804
00:34:45,000 --> 00:34:47,040
Speaker 1: going to be, especially if that's where you want to

805
00:34:47,040 --> 00:34:49,080
Speaker 1: be and you don't want to leave. I know people

806
00:34:49,080 --> 00:34:51,080
Speaker 1: who have been long term tenants in certain places. I

807
00:34:51,120 --> 00:34:53,239
Speaker 1: had a neighbor two doors down back when we lived

808
00:34:53,239 --> 00:34:55,960
Speaker 1: in town, Matt and his landlord sold the house and

809
00:34:56,000 --> 00:34:58,000
Speaker 1: he had been there for like fourteen or fifteen years,

810
00:34:58,160 --> 00:35:00,200
Speaker 1: and he was devastated because he couldn't afford buy and

811
00:35:00,719 --> 00:35:02,279
Speaker 1: he had to find somewhere else to live. But he

812
00:35:02,360 --> 00:35:04,960
Speaker 1: had like buy in, he had stake in that neighborhood,

813
00:35:05,120 --> 00:35:06,440
Speaker 1: and I was so sad to see him go. I

814
00:35:06,520 --> 00:35:08,120
Speaker 1: was like, I wish I had like an adu in

815
00:35:08,120 --> 00:35:10,360
Speaker 1: the backyard, man that you could live in. But that

816
00:35:10,960 --> 00:35:14,160
Speaker 1: is there are a lot of renters who do want

817
00:35:14,160 --> 00:35:16,560
Speaker 1: that sort of buy in, but they aren't guaranteed it

818
00:35:16,640 --> 00:35:19,160
Speaker 1: right if they're renting and not owning. And so I

819
00:35:19,160 --> 00:35:22,400
Speaker 1: think another perk of home ownership is customization abilities. We

820
00:35:22,480 --> 00:35:24,080
Speaker 1: kind of talked about the downsides of that with like

821
00:35:24,120 --> 00:35:25,400
Speaker 1: the Didero effect and how.

822
00:35:25,400 --> 00:35:26,840
Speaker 2: How it could be expensive.

823
00:35:26,960 --> 00:35:28,960
Speaker 1: Sure, but it's also one of the most joyous things

824
00:35:28,960 --> 00:35:31,480
Speaker 1: about owning a home, right, you're being able to transform

825
00:35:31,480 --> 00:35:34,279
Speaker 1: that space and turning it into the place you want

826
00:35:34,320 --> 00:35:37,800
Speaker 1: to live. And really, like, if you're renting, yeah, you

827
00:35:37,840 --> 00:35:39,880
Speaker 1: can ask your landlord about painting or putting up some

828
00:35:39,920 --> 00:35:42,040
Speaker 1: wallpaper or something like that, but they might say no.

829
00:35:42,200 --> 00:35:44,719
Speaker 1: And even that is just kind of a basic adjustment.

830
00:35:44,800 --> 00:35:46,320
Speaker 1: But yeah, you're surely not going to be able to

831
00:35:46,480 --> 00:35:49,800
Speaker 1: knock down walls or alter the layout or modify the space.

832
00:35:50,239 --> 00:35:52,120
Speaker 1: And you wouldn't want to, right because you, like, you

833
00:35:52,160 --> 00:35:54,040
Speaker 1: wouldn't want to spend that much money because you know

834
00:35:54,080 --> 00:35:55,920
Speaker 1: that there's a chance I might only be here for

835
00:35:55,960 --> 00:35:56,640
Speaker 1: a year or two.

836
00:35:56,680 --> 00:36:00,720
Speaker 2: Like this, Like, you are entering into that how arrangement

837
00:36:00,760 --> 00:36:03,279
Speaker 2: with a temporary mindset, and when you do that, you're

838
00:36:03,320 --> 00:36:06,160
Speaker 2: not really willing to put forth the resources, whether it's

839
00:36:06,200 --> 00:36:09,160
Speaker 2: time or money, in order to make it feel a

840
00:36:09,160 --> 00:36:11,279
Speaker 2: little bit more like home. Honestly, I think that's one

841
00:36:11,280 --> 00:36:16,080
Speaker 2: of the downsides of renting, And I don't want to

842
00:36:16,120 --> 00:36:17,600
Speaker 2: put it in a negative light, so I'll say it's

843
00:36:17,640 --> 00:36:20,480
Speaker 2: one of the upsides of owning your home is that

844
00:36:20,520 --> 00:36:23,760
Speaker 2: it can I think it can have a more positive

845
00:36:23,760 --> 00:36:27,000
Speaker 2: impact on maybe the depth of relationships or the amount

846
00:36:27,000 --> 00:36:29,239
Speaker 2: of community that you're able to build up around you.

847
00:36:29,280 --> 00:36:31,080
Speaker 2: Because if you are, say you're just renting a house,

848
00:36:31,120 --> 00:36:32,759
Speaker 2: and you're thinking, all right, I'm you know, I'll live

849
00:36:32,800 --> 00:36:35,000
Speaker 2: here for maybe twelve months, maybe I'll push that out

850
00:36:35,000 --> 00:36:36,680
Speaker 2: to eighteen, maybe even twenty four months.

851
00:36:36,719 --> 00:36:37,240
Speaker 1: We'll see.

852
00:36:37,640 --> 00:36:40,480
Speaker 2: I think when you enter into that that mindset with

853
00:36:40,800 --> 00:36:43,320
Speaker 2: a transient mindset, I don't think you're going to be

854
00:36:43,360 --> 00:36:46,879
Speaker 2: as willing to build relationships. Right, Like the people who

855
00:36:46,920 --> 00:36:49,359
Speaker 2: live on your street, they're your neighbors, and you might

856
00:36:49,360 --> 00:36:51,000
Speaker 2: not be doing it on purpose. It's just like a

857
00:36:51,000 --> 00:36:54,960
Speaker 2: subtle sense exactly exactly. Yeah, but if you were to

858
00:36:54,960 --> 00:36:56,600
Speaker 2: buy that home, the people who live on your street,

859
00:36:56,960 --> 00:37:00,200
Speaker 2: they are potential friends, you know, it's like, oh, not

860
00:37:00,239 --> 00:37:04,239
Speaker 2: only friends, yeah, and like friends and resources and teachers.

