Am I reading this wrong, or do they actually not include rent in their calculations? Turns out renting is a lot better when you just ignore that you have to pay rent.
Rent is included, his argument is that if rent and mortgage costs were the same then renters don't have the added expense of property upkeep so they could invest that "savings" in the market. He did not do a very good job explaining this.
The obvious alternative for the scenario he gives is buying a less expensive home (likely similar to the one you would be renting because we all know how that works) and investing those savings. With his example being a $400k home you would be shopping in the $325k range. At the end of 30 years you'd have a home and idk, a million dollars in the market. He's not specific enough to give hard numbers.
But renting costs more than buying for the quality of home, and often landlords crank up rent on long term residents because of the stability. Moving all the time because of rent prices suck. Home stability is worth a lot.
The article writer Aldi doesn't note the best way to save is become homeless and just invest in the market.
Yes. that's why it's a terrible argument. Living below your means and investing early and often is a much better argument, you have to find the balance that works for you.
But rent is not subtracted from the total profit at the end while the mortgage is.
If we assume they rent a 400k house, let's be generous and assume they get it at 3k per month, and that rent doubles over the thirty years. The total rent would be 1.5·3000·30·12 = 1.62 million dollars. This eats quite a bit into the 1.8 million dollar profit.
Monthly rent and mortgage have to be similar for the argument to work. You would obviously not be renting a $400k house in this scenario, you would be renting a $1562 per month house.
Am I reading this wrong, or do they actually not include rent in their calculations? Turns out renting is a lot better when you just ignore that you have to pay rent.
Rent is included, his argument is that if rent and mortgage costs were the same then renters don't have the added expense of property upkeep so they could invest that "savings" in the market. He did not do a very good job explaining this.
The obvious alternative for the scenario he gives is buying a less expensive home (likely similar to the one you would be renting because we all know how that works) and investing those savings. With his example being a $400k home you would be shopping in the $325k range. At the end of 30 years you'd have a home and idk, a million dollars in the market. He's not specific enough to give hard numbers.
But renting costs more than buying for the quality of home, and often landlords crank up rent on long term residents because of the stability. Moving all the time because of rent prices suck. Home stability is worth a lot.
The article writer Aldi doesn't note the best way to save is become homeless and just invest in the market.
Yes. that's why it's a terrible argument. Living below your means and investing early and often is a much better argument, you have to find the balance that works for you.
But rent is not subtracted from the total profit at the end while the mortgage is.
If we assume they rent a 400k house, let's be generous and assume they get it at 3k per month, and that rent doubles over the thirty years. The total rent would be 1.5·3000·30·12 = 1.62 million dollars. This eats quite a bit into the 1.8 million dollar profit.
Monthly rent and mortgage have to be similar for the argument to work. You would obviously not be renting a $400k house in this scenario, you would be renting a $1562 per month house.
I don't understand, rent is something that people give me, why would it be factored as an expense?