What Would You Do With An Extra $7,360 A Month?

With housing prices so high, for some the focus shifts to cash [View in browser]( BROUGHT TO YOU BY: Proprietary Data Insights Top Mortgage Finance Searches This Month Rank Name Searches #1 Ellington Financial 7,358 #2 Encore Capital Group 3,750 #3 LendingTree 1,393 #4 Altisource Portfolio 762 #5 Walker & Dunlop 580 #ad [Investors: Disruptive Tech To Dominate]( Another Record For Rent While The Juice thinks lots of people are struggling to get by, [the data]( points to large swaths of the population doing quite well with money. They have good-paying jobs and cash to spend. In the old days, home ownership would have been a no-brainer for people in such strong personal financial positions. Not anymore. It takes a significant salary to be a homeowner in an increasing number of places. So, when you think about how much of your cash you allocate to housing, different factors come into play. We’ll explore this in a second, but first, given the latest figures on apartment rent, it’s pretty amazing to think renting comes in more affordable than home ownership in a majority of large metros: Source: [Essex Property Trust]( That’s the latest data on three key West Coast markets: Northern and Southern California and Seattle. It costs 2.2X more to own than rent in these places. And it’s hardly cheap to rent. In San Francisco, the median price of a one-bedroom hit $3,100 in July. The highest since July 2020. Nationally, it’s at a frothy $1,450, up 2% month-to-month and 11.3% year-over-year. Go for a two-bedroom and the typical rent hit $1,750 in July, up 2% and 9.3%, respectively. If you want anything even resembling a bustling urban/suburban environment, it’s going to cost you: Source: [Zumper]( However, it won’t cost you as much as home ownership in at least 38 of the nation’s 50 largest metropolitan area. The Juice details an extreme, but super instructive case if you scroll with us. [Brought to you by Streetlight Equity]( [Investors: Disruptive Tech To Dominate]( This company's new technology has been called a "money machine" for its ability to churn out ultra-pure products for a niche agricultural market -- at one-third the cost! It's hard to overstate just how significant this breakthrough could be -- especially for a $61 billion industry. See what investors are doing to make the most of this opportunity. [Learn more]( Housing What Would You Do With An Extra $7,360 A Month? Key Takeaways: - In an increasing number of places, it costs considerably more to buy rather than own a home. - And this doesn’t take into account the attendant costs of home ownership on the front end and over time. - If you make good money, you have to ask yourself how big of a cash surplus you need or want each month. As we were marveling at how two politically-opposed groups of people can spin the same story (FBI raid, anyone!?) in completely different ways, we came across a [tweet]( that actually can help us with our personal finance and investing. Damn, dude. If you’re living by the allocate 30% of your income to housing rule, you’re grossing $21,333 a month. Not too shabby. Even at that impressive level, as the Tweet makes clear, it’s no longer a no-brainer to own a home, especially if you live somewhere expensive. However, it’s not just the notoriously pricey places where you have to make this consideration. Be it Southern California or, [as The Juice outlined last week](, Denver, the math you might need to do goes beyond the monthly payment: Put 10% down instead of 20% and, of course, your monthly payment increases, making the salary required to own a median priced home in Denver just north of $143,500. Think about that down payment again. But, as a chunk of cash you must come up with. At 20% down, you’ll need to save $132,400. At 10% down, you’ll need a still formidable $66,220. The average rent for an apartment across Denver: $1,994. The average rent for an apartment in Downtown Denver: $2,462. So, in some ways, it’s all relative, as you go from place to place. There’s the down payment. There’s property tax. There’s maintenance. These are potentially massive pots of money you have to part with or have on hand if you decide to become a homeowner. Which leads to the question - what would you do with the money you might save by renting rather than owning? In the LA example, it’s a whopping $7,360 a month on the monthly payment alone. In the Denver instance, it’s closer to $1,000 a month. In both cases, the down payment exceeds six figures, with it hitting mid-to-high six figures in Los Angeles. Put It All On A Horse Some people say you’re flushing money down the toilet - paying somebody else’s mortgage - if you choose to rent. This might be an old way to look at things. And, of course, old adages tend to die hard. An increasing number of young people have discovered and gotten into investing - big time - since the pandemic started. They look at savings as not something to necessarily turn around and give to a bank so they can start a mortgage, but as fresh powder to put into the stock and cryptocurrency markets. Invest $7,000 a month and, at a 6% annual rate of return, you’ll have more than $13 million in ten years. Big numbers, no doubt. However, if you’re of more modest means, investing $2,000 a month the same way gets you nearly $3.9 million in a decade. Enough to buy a median priced home in America today 8.7 times over. Think about that as you ponder the question The Juice asked you today. The Bottom Line: Live in the moment. Keep one eye firmly planted on tomorrow. That’s how we roll in these parts. So, with that in mind, in tomorrow’s Juice we consider another way to spend your cash surplus that doesn’t involve real estate. On Monday, in [Wanna Be A Venture Capitalist](, we introduced you to the basics of private equity investing. It used to be that only ultra rich people - people who wipe their you know what with an extra seven grand a month - could invest in private companies and other private assets. That’s no longer the case. The playing field has been leveled, baby. So, as new ways of allocating your excess cash continue to evolve, The Juice will dig deeper into some of the platforms that give everyday investors access to what used to only be for the 1% - private markets investing. News & Insights Freshly Squeezed - [3 Dividend Aristocrats Analysts Love]( - [“Do NOT Buy Any Stocks Before Seeing This” (Ad)]( - [12 Best Liquor Stocks To Buy Now]( - [If You Invested $1,000 In Walmart Stock At Its IPO, Here’s How Much You’d Have Now]( [We want to hear from you! 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