861
00:37:04,480 --> 00:37:05,760
Speaker 1: It just it feels there's.

862
00:37:06,040 --> 00:37:08,080
Speaker 2: I don't know, it's like I'm trying to be approach

863
00:37:08,080 --> 00:37:10,400
Speaker 2: it from like a wholesome kind of There is a

864
00:37:10,560 --> 00:37:12,200
Speaker 2: change that happens, and like you said, it may not

865
00:37:12,239 --> 00:37:14,319
Speaker 2: even be all that intentional. But when you know in

866
00:37:14,360 --> 00:37:15,880
Speaker 2: the back of your mind that you may not be

867
00:37:15,920 --> 00:37:18,200
Speaker 2: there for that long, well why not spend your time

868
00:37:18,239 --> 00:37:22,319
Speaker 2: and energy on something else that isn't tied geographically to

869
00:37:22,400 --> 00:37:24,200
Speaker 2: a location, right, like you would spend maybe some of

870
00:37:24,280 --> 00:37:27,440
Speaker 2: your extra time and energy on your career because guess what,

871
00:37:27,800 --> 00:37:30,160
Speaker 2: if you were to up and move on, you take

872
00:37:30,200 --> 00:37:32,399
Speaker 2: your career with you. It doesn't necessarily have to do

873
00:37:32,680 --> 00:37:33,839
Speaker 2: with that particular house.

874
00:37:34,160 --> 00:37:37,760
Speaker 1: Yes, I think that is a big plus in favor

875
00:37:37,760 --> 00:37:39,440
Speaker 1: of buying a house. You know where you're going to be,

876
00:37:39,800 --> 00:37:41,439
Speaker 1: you know who your neighbors is going to be. I mean, yeah,

877
00:37:41,440 --> 00:37:42,680
Speaker 1: some of them are going to move on too, but

878
00:37:42,719 --> 00:37:45,880
Speaker 1: it's it looks a lot different for sure, and you

879
00:37:46,000 --> 00:37:48,160
Speaker 1: enter into it with a different mindset, and I don't know,

880
00:37:48,200 --> 00:37:50,480
Speaker 1: I think that's powerful. But let's talk about some of

881
00:37:50,520 --> 00:37:52,840
Speaker 1: the prerequisites, some of the things that we want people

882
00:37:52,880 --> 00:37:56,120
Speaker 1: to consider and to think through before they kind of

883
00:37:56,280 --> 00:37:59,640
Speaker 1: start perusing Zillow, find an agent and start trying to

884
00:37:59,640 --> 00:38:02,239
Speaker 1: get pre qualified. And so, yeah, even though we've spent

885
00:38:02,280 --> 00:38:05,440
Speaker 1: the majority of this episode really kind of discussing the

886
00:38:05,440 --> 00:38:08,360
Speaker 1: dirty truths of home ownership and much less time discussing

887
00:38:08,400 --> 00:38:11,520
Speaker 1: the pros of it, those benefits can be so incredibly

888
00:38:11,520 --> 00:38:14,040
Speaker 1: powerful that they can be enough to push you in

889
00:38:14,080 --> 00:38:17,120
Speaker 1: the buying direction. So let's discuss what an aspiring homeowner

890
00:38:17,239 --> 00:38:20,040
Speaker 1: needs to consider really before they start making offers. Right,

891
00:38:20,680 --> 00:38:23,480
Speaker 1: and the first, the number one part piece of this

892
00:38:23,560 --> 00:38:26,560
Speaker 1: MATT is understanding how long you plan to own the home.

893
00:38:26,800 --> 00:38:29,600
Speaker 1: That's got to be the top factor, right, and like

894
00:38:29,840 --> 00:38:32,000
Speaker 1: five to seven years is a good rule of thumb,

895
00:38:32,040 --> 00:38:34,040
Speaker 1: but given where home prices are right now, I want

896
00:38:34,040 --> 00:38:37,440
Speaker 1: to extend, maybe go to the longer side of that timeline,

897
00:38:37,480 --> 00:38:40,120
Speaker 1: maybe more like seven or eight years. Because if you're

898
00:38:40,120 --> 00:38:42,600
Speaker 1: buying a home and hopes it's going to appreciate in

899
00:38:42,640 --> 00:38:45,640
Speaker 1: the next two or three years like homes have over

900
00:38:45,640 --> 00:38:47,640
Speaker 1: the past few years, you might think, Oh cool, I'm

901
00:38:47,640 --> 00:38:48,960
Speaker 1: gonna make out like a bandit. I'm going to buy

902
00:38:48,960 --> 00:38:50,480
Speaker 1: this home. I can barely afford it. But if I

903
00:38:50,520 --> 00:38:52,680
Speaker 1: can afford it for twenty four months and then flip it,

904
00:38:52,920 --> 00:38:55,400
Speaker 1: I'm going to be just fine. Well, the likelihood that

905
00:38:55,440 --> 00:38:58,319
Speaker 1: you get burned goes up so much more if you're

906
00:38:58,360 --> 00:39:00,799
Speaker 1: approaching a home purchase like that. So time is your

907
00:39:00,800 --> 00:39:03,960
Speaker 1: friend on Even if you overpay a little bit, that's okay,

908
00:39:04,040 --> 00:39:05,760
Speaker 1: as long as you plan to stay in that home

909
00:39:06,120 --> 00:39:08,440
Speaker 1: for a long enough period of time to make up

910
00:39:08,520 --> 00:39:10,920
Speaker 1: for that slide amount where you overpaid. Right, Like the

911
00:39:10,920 --> 00:39:13,200
Speaker 1: longer you can commit to owning that home, the better

912
00:39:13,239 --> 00:39:14,560
Speaker 1: decision it's likely to be. Yeah.

