Uncover the truth about this common money myth

There are many money myths out there. You may have seen me address some of these To view this email as a web page, [click here]() {NAME}, There are many money myths out there. You may have seen me address some of these in my Netflix show, “[How to Get Rich]().” But the number one most common myth about money — especially for Americans — is that if you rent, you are throwing your money away. Now, we've all heard this phrase, but it's not true. Let me tell you why. A lot of you get pressure to buy a house from parents, friends, and other people who don’t know what they’re talking about. On my podcast, I talked with Eric and Elena. They had bought into the idea that they HAD to buy real estate. Elena: “Honestly, my parents were not excited that we were renting, paying someone else’s mortgage.” Nooooo! Eric: “My best friend’s parents are real estate agents. They’re very big proponents of purchasing a place. And I agreed with them. I think I still agree with them.” Me: “What did they say?” Eric: “It’s ridiculous to pay someone’s mortgage. It’s ridiculous.” Me: “It’s ridiculous. Outrageous.” Elena: “We didn’t want to keep paying rent, paying somebody else’s mortgage. We figured if we had the down payment, the mortgage itself wouldn’t be that much different from our rent.” Here’s where things got interesting I asked Elena about the last time she ate at a restaurant. It was the previous evening. She had sushi for $60. She thought I was going to come down hard on her for spending that much on one meal. Instead, I asked her: “Didn’t you feel terrible that you were paying the sushi owner’s mortgage?” You should have seen the look on her face! She rotated her head left and right, in complete disbelief. Eric put his hand over his mouth, looked up at the sky, and rubbed his forehead. They both looked completely bewildered. They were realizing that they had been misled by invisible scripts about renting vs. owning. It was amazing to see them realize this. [Myth: "You're paying your landlord's rent"]() Your landlord's rental price is a reflection of what the market will support, but that alone isn't a compelling enough reason to dive headfirst into home ownership A simple guideline: add 50% Here’s my guideline. When I travel and stay at a hotel, I add 50% to the sticker price of the hotel to account for taxes, dining, and any other fees I might incur. For example, a $500 a night hotel actually becomes $750 a night. That turns out to be eerily accurate when you factor in all the phantom costs for just one night at a hotel. Guess what? I use that same calculation for mortgages. Once I start taking into account all the phantom costs of owning a home - we're talking taxes, insurance, maintenance, the cost of a cleaning service, various repairs, and that $18,000 roof replacement lurking in the future - I find essentially the same numbers. In other words, if a mortgage is $3,000 a month, it will actually cost roughly $4,500 per month. But don’t just take my word for it. I encourage you to run your own numbers and make your own assumptions. In [Chapter 9 of my New York Times bestselling book](), I show you how to find out how much buying a house will really cost you. [Renting vs Owning]() When you're considering buying a home, it's crucial to pull out your calculator and start crunching those hidden phantom costs that are often overlooked I’m not against buying a house! What I am against is people lying to you for their own gain, costing you thousands of dollars. There are entire multibillion-dollar industries feeding you lies about all the reasons to buy a house. I want you to be an educated consumer when you make the biggest purchase of your life. Here’s my checklist of questions to ask yourself before buying a house: - Will I live here for 10+ years? - Is my total monthly housing cost lower than 28% of my gross monthly income? - Have I saved a 20% down payment? - Am I OK if the value of my house goes down? - Am I excited about buying? If the answer to any of these questions is a hard “no,” then it might be worth reconsidering the purchase of a home. It might not be your time to buy. But if you answer “yes,” then go for it! Where do you get your money advice? The key point I want to make today is this: beware of who you get your money advice from. Do your own research, consult with experts — and most importantly, RUN THE NUMBERS (are you sensing a theme today?). Don’t let random people make life’s biggest decisions for you. Tomorrow, I’m going to show you the two ways most people get their money advice (and why a third way is better). [Signature] P.S. I've mentioned this before and it's worth repeating because it's fantastic. I received a message from one of my podcast listeners: [Ramit Tweet] Buying a house isn't always the financial win that your folks or realtor might have you believe. Case in point: This listener who acknowledged the sneaky hidden costs, stacked them up against the benefits of home ownership, and still made the leap to buy! That's what I call commitment. And they did their homework and RAN THE NUMBERS before deciding. I love it! P.P.S. Get more advice like this. Craving more unconventional wisdom? If you appreciate my data-driven insights (because I do the math), I'd suggest [joining my Money Coaching program](). Here's what you'll get: - Video and written content to guide you in setting up an automated financial system that works for you while you sleep - Monthly group coaching calls where I provide money makeovers for students and tackle your pressing financial questions - Access to a private, buzzing Slack community of people just like you, all on a mission to master their finances Are you ready to transform your financial future? [Click here to join](). Featured Products [Learn how to be your own boss, do what you love, and earn more.]() [What if you woke up EXCITED to go to work? I show you how to achieve it, step by step.]() [Ready-to-use mental frameworks for increased happiness, confidence, & success.]() [No guilt, no excuses, no BS. Just a 6-week program that works. Over 1,000,000 copies sold.]() The I Will Teach You To Be Rich Podcast Raw, unfiltered conversations with real couples: - One partner is $300,000 in debt, but shrugs it off. The other cries at night, anxious about the future. - A couple that’s so worried about money, they feel like they’ll never have enough. They go to a restaurant and order chicken instead of steak to save $10. Their household income: $600,000. - Two parents who feel overwhelmed by work, kids, and debt. When I ask them how they’d describe their lives, they instantly say the same word: “Stuck. ” Listen in to hear real money conversations from behind closed doors today. [Apple Podcasts] [Apple]() [Spotify]() [Google]() [IWT]() Follow Ramit: [insta]() [Twitter]() [twitter]() [youtube]() [Linkedin]() Was this forwarded to you? [Sign up here.]() This email was sent to {EMAIL}. If you no longer wish to receive these emails you may [unsubscribe]( at any time. 548 Market St #89946 San Francisco, CA 94104-5401