913
00:39:14,600 --> 00:39:16,200
Speaker 2: Well, and you said owning that home. I think there's

914
00:39:16,200 --> 00:39:19,200
Speaker 2: a difference too, between owning that home and living in

915
00:39:19,200 --> 00:39:21,439
Speaker 2: that home, because as long as you own it, then

916
00:39:21,600 --> 00:39:24,640
Speaker 2: it's like it's okay for you to not necessarily continue

917
00:39:24,800 --> 00:39:27,960
Speaker 2: living in there. And so what I'm hinting at here

918
00:39:28,040 --> 00:39:32,800
Speaker 2: is converting that primary residence into an investment property. Joel,

919
00:39:32,800 --> 00:39:35,960
Speaker 2: that was like your first investment property happened to be

920
00:39:36,000 --> 00:39:38,480
Speaker 2: the first house that you purchased as your primary residence,

921
00:39:38,480 --> 00:39:41,960
Speaker 2: and my second rental property was a second nd exactly. Yeah, yeah, mine.

922
00:39:42,200 --> 00:39:44,080
Speaker 2: We really liked our first home, and then we ended

923
00:39:44,120 --> 00:39:47,759
Speaker 2: up actually buying separate investment properties. But that can be

924
00:39:47,760 --> 00:39:50,439
Speaker 2: a next one. It's not about you necessarily living there.

925
00:39:50,560 --> 00:39:54,439
Speaker 2: It's about you maintaining that ownership because the transaction costs

926
00:39:54,480 --> 00:39:56,880
Speaker 2: are so sninking high, and if you have an ability

927
00:39:56,920 --> 00:39:59,440
Speaker 2: to amortize that, if you have an ability to stretch

928
00:39:59,480 --> 00:40:03,279
Speaker 2: those expenses outs over a longer period of time, all

929
00:40:03,320 --> 00:40:06,640
Speaker 2: the while, hopefully the while the value of that home

930
00:40:06,760 --> 00:40:09,799
Speaker 2: is continuing to rise, you're gonna end up in a

931
00:40:09,840 --> 00:40:13,920
Speaker 2: stronger position from a financial standpoint, but also let's talk

932
00:40:13,960 --> 00:40:17,800
Speaker 2: about the down payment required, because three quarters of folks

933
00:40:17,920 --> 00:40:20,400
Speaker 2: who want to buy a home, they haven't even saved

934
00:40:20,600 --> 00:40:24,360
Speaker 2: a dime. That doesn't bode well. If you can't save

935
00:40:24,480 --> 00:40:26,759
Speaker 2: up a meaningful and down payment, then how are you

936
00:40:26,800 --> 00:40:29,040
Speaker 2: gonna be able to afford some of those other increased

937
00:40:29,080 --> 00:40:31,600
Speaker 2: costs that we just talked about, some of those unexpected costs.

938
00:40:31,360 --> 00:40:33,760
Speaker 1: For folks who can't save a down payment. I realize

939
00:40:33,760 --> 00:40:35,799
Speaker 1: it's difficult and it's a large sum of money, but

940
00:40:36,360 --> 00:40:38,000
Speaker 1: that's what I always come back to, is like, cool,

941
00:40:38,280 --> 00:40:40,719
Speaker 1: if you can't do this, if you can't find the

942
00:40:40,719 --> 00:40:42,680
Speaker 1: skin to give in the game, how are you gonna

943
00:40:42,680 --> 00:40:45,640
Speaker 1: be able to afford the increased costs every single month,

944
00:40:45,680 --> 00:40:47,359
Speaker 1: every single year for years to come. Yeah.

945
00:40:47,400 --> 00:40:49,080
Speaker 2: Well, and we didn't even talk about some of like

946
00:40:49,080 --> 00:40:52,840
Speaker 2: the more like phantom hidden costs of like a potential hoa,

947
00:40:53,520 --> 00:40:55,759
Speaker 2: or the fact that most homes are probably they tend

948
00:40:55,800 --> 00:40:57,880
Speaker 2: to be a little bit larger than the little apartment

949
00:40:57,880 --> 00:40:59,880
Speaker 2: that you're running. So you're talking about increased utility call,

950
00:41:00,120 --> 00:41:03,800
Speaker 2: you're talking about taxes, the property taxes because you're buying

951
00:41:03,840 --> 00:41:06,520
Speaker 2: an up and coming part of town, and guess what

952
00:41:06,719 --> 00:41:09,640
Speaker 2: the fact that you even bought that house guarantees almost

953
00:41:09,640 --> 00:41:13,080
Speaker 2: guarantees I should say that the estimated value of that

954
00:41:13,160 --> 00:41:16,160
Speaker 2: home is more than what it was, you know, with

955
00:41:16,200 --> 00:41:17,719
Speaker 2: the tax records show previously.

956
00:41:17,760 --> 00:41:20,759
Speaker 1: I've talked to a lot of neighbors in nearby who

957
00:41:20,840 --> 00:41:22,640
Speaker 1: own a home and they're like, you just get that

958
00:41:22,680 --> 00:41:24,400
Speaker 1: tax bill because this is like the season to get them.

959
00:41:24,440 --> 00:41:25,840
Speaker 1: Oh yeah, And there.

960
00:41:26,239 --> 00:41:28,040
Speaker 2: They're looking at you and they're like, dang, you Joel

961
00:41:28,320 --> 00:41:30,480
Speaker 2: spending that much on their house because it raises.

962
00:41:30,280 --> 00:41:32,200
Speaker 1: The value of all the house and their faces were

963
00:41:32,200 --> 00:41:35,920
Speaker 1: pale white. But all my rental friends living in complete happiness,

964
00:41:35,960 --> 00:41:37,880
Speaker 1: and they're not even thinking about that stuff. And not

965
00:41:37,960 --> 00:41:40,799
Speaker 1: that taxes don't influence the price of rentals. They do,

966
00:41:41,120 --> 00:41:43,000
Speaker 1: but not to the same extent. There's still just this

967
00:41:43,080 --> 00:41:45,520
Speaker 1: massive discrepancy right now in so much of the country

968
00:41:45,560 --> 00:41:48,480
Speaker 1: between rental prices and what you would be shelling out

969
00:41:48,480 --> 00:41:50,759
Speaker 1: every month to buy a home. And I think a

970
00:41:50,760 --> 00:41:53,439
Speaker 1: lot of people think, well, the landlord's gonna be able

971
00:41:53,480 --> 00:41:55,960
Speaker 1: to just boost rent by the amount that the taxes

972
00:41:55,960 --> 00:41:58,400
Speaker 1: go up, and they might try, but if it's not

973
00:41:58,400 --> 00:42:00,000
Speaker 1: competitive in the market, they won't be able to.

974
00:42:00,640 --> 00:42:05,640
Speaker 2: It's a slow boost. It's a gradual, slow moving freight train.

975
00:42:06,400 --> 00:42:09,399
Speaker 2: But for all the aspiring homeowners out there, we would

976
00:42:09,480 --> 00:42:12,719
Speaker 2: love to see you put down twenty percent, which we'll

977
00:42:12,719 --> 00:42:14,720
Speaker 2: often like, that's going to net you the best rates

978
00:42:14,760 --> 00:42:18,840
Speaker 2: in terms while also whittling down those payments. But again

979
00:42:19,239 --> 00:42:22,720
Speaker 2: we understand that that can be an incredible sum of money.

980
00:42:22,760 --> 00:42:25,799
Speaker 2: And so if you're a first time home buyer, we'll

981
00:42:25,840 --> 00:42:28,040
Speaker 2: say that it is okay to put down less, but

982
00:42:28,320 --> 00:42:31,560
Speaker 2: saving up a meaningful chunk is just a necessity no

983
00:42:31,640 --> 00:42:33,239
Speaker 2: matter what. We want to make sure that you've got

984
00:42:33,239 --> 00:42:36,640
Speaker 2: skin in the game, while simultaneously unders like we understand

985
00:42:36,719 --> 00:42:39,840
Speaker 2: that it's not purely a financial decision that drives whether

986
00:42:39,920 --> 00:42:41,200
Speaker 2: or not that you can buy a home. There are

987
00:42:41,239 --> 00:42:44,440
Speaker 2: other life reasons to purchase a home, and we think

988
00:42:44,440 --> 00:42:46,799
Speaker 2: that those can be just as important. It's not just

989
00:42:46,840 --> 00:42:49,400
Speaker 2: about the numbers, it's about what it is that what

990
00:42:49,440 --> 00:42:50,080
Speaker 2: your life to look like.

991
00:42:50,080 --> 00:42:52,480
Speaker 1: I wouldn't make an idiotic financial decision because of those

992
00:42:52,480 --> 00:42:55,600
Speaker 1: life decisions, but correct those certainly way in and you

993
00:42:55,680 --> 00:42:58,480
Speaker 1: might be willing to trade off some of those some

994
00:42:58,520 --> 00:43:01,759
Speaker 1: of those financial things. It might mean, hey, you're going

995
00:43:01,760 --> 00:43:03,120
Speaker 1: out to eat less or something like that. That's a

996
00:43:03,120 --> 00:43:05,399
Speaker 1: worthwhile trade off right to own a home if that's

997
00:43:05,400 --> 00:43:07,120
Speaker 1: what you really want and if you found the right

998
00:43:07,120 --> 00:43:09,560
Speaker 1: place to settle down. But it's also important to know that.

999
00:43:09,680 --> 00:43:11,719
Speaker 1: And by the way, Matt, you mentioned the down payment. Yeah,

1000
00:43:11,719 --> 00:43:13,319
Speaker 1: you got to save that up. But at the same time,

1001
00:43:13,600 --> 00:43:16,480
Speaker 1: you have to keep that emergency fund on hand even

1002
00:43:16,520 --> 00:43:17,600
Speaker 1: as you're buying that home, right.

1003
00:43:17,600 --> 00:43:21,000
Speaker 2: Yeah, Yeah, don't tap into that, like, keep that margin

1004
00:43:21,160 --> 00:43:21,800
Speaker 2: on hand.

1005
00:43:21,600 --> 00:43:23,560
Speaker 1: Because, like we said, cost likely to go up. You

1006
00:43:23,640 --> 00:43:25,080
Speaker 1: might want to do some things to the house, but

1007
00:43:25,320 --> 00:43:27,600
Speaker 1: what if you lost your job two months after buying

1008
00:43:27,640 --> 00:43:30,240
Speaker 1: that home. You want to make sure that you haven't

1009
00:43:30,239 --> 00:43:33,520
Speaker 1: depleted your emergency fund completely in an effort just to

1010
00:43:33,760 --> 00:43:36,280
Speaker 1: get your hands on that house, right, And so yeah,

1011
00:43:36,760 --> 00:43:39,080
Speaker 1: plan for at least three months worth of living expenses

1012
00:43:39,480 --> 00:43:41,960
Speaker 1: even after all the costs you're going to incur when

1013
00:43:41,960 --> 00:43:43,879
Speaker 1: you close on that house that you're buying.

1014
00:43:43,920 --> 00:43:46,400
Speaker 2: Yeah, don't forget all like the prepaids, because a lot

1015
00:43:46,400 --> 00:43:48,040
Speaker 2: of times you'll be like, oh, yeah, the tax bill

1016
00:43:48,080 --> 00:43:50,480
Speaker 2: comes out in March and you're buying this summer, so

1017
00:43:50,680 --> 00:43:52,360
Speaker 2: we're actually going to pro rate and there's gonna be

1018
00:43:52,400 --> 00:43:54,279
Speaker 2: six months worth of taxes that you have to come

1019
00:43:54,320 --> 00:43:56,359
Speaker 2: to the table with and you're like, wait, what, that's

1020
00:43:56,880 --> 00:43:59,760
Speaker 2: thousands of dollars that you weren't necessarily expecting to pay.

1021
00:44:00,040 --> 00:44:02,560
Speaker 2: Those are the kind of expenses that kind of see

1022
00:44:02,680 --> 00:44:03,960
Speaker 2: it seems like that they just kind of pop out

1023
00:44:03,960 --> 00:44:04,920
Speaker 2: of nowhere that you have.

1024
00:44:05,040 --> 00:44:07,040
Speaker 1: That's why you got like that stat about I think

1025
00:44:07,040 --> 00:44:08,919
Speaker 1: it was seventy seven percent of people not having saved

1026
00:44:08,960 --> 00:44:10,919
Speaker 1: a dime when they want to buy a home. It's

1027
00:44:10,960 --> 00:44:14,200
Speaker 1: so sobering because I'm like, there's all of these ancillary

1028
00:44:14,280 --> 00:44:16,120
Speaker 1: costs that come along with it. And if you haven't

1029
00:44:16,120 --> 00:44:18,280
Speaker 1: even thought about the down payment, if you haven't started

1030
00:44:18,480 --> 00:44:22,120
Speaker 1: day one putting money aside for it, you're so far

1031
00:44:22,200 --> 00:44:24,480
Speaker 1: off from being ready to do that. Maybe it's just

1032
00:44:24,480 --> 00:44:27,319
Speaker 1: just pie in the sky hope for people. Hey, yeah,

1033
00:44:27,400 --> 00:44:29,319
Speaker 1: someday down the line, I'd like to own a home.

1034
00:44:29,600 --> 00:44:31,360
Speaker 1: But if you want that goal to become a reality,

1035
00:44:31,600 --> 00:44:33,920
Speaker 1: you got to start setting money aside for it right now.

1036
00:44:33,960 --> 00:44:34,319
Speaker 1: That's right.

1037
00:44:34,400 --> 00:44:35,920
Speaker 2: Yeah, the last thing that you want to do is

1038
00:44:36,000 --> 00:44:38,520
Speaker 2: just buy a house, move into a home that you

1039
00:44:38,560 --> 00:44:41,640
Speaker 2: were barely able to afford. Then you're hit with, you know,

1040
00:44:41,640 --> 00:44:45,000
Speaker 2: a bunch of unexpected expenses that just leave you incredibly

1041
00:44:45,080 --> 00:44:47,560
Speaker 2: financially vulnerable, like you mentioned getting laid off from a job,

1042
00:44:47,680 --> 00:44:49,800
Speaker 2: or like what if you get sick and you have

1043
00:44:49,840 --> 00:44:52,160
Speaker 2: a high deductible plan and you got to reach a

1044
00:44:52,160 --> 00:44:56,239
Speaker 2: ten thousand, eleven thousand dollars deductible before the insurance kicks in,

1045
00:44:56,320 --> 00:44:58,480
Speaker 2: like that kind of thing, and you can't to you

1046
00:44:58,520 --> 00:45:00,640
Speaker 2: need a plan for it, and you needn't need that margin.

1047
00:45:00,400 --> 00:45:02,920
Speaker 1: Needs to be there, and you can't plan fully for everything,

1048
00:45:03,000 --> 00:45:05,319
Speaker 1: of course, right if that's what some insurance products are

1049
00:45:05,360 --> 00:45:07,279
Speaker 1: there to help you with, but it's also true that

1050
00:45:07,360 --> 00:45:09,879
Speaker 1: you can't. There's not really an insurance product for losing

1051
00:45:09,880 --> 00:45:11,480
Speaker 1: your job and not be able to pay your mortgage.

1052
00:45:11,520 --> 00:45:13,680
Speaker 2: Yeah, and at the very least, like in my mind,

1053
00:45:13,680 --> 00:45:17,280
Speaker 2: this is a non negotiable having the emergency fund set aside,

1054
00:45:17,280 --> 00:45:19,239
Speaker 2: because like when it comes to the down payment, it's

1055
00:45:19,239 --> 00:45:21,240
Speaker 2: not ideal, but it's okay for you to not necessarily

1056
00:45:21,280 --> 00:45:23,600
Speaker 2: have that twenty percent even though that's one hundred percent ideal,

1057
00:45:23,840 --> 00:45:25,960
Speaker 2: because if you aren't able to put down that full

1058
00:45:26,000 --> 00:45:29,040
Speaker 2: twenty percent, it means, yeah, your mortgage rate, it may

1059
00:45:29,040 --> 00:45:31,440
Speaker 2: not be the absolute most competitive rate, but it's going

1060
00:45:31,520 --> 00:45:34,319
Speaker 2: to be pretty dan close to what most lenders are

1061
00:45:34,320 --> 00:45:36,320
Speaker 2: offering for a twenty percent down and you're gonna have

1062
00:45:36,360 --> 00:45:38,560
Speaker 2: to pay a little bit extra for PMI, right, But

1063
00:45:38,640 --> 00:45:40,400
Speaker 2: like at the end of the day, we're talking about

1064
00:45:40,520 --> 00:45:41,799
Speaker 2: like a few percent. Right.

1065
00:45:42,320 --> 00:45:44,600
Speaker 1: But let's say you get fired.

1066
00:45:44,680 --> 00:45:48,840
Speaker 2: Let's say all of these unexpected expenses hit you all

1067
00:45:48,920 --> 00:45:50,719
Speaker 2: at the same time, and you don't have the cash

1068
00:45:50,760 --> 00:45:54,360
Speaker 2: on hand to get by, and you turn to credit cards.

1069
00:45:54,440 --> 00:45:56,360
Speaker 2: What's the interest rate on those bad boys? You're talking

1070
00:45:56,400 --> 00:46:01,120
Speaker 2: like twenty percent, And so there's a drastic difference between saying, Okay,

1071
00:46:01,120 --> 00:46:03,399
Speaker 2: it's not the most ideal thing to not put down

1072
00:46:03,440 --> 00:46:07,160
Speaker 2: twenty percent, But the difference between you know, a few

1073
00:46:07,200 --> 00:46:09,400
Speaker 2: percent versus like twenty percent that you're paying when it

1074
00:46:09,400 --> 00:46:12,400
Speaker 2: comes to credit cards, that's a big old stinking spread.

1075
00:46:12,560 --> 00:46:13,920
Speaker 2: And we want to make sure that you are not

1076
00:46:14,880 --> 00:46:17,319
Speaker 2: entering into a situation that could leave you vulnerable to

1077
00:46:17,320 --> 00:46:18,000
Speaker 2: that twenty percent.

1078
00:46:18,080 --> 00:46:20,280
Speaker 1: Yeah, and the emergency fund is really there to insulate

1079
00:46:20,280 --> 00:46:22,239
Speaker 1: you from ever having to tap credit cards in a

1080
00:46:22,280 --> 00:46:27,040
Speaker 1: way that is not just not ideal but really crappy.

1081
00:46:26,880 --> 00:46:28,759
Speaker 2: Very harmful to your financial health.

1082
00:46:28,800 --> 00:46:29,200
Speaker 1: Yeah. Yeah.

1083
00:46:29,200 --> 00:46:31,040
Speaker 2: And and the other thing too, with like PMI, like

1084
00:46:31,040 --> 00:46:33,319
Speaker 2: that's something that you can you know after that you

1085
00:46:33,320 --> 00:46:35,400
Speaker 2: can come back to that and get that thing pulled.

1086
00:46:35,200 --> 00:46:38,000
Speaker 1: Off so it can be a temporary expense exactly. Ye, yeah,

1087
00:46:38,040 --> 00:46:40,640
Speaker 1: all right, So basically the whole goal of this episode

1088
00:46:40,680 --> 00:46:43,719
Speaker 1: is to challenge assumptions, right, And it makes me think, Matt, like,

1089
00:46:43,760 --> 00:46:45,440
Speaker 1: which came first, the chicken or the egg? That is

1090
00:46:46,120 --> 00:46:48,440
Speaker 1: a question that no one knows the answer to, right.

1091
00:46:48,719 --> 00:46:51,880
Speaker 1: But according to Pew research, ninety six percent of folks

1092
00:46:51,920 --> 00:46:54,120
Speaker 1: in the top ten percent of net worth own their

1093
00:46:54,120 --> 00:46:56,200
Speaker 1: home instead of renting. But is it the home that

1094
00:46:56,280 --> 00:46:58,759
Speaker 1: makes you rich? Or do rich people tend to buy homes? Like?

1095
00:46:58,960 --> 00:47:00,680
Speaker 1: And I think the latter tends to be true to

1096
00:47:00,680 --> 00:47:04,240
Speaker 1: a certain degree. And we a circle has no end, Joel, Right, yeah,

1097
00:47:04,400 --> 00:47:07,400
Speaker 1: and so I don't know. We've used that reality to

1098
00:47:07,440 --> 00:47:10,000
Speaker 1: create a different narrative, right, one that centers around the

1099
00:47:10,000 --> 00:47:13,520
Speaker 1: home purchase, making people rich, creating a wealth exactly. And

1100
00:47:13,560 --> 00:47:16,799
Speaker 1: depending on the specific location and purchasing climate, it has

1101
00:47:16,800 --> 00:47:20,160
Speaker 1: helped fuel the net worth of buyers, specifically who purchased

1102
00:47:20,280 --> 00:47:23,640
Speaker 1: two to twelve years ago. Those people have done incredibly well.

1103
00:47:23,840 --> 00:47:26,240
Speaker 1: But expecting that to continue to be the case given

1104
00:47:26,600 --> 00:47:30,160
Speaker 1: the amount of upward movement we've seen in the housing market.

1105
00:47:30,360 --> 00:47:33,440
Speaker 1: For home ownership to be what pushes you towards financial

1106
00:47:33,480 --> 00:47:37,120
Speaker 1: independence is highly unlikely. And so it's not that it

1107
00:47:37,640 --> 00:47:40,360
Speaker 1: can't be a financial decision that makes sense for your family.

1108
00:47:40,960 --> 00:47:44,520
Speaker 1: Just think twice before you buy into the home ownership

1109
00:47:44,560 --> 00:47:48,240
Speaker 1: equals wealth building. That correlation, i'd say, is pretty suspect.

1110
00:47:48,480 --> 00:47:50,719
Speaker 2: Yeah, yeah, totally, And ultimately, I think it just takes

1111
00:47:50,719 --> 00:47:52,840
Speaker 2: a little bit of sacrifice, right, Like, are you willing

1112
00:47:52,920 --> 00:47:55,799
Speaker 2: to give up some other things, including some of your

1113
00:47:56,280 --> 00:47:59,080
Speaker 2: financial freedom, for that joy of home ownership? I think

1114
00:47:59,120 --> 00:48:02,280
Speaker 2: that is an important question for folks to ask, because again,

1115
00:48:02,360 --> 00:48:04,600
Speaker 2: we've owned multiple homes ourselves. You know, we've invested in

1116
00:48:04,640 --> 00:48:07,400
Speaker 2: real estate, and given the right climate, given the proper

1117
00:48:07,440 --> 00:48:10,560
Speaker 2: financial planning, owning a home can be the perfect move

1118
00:48:10,800 --> 00:48:14,040
Speaker 2: for you. And there's a chance that the returns could

1119
00:48:14,120 --> 00:48:18,080
Speaker 2: be pretty significant as well. But I also wouldn't count

1120
00:48:18,280 --> 00:48:20,680
Speaker 2: on that, you know, that home being the smartest financial

1121
00:48:20,719 --> 00:48:22,280
Speaker 2: move that you've ever made.

1122
00:48:22,440 --> 00:48:24,520
Speaker 1: Sure hope, I sure hope it's not, by the way,

1123
00:48:24,560 --> 00:48:28,040
Speaker 1: because if it is the best financial move you've ever made,

1124
00:48:28,080 --> 00:48:30,840
Speaker 1: it means that you haven't invested inside of the retirement

1125
00:48:30,840 --> 00:48:33,600
Speaker 1: account that we talk about as being the biggest wealth drivers,

1126
00:48:33,920 --> 00:48:35,600
Speaker 1: and so maybe it is. I think for a lot

1127
00:48:35,640 --> 00:48:38,080
Speaker 1: of people it has been. That doesn't mean it's the

1128
00:48:38,080 --> 00:48:39,160
Speaker 1: best route though, totally.

1129
00:48:39,239 --> 00:48:41,080
Speaker 2: Yeah, And to it to a certain extent, like when

1130
00:48:41,080 --> 00:48:42,640
Speaker 2: you buy a home, like you said, like you are

1131
00:48:42,640 --> 00:48:45,320
Speaker 2: putting down roots, like there is an amount of permanence,

1132
00:48:45,400 --> 00:48:48,680
Speaker 2: Like there's a degree, like you are anchoring yourself essentially,

1133
00:48:48,760 --> 00:48:51,200
Speaker 2: and you just got to ask yourself if you're ready

1134
00:48:51,320 --> 00:48:53,719
Speaker 2: for that stage of life, if that's what you want

1135
00:48:53,760 --> 00:48:57,720
Speaker 2: the next seven plus years to look like. But ultimately,

1136
00:48:57,800 --> 00:49:00,319
Speaker 2: I think what we're pointing out here is that you

1137
00:49:00,360 --> 00:49:03,799
Speaker 2: shouldn't be buying a home or you shouldn't continue to

1138
00:49:03,840 --> 00:49:07,359
Speaker 2: rent purely based on financials. There are so many other

1139
00:49:07,520 --> 00:49:10,279
Speaker 2: more important factors in life to consider. It shouldn't just

1140
00:49:10,360 --> 00:49:13,680
Speaker 2: be for financial reasons, though that is an important lens

1141
00:49:13,719 --> 00:49:16,880
Speaker 2: to look at the decision making process through. But it

1142
00:49:16,880 --> 00:49:21,239
Speaker 2: shouldn't just be only financial reasons, but life reasons as well.

1143
00:49:21,280 --> 00:49:23,239
Speaker 2: You've closten to a family or friends or make or

1144
00:49:23,280 --> 00:49:25,640
Speaker 2: whether it's schools or a pace of life. If you

1145
00:49:25,880 --> 00:49:28,520
Speaker 2: can't rent there, then okay, yeah, maybe buying there is

1146
00:49:29,239 --> 00:49:30,200
Speaker 2: something to consider.

1147
00:49:30,280 --> 00:49:31,839
Speaker 1: Yeah, but it makes me think one more thing It's

1148
00:49:31,880 --> 00:49:34,040
Speaker 1: kind of like, who's worse off when it comes to

1149
00:49:34,719 --> 00:49:36,960
Speaker 1: higher education, it's the folks who went to school for

1150
00:49:37,000 --> 00:49:38,960
Speaker 1: three years and took on the student loan debt but

1151
00:49:39,000 --> 00:49:41,040
Speaker 1: didn't get the degree. The same thing is true for

1152
00:49:41,040 --> 00:49:43,640
Speaker 1: people who buy a house. The people who are absolutely

1153
00:49:43,680 --> 00:49:45,399
Speaker 1: in the worst position are the folks who are there

1154
00:49:45,480 --> 00:49:48,719
Speaker 1: for a year or two and sell. And so that

1155
00:49:48,840 --> 00:49:52,120
Speaker 1: timeline is massively important when you're making this decision, absolutely

1156
00:49:52,160 --> 00:49:54,360
Speaker 1: as well. So let's get back to the beer that

1157
00:49:54,400 --> 00:49:56,560
Speaker 1: we had on this episode. This once called do It.

1158
00:49:56,560 --> 00:49:59,879
Speaker 1: It was a time to believe in anything than IPA.

1159
00:50:00,040 --> 00:50:02,799
Speaker 2: Fits along with the theme of the episode a little

1160
00:50:02,800 --> 00:50:05,200
Speaker 2: bit like we do not want you to believe anything

1161
00:50:05,200 --> 00:50:06,160
Speaker 2: when it comes to housing.

1162
00:50:06,280 --> 00:50:08,520
Speaker 1: Yeah, and we hope you folks who want to buy

1163
00:50:08,520 --> 00:50:10,320
Speaker 1: a home want to own a home at some point

1164
00:50:10,520 --> 00:50:12,640
Speaker 1: achieve that. But we hope you achieve it under the

1165
00:50:12,680 --> 00:50:15,200
Speaker 1: right circumstances. But Matt, what were your thoughts on this beer?

1166
00:50:15,360 --> 00:50:17,200
Speaker 2: My tasting notes are going to be similar to some

1167
00:50:17,280 --> 00:50:19,040
Speaker 2: of the other burials that we that we've had with

1168
00:50:19,080 --> 00:50:22,319
Speaker 2: a few additions. It's certainly sharp. Again, the amount of

1169
00:50:22,360 --> 00:50:25,279
Speaker 2: hops that they must put in their IPAs is just

1170
00:50:25,440 --> 00:50:29,239
Speaker 2: off the charts, but in particular this ipa. Is this

1171
00:50:29,320 --> 00:50:32,360
Speaker 2: a double or single? I don't single, it's a single regardless.

1172
00:50:32,560 --> 00:50:35,360
Speaker 2: It had this brightness to it that I felt that

1173
00:50:35,360 --> 00:50:37,279
Speaker 2: I feel like the other two didn't. And I feel

1174
00:50:37,280 --> 00:50:38,439
Speaker 2: like you can see it in the color a little

1175
00:50:38,440 --> 00:50:39,799
Speaker 2: bit too, like it seemed like maybe it was a

1176
00:50:40,000 --> 00:50:41,560
Speaker 2: I don't know, maybe it was a touch more vibrant,

1177
00:50:41,680 --> 00:50:44,200
Speaker 2: but on the in the mouth, it had just a

1178
00:50:44,719 --> 00:50:46,759
Speaker 2: like a lightness and a brightness to it where it

1179
00:50:46,800 --> 00:50:49,239
Speaker 2: felt like it was alive. This reminds me of some

1180
00:50:49,280 --> 00:50:52,800
Speaker 2: of those early Fresh Hot beers that we had. I

1181
00:50:52,840 --> 00:50:54,480
Speaker 2: don't know, I feel like Fresh Hop beers were real big,

1182
00:50:54,560 --> 00:50:56,680
Speaker 2: Like I was totally thinking Freshers six seven years ago

1183
00:50:56,760 --> 00:50:59,040
Speaker 2: and we got a few that were I thought this was.

1184
00:50:59,000 --> 00:51:02,120
Speaker 1: More like back than some of the other burial beers.

1185
00:51:02,640 --> 00:51:05,960
Speaker 1: And even still it's intense from an ipa perspective, but

1186
00:51:05,960 --> 00:51:08,799
Speaker 1: it's less intense than the other burial IPAs we've had.

1187
00:51:09,120 --> 00:51:11,680
Speaker 1: And yeah, fresh hot vibes for sure, like I'm tasting

1188
00:51:11,719 --> 00:51:13,320
Speaker 1: the grain on the vine almost yeah.

1189
00:51:13,239 --> 00:51:15,520
Speaker 2: Yeah, it's like tingly yeah, like it almost. It's like

1190
00:51:15,880 --> 00:51:19,520
Speaker 2: for any of the Chinese, like Chezuan fans out there,

1191
00:51:20,080 --> 00:51:22,160
Speaker 2: and you kind of got that tingle on the tongue

1192
00:51:22,200 --> 00:51:24,880
Speaker 2: like this one kind of has that going on it.

1193
00:51:24,880 --> 00:51:27,279
Speaker 2: It certainly has some of those higher notes like on

1194
00:51:27,280 --> 00:51:30,240
Speaker 2: the scale as opposed to like those lower, deeper, earthy

1195
00:51:30,280 --> 00:51:33,120
Speaker 2: notes that you can get with some of burials IPAs.

1196
00:51:33,200 --> 00:51:34,960
Speaker 2: But definitely really enjoyed it though.

1197
00:51:35,000 --> 00:51:36,799
Speaker 1: Yeah, this was a good one, all right, But that'll

1198
00:51:36,840 --> 00:51:39,320
Speaker 1: be it for this episode. You can find show notes

1199
00:51:39,320 --> 00:51:41,239
Speaker 1: links to some of the stuff we mentioned, including I

1200
00:51:41,280 --> 00:51:43,239
Speaker 1: don't think we mentioned this, but there's a New York

1201
00:51:43,239 --> 00:51:46,239
Speaker 1: Times has this great rent to buy calculator that will

1202
00:51:46,280 --> 00:51:48,919
Speaker 1: look out there and totally do that. You can There's

1203
00:51:49,040 --> 00:51:50,480
Speaker 1: there's just so much you can play around with.

1204
00:51:50,520 --> 00:51:52,480
Speaker 2: There a lot of sliders. Yeah, makes it a lot

1205
00:51:52,480 --> 00:51:53,120
Speaker 2: of fun to play with.

1206
00:51:53,200 --> 00:51:54,799
Speaker 1: And you can basically say this is the purchase price

1207
00:51:54,800 --> 00:51:56,719
Speaker 1: I'm looking at blah blah blah, and they'll say, well,

1208
00:51:56,760 --> 00:51:58,640
Speaker 1: if you can find a rental in this price range,

1209
00:51:58,719 --> 00:52:01,160
Speaker 1: then renting makes more sense. Or here's what tips the

1210
00:52:01,200 --> 00:52:02,799
Speaker 1: scales and when you might want to buy. I think

1211
00:52:02,800 --> 00:52:04,279
Speaker 1: that's a helpful tol to play with if you're in

1212
00:52:04,320 --> 00:52:05,319
Speaker 1: the market. Absolutely.

1213
00:52:05,800 --> 00:52:07,120
Speaker 2: One of the things you can play with too, is

1214
00:52:07,120 --> 00:52:09,319
Speaker 2: you can change the scale as to how long it

1215
00:52:09,360 --> 00:52:10,960
Speaker 2: is that you'll stay in that property and you can

1216
00:52:11,040 --> 00:52:14,640
Speaker 2: physically see how it's like instead of buying that home.

1217
00:52:15,120 --> 00:52:16,960
Speaker 2: And now what that means is that you could you

1218
00:52:17,000 --> 00:52:20,279
Speaker 2: could afford renting a place that cost you this much

1219
00:52:20,320 --> 00:52:22,280
Speaker 2: stinking money, and it would. It's gonna blow your Mind's

1220
00:52:22,320 --> 00:52:25,240
Speaker 2: amazing because it puts the closing costs, the transaction costs

1221
00:52:25,239 --> 00:52:28,000
Speaker 2: into perspective. Uh yeah, we'll make sure to link to

1222
00:52:28,000 --> 00:52:30,680
Speaker 2: that in the show notes. It can be incredibly enlightening,

1223
00:52:30,880 --> 00:52:32,640
Speaker 2: but otherwise, that's going to be it for this episode.

1224
00:52:32,719 --> 00:52:34,760
Speaker 2: For all the listeners out there who have not left

1225
00:52:34,920 --> 00:52:38,239
Speaker 2: us a review yet, we would greatly appreciate some kind

1226
00:52:38,239 --> 00:52:40,200
Speaker 2: words over there. It helps us to get the word out,

1227
00:52:40,480 --> 00:52:42,880
Speaker 2: helps other folks to find how to money and to

1228
00:52:42,960 --> 00:52:45,480
Speaker 2: better their financial standing. But Joel, that's going to be

1229
00:52:45,520 --> 00:52:48,640
Speaker 2: it for this episode until next time. Best Friends Out,

1230
00:52:48,800 --> 00:53:01,760
Speaker 2: Best Friends Out. Hoop